Freehold homes usually close in one step: you pay the balance, get the keys and take title on the same day. New condos are different. Most buyers move in at interim occupancy, but only become the legal owner at final closing, which can be months later. Understanding the gap helps you budget and avoid surprises.
Why condos have two dates
A condo can’t be registered as a condominium corporation until the building is substantially complete and the builder has finished the legal registration process. Builders let buyers move in once units are safe and ready for occupancy, which is usually before registration. Until registration, there’s no separate legal title for your unit, so you’re occupying it under the terms of your agreement.
Interim occupancy
On your occupancy date, you get the keys and can live in or rent out the unit, depending on your agreement. You’ll usually pay the next deposit (if one is due at occupancy), and then a monthly interim occupancy fee.
How occupancy fees are calculated
Under Ontario’s Condominium Act, the monthly occupancy fee is limited to the total of:
- interest on the unpaid balance of the purchase price, at a prescribed rate,
- the estimated monthly common expenses (maintenance fees) for the unit, and
- an estimated monthly amount for property taxes.
Occupancy fees don’t pay down your purchase price. They work like rent paid to the builder, which is why buyers sometimes call it “phantom rent.”
Final closing
After the condo is registered, the builder schedules final closing. On that date:
- your mortgage funds and you pay the balance of the purchase price,
- you pay the closing adjustments, including land transfer tax and builder charges (see closing costs), and
- you become the registered owner.
Your monthly costs then switch from occupancy fees to your mortgage payment, maintenance fees and property taxes.
How long is the gap?
It varies by project. Some buildings register within a few months; others take a year or more, especially large multi-phase projects. Your agreement and the Tarion Addendum set limits on how long interim occupancy can last. Ask the builder about their history on past projects; our guide on choosing a developer explains what to look for.
Planning your finances
- Budget for both phases. Occupancy fees, then mortgage payments and closing costs.
- Keep your mortgage approval current. Lenders may need updated documents close to final closing. See mortgage pre-approval for pre-construction.
- Watch rates. Your mortgage rate is set near final closing, not at occupancy.
- Investors: check whether your agreement allows leasing during interim occupancy. See our investor guide.
Your warranty starts at occupancy
For condo units, Tarion warranty coverage generally starts at interim occupancy, so your 30-day and year-end forms are based on that date. See our Tarion guide and pre-delivery inspection guide.
Freehold homes and condo townhomes
Freehold homes on registered lots usually skip interim occupancy and close in one step. Townhomes sold as part of a condominium (including stacked towns) may have interim occupancy like an apartment condo. Our condo vs townhome article explains the ownership differences.
Frequently asked questions
Can I move in without paying the full price?
Yes, that’s how interim occupancy works. You pay occupancy fees until final closing.
Can I sell during interim occupancy?
Not as a regular resale, since you don’t hold title yet. You may be able to assign your agreement; see our assignment guide.
Are occupancy fees tax deductible?
For investors renting out the unit, some costs may be deductible. Ask a tax professional.
General information only. Occupancy terms are set by your agreement and provincial law; consult a real estate lawyer for your situation.
