OCCUPANCY CLOSING
What is an “occupancy closing date”?
An occupancy date or occupancy closing date is the date when a residential condominium home will be completed and will be ready for Occupancy or Possession by a Purchaser. This date is most commonly termed as a “Tentative Occupancy Date” in your Agreement of Purchase and Sale. Although a Purchaser moves into the unit on this date, but the title to the property will not be transferred to the Purchaser on this date. Title transfer takes place once the Condominium Corporation is registered. The title transfer date is known as the “final closing” date. If the Purchaser has provided the Vendor (Builder) with his/her lawyer’s contact information, then the lawyer will be notified once the final closing date is known or set by the Builder.
What is the difference between an “occupancy closing date” and a “final closing date”?
Legally, a Purchaser does not own the unit until the final closing date. However, once the occupancy closing is completed, a Purchaser will have occupancy of the unit and will be responsible to pay for all occupancy fees, utilities and insurance on personal belongings.
A Final closing is the date upon which a Purchaser will receive title. On final closing, the Purchaser’s lawyer will receive the closing package from the Builder, which includes a Statement of Adjustments. On final closing, in exchange for the payment of the outstanding balance for the unit, the Purchaser’s lawyer will receive a deed/transfer of title to the unit. The Purchaser’s lawyer will then register the title in the Purchaser’s name once the Builder’s lawyer has released the Transfer for registration. It is important to remember that a lender will only advance the mortgage funds on the final closing date, but the Builder may require that a confirmation of funding (mortgage loan approval) from the lender be provided at time of occupancy. Generally, final closing occurs approximately 2-4 weeks after the condominium is registered. Once the title is transferred to the Purchaser’s name, the Purchaser stops paying for the interim occupancy fees and starts to pay the mortgage payments, maintenance fees, property taxes, full insurance, etc.
What are occupancy fees?
Occupancy fees are monthly payments made to a builder to cover the interest costs on the outstanding balance of the price of the Unit and other general costs related to the unit. Occupancy fees are paid during the occupancy period, from the date of occupancy of the unit to the final closing date.
How are occupancy fees established?
Occupancy fees are comprised of three components: Estimated Property Taxes, Interest on mortgage balance – at a rate prescribed by the Condominium Act and Monthly maintenance fees. The Statement of Adjustments provided to a Purchaser’s lawyer on the Occupancy Closing date will generally provide a detailed explanation and breakdown of the calculation of the occupancy fees.
What are maintenance/condominium fees?
Maintenance/Condominium fees are monthly fees charged for the maintenance of the proportionate share of the regular upkeep, management, administration and insurance of the “Common Area Elements” pertaining to your specific Unit. The common area elements may include, but are not limited to, elevators, recreational areas, roads, parking, landscaping, streetlights, irrigation systems, cleaning of common areas, etc. Each condominium owner’s portion of these expenses is set out in the Budget Statement which is provided while signing the Agreement of Purchase and Sale and/or on Occupancy Closing. A Budget Statement provides the percentage that each homeowner is responsible for.