Interim Closing vs. Final Closing on a New Condo in Ontario: What’s the Difference

Buying a new condo in Ontario often comes with a confusing two-step closing process that resale buyers never encounter. You might get keys to your unit, start living there, and pay monthly amounts to the builder — months or even years before you actually own it. Understanding the difference between interim closing (also called interim occupancy) and final closing is essential to knowing what you’re paying for, and when you actually become the registered owner.

The confusion is understandable. Both events feel like "moving day" milestones, and the paperwork can look similar. But legally, only one of them transfers ownership of the unit to you.

What Happens at Interim Closing (Interim Occupancy)

Interim closing — commonly called interim occupancy — happens when your new condo building is substantially complete enough for the builder to let residents move in, but the condominium corporation has not yet been legally created. The corporation only comes into existence once its governing documents are registered on title, and that hasn’t happened yet at this stage.

During interim occupancy:

• You take physical possession of your unit and can live in it.
• You do not hold legal title to the unit — the builder still owns the land and the building.
• You pay the builder a monthly occupancy fee instead of a mortgage payment, because there is no separately titled unit yet for a lender to register a mortgage against.
• The occupancy fee is typically based on estimates of what your future mortgage interest, property taxes, and common expenses would be once the unit is registered — not an arbitrary number, but also not your actual mortgage.
• You do not need mortgage financing in place to move in, because you are not yet closing a purchase.

This stage can last anywhere from a few months to well over a year, depending on how long it takes the builder to complete construction, satisfy municipal requirements, and register the condominium corporation.

What Happens at Final Closing (Registration)

Final closing happens once the condominium corporation is legally registered — the point at which the building’s declaration and description are registered on title, creating the corporation as a legal entity and dividing the building into individually owned units and common elements.

At final closing:

• Legal title to your unit transfers from the builder to you.
• Your mortgage financing is drawn down for the first time — this is when you actually need a lender in place.
• You (or your lawyer, on your behalf) pay the balance of the purchase price, land transfer tax, and other closing costs.
• Your lawyer registers the transfer and your mortgage electronically through Ontario’s land registration system.
• You become a registered owner and a voting member of the new condominium corporation.

Only final closing is a "closing" in the traditional real estate sense — a transfer of ownership. Interim occupancy is better understood as a separate contractual arrangement with the builder, even though you’re occupying a unit you’ve agreed to buy.

Interim Closing vs. Final Closing at a Glance

Why the Gap Between the Two Exists

Ontario’s Condominium Act, 1998 requires a condominium corporation to be properly created through registration before units can be individually owned and mortgaged. Builders often complete construction — or complete it enough for occupancy — before that registration process, which involves surveys, municipal approvals, and other steps, is finished. Rather than leave finished units empty, the builder allows early occupancy under a separate interim arrangement.

This structure also explains why new-condo buyers get a cooling-off right that resale buyers don’t. Under the Condominium Act, 1998, a buyer purchasing directly from a builder or developer has a statutory right to cancel the agreement within a short window after receiving the signed agreement, the builder’s disclosure statement, and the province’s official condo buyer’s guide. That rescission right relates to the purchase agreement itself, not to interim or final closing.

What to Watch for as a Buyer

• [ ] Ask your lawyer to explain how the occupancy fee is calculated before you sign.
• [ ] Confirm your builder is licensed with the Home Construction Regulatory Authority (HCRA) and that Tarion warranty coverage applies.
• [ ] Don’t assume you need mortgage pre-approval finalized for interim occupancy — but do start that process well before final closing.
• [ ] Ask your lawyer how much notice you’ll typically get between interim occupancy and final closing, since it depends on the building’s registration timeline.
• [ ] Review your agreement of purchase and sale for how occupancy fees are adjusted if final closing is delayed.

Frequently asked questions