Preparing for the Occupancy Date/Interim Closing of Your Pre-Construction Property
What is “Interim Closing”?
Interim Closing is the date on which you take occupancy of your pre-construction condominium unit. It is also referred to as the “Occupancy Date” by Builders.
The “Occupancy Period” is the period of time between your Interim Closing Date, and the moment you take ownership at Final Closing. During the Occupancy Period, the municipality has deemed your unit safe to be inhabited while the construction continues. This Interim Occupancy Period has no definitive timeline. It typically lasts between 3 to 9 months but may be shorter or longer. Since builders always complete construction from the ground up, Interim Closing is generally scheduled in ascending order by floor. Therefore, the Interim Occupancy Period is typically longer for units on lower floors.
Keys are normally picked up on-site at the management office (in person). Ensure you bring a piece of photo ID.
Interim Occupancy Fees
As the Buyer, you will be paying the Builder a monthly “Interim Occupancy Fee”. The Occupancy Fee is payable whether you actually move into your unit on the Interim Closing Date or not. Unfortunately, the Interim Occupancy Fee does not count towards the unpaid balance of the purchase price of your unit.
The Interim Occupancy Fee is the sum of 3 costs:
Interest on the unpaid balance of the purchase price of your unit;
The interest rate charged is the Bank of Canada’s 1-year conventional mortgage rate;
If you wish to decrease the interest payable, you may have an opportunity to request a larger deposit payment on occupancy closing. If you are interested in this option, you must provide advance notice to the Builder at the earliest opportunity.
Estimated municipal property taxes for your unit; and
Estimated maintenance fees (common expenses) for your unit.
Tarion Warranty
Before occupancy, the Builder will ask you to make an appointment to complete a Pre-Delivery Inspection (PDI). Use this checklist for your inspection. After the inspection, you will receive a Certificate of Completion and Possession (“CCP”). As soon as you complete your Interim Closing, your 30 day, one-year, two-year, and seven-year TARION warranties begin. Set up an online account with TARION here. For more information on TARION’s warranty forms and submission periods, go here.
Other Information/Items to Prepare
Confirmation as to who will be occupying (moving into) the property
If you will be making any title direction changes, it is best to complete this before Interim Closing
Bank draft for deposits/balance due on Interim Closing
Post-dated cheques for occupancy fees (sometimes as many as twelve!)
Proof of property insurance
Proof of utility setup and a void cheque for pre-authorized payment purposes
In some rare circumstances, the Builder will ask you to prepare an updated mortgage approval
Preparing for Final Closing
Usually, about 3-4 weeks before your Final Closing Date, you will be notified of a Final Closing Date. You should notify your lawyer immediately if you receive such notice, and ensure that your mortgage is secured and ready to go, as sometimes this notice period may be much shorter.
If you have questions related to your closing, please reach out to me directly and I would be more than happy to chat! Contact us here!
Author:
Jennifer Park
Partner
e: jpark@realtycarelaw.com