What is Interim Occupancy and How it Affects
You maybe surprised to find out that your new home is not yours yet when they purchase a brand new condo and finally get the keys to your suite. Although this is an exciting phase in the new home ownership process, it is actually not the “ownership” phase. “Interim occupancy” and it allows a builder to finish construction while also organizing an orderly move-in process for what could be hundreds of buyers.
How It Works
Once the building is declared fit for occupancy by the municipality you can start moving in. Usually beginning with the lowest floors. The builder works his or her way up to complete each suite as well as the common elements. None of the buyers are technically taking ownership yet. They will all have to wait for some time before they do. But for the meantime, buyers can enjoy their new homes and some of the amenities as well. For those on the lowest floors, that usually means they get to move in sooner, but will have a longer interim occupancy period than those above them.
Fees
In order to live in your new condo before you own it, the developer or vendor will charge an interim occupancy fee. The fee has three parts; 1. Interest on the unpaid balance of the purchase price of your condo. 2. an estimate on the municipal taxes for your unit. 3. A projected common expense contribution to keep the building running.
The fee is usually charged monthly. It is requested in the form of post-dated cheques made out to the developer or vendor. It’s a misconception that a builder profits or has any benefit to gain from extending this phase in the building of a condo. In fact, there are stipulations in the Condominium Act around the calculation of the occupancy fees which attempt to prevent the developer from making a profit. Furthermore, it is in a builder’s best interest to transfer title as soon as possible. Builders make their money when they are able to provide title and register the project – which can only be done when the building is complete.
Timing
But even though a builder profits only after this phase is complete, interim occupancy may last a while. Many buyers, especially on the lower floors, will likely be moving into a construction zone. The common areas may not be complete, and even some of the amenities may still be under construction. But the building should be safe for living. Municipal inspector will have inspected the building and determined that it is fit for occupancy. Some of the requirements for occupancy include safe access to the unit, running water, sanitary facilities and a functional kitchen.
Call Tarion if you feel the builder has moved you in to a new building that is not fit for occupancy. Another important part of interim occupancy is the warranty process. Your one, two and seven year warranties begin as soon as you are granted occupancy of your unit. You can fill out your first warranty form within the first 30 days of occupancy. Once the condominium is registered the warranty on the common elements of your building begins.
If you are a condo buyer that is currently living in the “interim occupancy” period, I assure you that you and your builder both share the same goal – to get your building registered as soon as possible. And when you do finally get to experience the “ownership” part of the new homeownership process, your building should be complete, your amenities ready to use and you can finally enjoy all the benefits of your new home. If you have any questions as a new condo owner, you can always contact Tarion.
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