You pick up the keys to your new Downtown Toronto condo, but you’re told title hasn’t transferred yet. It feels confusing, especially when occupancy fees start and your mortgage hasn’t funded. You’re not alone. In Ontario, most new condos have two closings, and understanding each step protects your time, budget, and plans. This guide breaks down interim occupancy versus final closing, what you pay and when, and how to manage the risks like a pro. Let’s dive in.
Interim occupancy vs final closing
During interim occupancy, you can move into your suite, but legal title does not transfer to you yet. You have possession, not ownership in the land registry. Final closing happens when the condominium is registered and your unit’s title transfers to you. Your mortgage is usually funded on that date.
Why two-stage closings happen in Toronto
High-rise buildings complete in phases. Developers obtain occupancy permits as floors are finished so residents can move in while the final legal steps are completed. Registration of the condominium plan and corporation comes later, once the necessary documentation is ready. This structure lets you start using a completed home without waiting for the entire project to be registered.
Who is involved
Key players and rules include the Ontario Condominium Act, your Agreement of Purchase and Sale (APS), municipal authorities that issue occupancy permits, lenders that fund at registration, and Tarion for new-home warranty matters. Your APS sets the details on occupancy, fees, and closing. Your lawyer and lender guide how those terms apply to you.
What you pay during interim occupancy
Understanding occupancy fees
During interim occupancy, you typically pay an occupancy fee to the developer. This fee is different from a mortgage payment and does not reduce mortgage principal. It commonly includes an interest component on the unpaid balance of the purchase price and estimated amounts for condo common expenses and municipal taxes, as outlined in your APS.
How fees are calculated
The exact formula and interest rate are contract-specific. Some agreements tie the interest portion to a bank reference rate, others use a fixed rate. The fee may also include estimates for maintenance and taxes until the condo corporation begins direct billing. Ask the builder for a written breakdown before you accept terms so you can budget with clarity.
Financing and mortgages
Rate holds and timing
Most lenders advance funds only at final closing, once title can be registered. If registration takes longer than your rate hold, your mortgage rate could change or your approval may need updating. Clarify how long your rate is held, whether extensions are possible, and what happens if delays occur.
What to ask your lender
- How long is the current rate hold and can it be extended?
- Will you allow bridging or special arrangements if registration is delayed?
- What conditions must be satisfied at final closing to fund the mortgage?
- Do you require mortgage insurance or additional documentation at registration?
Operating costs, taxes, insurance
Common expenses and taxes
Your APS usually addresses who pays common expenses and taxes during interim occupancy. Many builders include an estimate for these costs as part of the occupancy fee until the condominium corporation begins direct billing after registration. Ask for the assumptions used so you can compare them to typical fees for Downtown buildings.
Insurance at occupancy
From your occupancy date, you should arrange your own contents and liability insurance, even though the builder’s policy generally covers the building structure until registration. Title insurance typically applies at final closing when you receive registered ownership. Confirm requirements in your APS and with your lender.
Using your suite during IO
Renovations and access
Many APSs restrict structural or major changes until after final closing. Cosmetic upgrades may be possible with written developer consent and clear responsibility for any damage. Confirm what is permitted, how to schedule contractor access, and the process for approvals.
Renting, assignment, resale
Whether you can rent the unit during interim occupancy depends on your APS and building policies. Many developers restrict leasing before registration. Assignment rights are often limited or subject to fees and conditions. If renting or assigning is part of your strategy, negotiate terms up front and get consent in writing.
Legal status, warranties, delays
Title and documents
Until registration, you do not hold registered title to your unit. You have contractual rights under the APS. Standard condominium status certificates are not available during interim occupancy because the condominium corporation does not legally exist until registration.
Tarion warranty timelines
New condos are commonly enrolled with Tarion. Warranty protections often begin at possession or as defined in your APS and the builder’s enrollment documents. Confirm your exact start dates for the 1-year, 2-year, and 7-year coverage periods and follow the required reporting timelines.
Delays and remedies
Registration timelines can shift. If final closing is delayed, you typically continue paying occupancy fees until registration. Some purchasers negotiate caps on the occupancy period or limited compensation for extended delays, though such concessions are not standard. Your APS sets out available remedies, so review it closely with your lawyer.
Deposits and builder insolvency
Deposits are generally held in trust according to your APS and industry rules. If a developer encounters financial difficulty, deposit handling and completion pathways can be complex. Your lawyer and Tarion can advise on protections and next steps.
Buyer checklist for Downtown Toronto
- Obtain and review the full APS, including all occupancy and closing schedules.
- Request a written occupancy fee breakdown with formulas, rates, taxes, and common expense estimates.
- Confirm expected occupancy date and estimated registration date, plus milestone updates.
- Review Tarion enrollment and warranty start-date details for your unit.
- Verify status of occupancy permits and municipal approvals.
- Assess the developer’s track record and disclosure package for the building.
- Get written confirmation from your lender on rate holds, extensions, and funding conditions.
- Confirm insurance requirements from occupancy and at final closing.
Negotiation ideas with builders
- Ask for a transparent calculation for occupancy fees and caps on non-interest components.
- Seek a longer rate hold or a builder-supported extension if registration is delayed.
- Request clear timelines for deficiency completion and defined procedures for repairs.
- For large deposits or unique situations, discuss escrow arrangements with your lawyer.
Staying on track during IO
- Keep open communication with your lawyer, lender, and the builder’s legal team; request written progress updates.
- Prepare a thorough deficiency list at occupancy, with photos and dates; follow the APS process for submissions.
- Track your Tarion warranty start dates and keep records of all notices and repairs.
- Reconfirm mortgage details 30 to 60 days before anticipated registration.
- Retain all occupancy fee statements and receipts for your records.
When to escalate
- If there is a material breach of the APS or unremedied, significant defects, consult your lawyer promptly on remedies.
- If registration delays become excessive, revisit rate hold strategies and potential options under the APS.
- If the developer’s financial status changes, seek immediate legal advice regarding deposits and completion.
How we support your purchase
Navigating interim occupancy in Downtown Toronto’s luxury buildings, from Yorkville and the Bay Street corridor to Rosedale and South Hill, requires foresight and precise execution. With curated market insight and discreet representation, we help you align your APS terms with your goals, coordinate with your lender and legal counsel, and plan for occupancy fees, timelines, and resale or assignment strategies. The result is a smoother path from keys to title, with clarity at every step.
If you are considering a new-build or assignment purchase and want a refined, expert approach, connect with Michelle Jalsevac for a private consultation.
FAQs
Do I pay a mortgage during interim occupancy?
- Typically no. Lenders usually fund at final closing after registration, and you pay the occupancy fee set out in your APS during interim occupancy.
When does the Tarion warranty start for a new condo?
- Warranty timelines often begin at possession or as defined by your APS and the builder’s Tarion enrollment. Confirm dates and reporting steps before move-in.
Can I rent out my condo during interim occupancy?
- It depends on your APS and building rules. Many developers restrict leasing before registration. Obtain written consent before advertising or signing a lease.
Can I renovate my suite before final closing?
- Major changes are commonly restricted until after final closing. Minor cosmetic work may be permitted with written builder approval and clear responsibility for any damage.
What happens if final registration is delayed?
- You usually continue paying occupancy fees until registration. Review your APS for remedies, and coordinate rate hold extensions or alternatives with your lender.
Can I get a status certificate during interim occupancy?
- No. A condominium corporation is created at registration, so standard status certificates become available only after final closing.
