- Under the Condominium Act, the interim occupancy fee cannot exceed interest on the unpaid balance, estimated monthly municipal taxes and projected common expense fees combined.
- Interim occupancy fees are not credited to the purchase price, and you owe them whether or not you move in.
- The fees stop when title transfers, which can only happen once the condominium corporation has been registered.
You have been told your new condo is ready to move into, but the building is not yet registered and you do not own the unit. In the meantime, you start paying a monthly charge that feels like rent. That charge is the interim occupancy fee, and many buyers are surprised by it.
This article explains why interim occupancy exists, how Ontario law caps the fee, whether it goes toward your price, and when it ends. It also covers a few related points that matter at this stage, such as the warranty start date and the walk-through before you get your keys.
What interim occupancy is and why it exists
Interim occupancy is the period when you live in, or have the right to occupy, your new unit before you legally own it. It exists because ownership of a new condo unit can only transfer once the condominium corporation has been registered. Units are often finished before that registration happens, so builders let buyers take occupancy first.
During this period you are not yet the owner, but you are paying a monthly fee. Think of it as a bridge between the day you get the keys and the day title transfers to you.
How the fee is capped
The Condominium Act limits what a builder can charge. The interim occupancy fee cannot exceed the total of three things:
- Monthly interest on the unpaid balance of the purchase price, at the prescribed rate.
- The estimated monthly municipal taxes.
- The projected common expense fees for the unit.
The unpaid balance is the part of the price you have not yet paid, so the interest portion is tied to what you still owe. Common expense fees are what you would normally pay for upkeep of the building and contributions to the reserve fund, with each unit's share set as a percentage in the declaration. The prescribed rate and your actual dollar amounts depend on your agreement and the current rules, so confirm them against your own documents.
Do the fees go toward the purchase price?
No. Interim occupancy fees apply only during the interim occupancy period, and they are not credited to the purchase price. Paying them does not reduce what you owe on closing.
You also owe them whether or not you actually move in. If you take occupancy but leave the unit empty while you wait to renovate or sell, the fee still runs. The fees stop when title transfers to you.
| Item | Interim occupancy fee |
|---|---|
| Credited to the price? | No |
| Owed if you do not move in? | Yes |
| When does it stop? | When title transfers |
| Upper limit | Interest + municipal taxes + common expenses |
Warranty, walk-through and closing adjustments
Several other things happen around this time. The one-year Tarion warranty on a condo starts on the occupancy date, not at final closing. That covers defects in work and materials, Ontario Building Code violations and unauthorized substitutions. So the clock on your warranty claims starts running while you are still paying interim fees.
Before you get the keys, the builder must do a thorough walk-through, called the PDI, with you and complete the PDI Form. You or a designate must attend, and a designate needs written authority to sign the form. Record anything damaged, incomplete, missing or not working, and take photos. The PDI Form is not a request for warranty service, so items still unfixed at move-in need to go on the Tarion Initial, Mid-Year or Year-End Form.
On money, condo builders must list extra charges and expected adjustments to the final price, with dollar values, in Schedule B of the Tarion Addendum. Check Schedule B early so the closing costs are no surprise.
What to do next
- Find the interim occupancy terms in your agreement and the disclosure statement, and see how the monthly fee is described.
- Compare the stated fee with the three parts the Act allows: interest, municipal taxes and common expenses.
- Budget for the fee as a cost that does not reduce your price.
- Read Schedule B of the Tarion Addendum for expected adjustments.
- Plan who will attend your PDI, and get written authority for any designate.
- Note your occupancy date, since your one-year warranty starts then.
- If the fee looks higher than the Act allows, or the terms are unclear, ask a real estate lawyer to review your agreement.
Frequently asked questions
How are interim occupancy fees calculated on a pre-construction condo in Ontario?
The fee cannot exceed the total of monthly interest on the unpaid balance of the price at the prescribed rate, the estimated monthly municipal taxes, and the projected common expense fees for the unit. Your agreement sets the actual amount, so check it against those three parts.
Do interim occupancy fees go toward the purchase price?
No. They are not credited to the purchase price. They are a cost of occupying the unit before title transfers.
Do I still pay if I do not move in?
Yes. The buyer owes interim occupancy fees whether or not they move in.
When do interim occupancy fees stop?
They stop when title transfers. That can only happen once the condominium corporation has been registered.
Sources
- Condominium Authority of Ontario – Pre-construction Condos — condoauthorityontario.ca
- Tarion – A condo buyer's guide to interim occupancy — tarion.com
- Tarion – Coverage for Freehold, Contract, Condo Units & Condo Conversions — tarion.com
- Tarion – The Pre-Delivery Inspection — tarion.com
- Tarion – Registrar Bulletin 06C Condominium Delayed Occupancy Warranty — tarion.com
- Condominium Authority of Ontario – Common Expenses — condoauthorityontario.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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