The occupancy period

If you have bought a condo unit before construction started, especially if you bought a unit on one of the lower floors, you will most likely required to occupy the unit long before you receive the title to your suite.

The lower floors are usually finished first and the builder will want the purchasers to move in as soon as possible so he can start earning some cash flow from all the money he has sunk into the new project.

Interm occupancy
This is the period of time from when you move into your unit and when the condo corporation gets registered. During this time, you do not own your suite outright as it still belongs to the builder.

A condominium is not technically formed until it is completed and passes the approval processes that enable it to be registered with the Land Registry Office. Only then can the title of your suite be transferred to you.

The approval process, however, begins once the first suite is occupied. It can take six months or longer, depending on the size of the complex and how well the construction proceeds.

High-rise condos are usually fairly tall buildings in which the lower floors are finished well in advance of the upper levels.

The post office will not start mail delivery until 1/3 of the units are occupied so for the first months that you are in your new home, you will need a mailing address.

Occupancy fees
You don't yet own your unit, you are just occupying it so you must pay the developer "occupancy fees" which is the equivalent to rent until such time as the condominium corporation is officially registered. This fee is determined by the interest portion of the balance owing on the purchase price (usually payable on the registration date) based on a one-year mortgage rate of the Bank of Canada, plus the estimated maintenance fees for the suite, plus its portion of the estimated real estate taxes.

This is similar to paying rent until you own your suite — but it is not considered rent, and it is not money that can be applied toward your mortgage.

Once the title is transferred, you take out your mortgage and the builder/developer receives the money. The benefit to the suite owners is that you get to move in more quickly and not have to wait until registration.

You have a substantial amount of notice before your occupancy date. There are interim closing costs to consider, including the amount of money that will bring all deposits to the required percentage of the purchase price, plus adjustments, monthly occupancy fees, the price of upgrades, and enrollment of your suite with TARION Warranty Corporation.

During interim occupancy, you must have your homeowner’s insurance in place, and you have to arrange for utility hook-ups as if you own the home. Your appliance warranties kick in upon occupancy, because you are actually using them, and your Tarion warranty is in place.

Renting your unit
You can't rent your unit because you don't own it. However, the developer has a subsidiary that is a rental company or he has an agreement with a third-party and if you pay them a fee, they can rent your unit for you.

Life during the occupancy period

How difficult this period is depends a lot on the developer. The better ones try very hard to insure that the building is ready for occupancy while the mediocre ones make it seem as if you were roughing it in the bush.

The first people who move in during the occupancy period have it the hardest. The hallways are not complete, there is construction going on above them and usually the amenities are not finished so there is construction below them as well. If you are a shift-worker, you may not get much sleep.

Dust, dirt and constant daytime noise can be a nightmare. There may be power outages and the water can be shutoff, often without any notice.

You may be sharing elevators with construction workers. There may be water leaks, perhaps minor and perhaps major flooding.

There may be minor problems with your unit that was not picked up during the Pre-Occupancy Inspection. A stove vent may not work or the fan may have been installed backwards.

Some owners have no sense of humour and get really upset when all the elevators are down and they live on the 19th floor. They also don't think that the lack of heat in the winter or no air conditioning in the summer is very funny.

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