preconrealestateca's blog

Interim occupancy, also known as interim closing or interim possession, refers to the period between when a buyer takes possession of a newly constructed condo unit and when the condominium is officially registered and the title can be transferred to the buyer.

Here are some aspects of interim occupancy that developers might not extensively highlight:

1. Paying Occupancy Fees: During this period, buyers typically pay an "occupancy fee" to the developer instead of a mortgage payment. This fee covers the developer's estimated expenses for the unit, such as maintenance fees, property taxes, and interest on the unpaid balance.

2. No Ownership Rights: While occupying the unit, the buyer doesn’t have ownership rights or equity in the property. They cannot make structural changes or modifications and may have limited control over the unit during this period.

3. Delays in Condo Registration: The duration of interim occupancy can vary and might extend beyond the initially estimated timeframe. Delays in construction, obtaining necessary permits, or other unforeseen issues can prolong this period.

4. Risk of Changes in Market Value: The final closing and transfer of title might happen months after occupancy begins. During this time, market conditions can change, affecting the property's value.

5. Potential Discrepancies in Final Closing Costs: The final closing costs, which include adjustments and other fees, might differ from the initial estimates provided by the developer. Buyers should be prepared for potential discrepancies and additional expenses.

6. Limited Legal Recourse: In case of disputes or issues during the occupancy period, buyers might have limited legal recourse since they don't yet hold the title to the Interim Occupancy.

It's crucial for buyers to thoroughly review the occupancy agreement and consult with legal and financial advisors to understand the terms and implications of interim occupancy before purchasing a newly constructed condo. While developers may not explicitly hide these aspects, they might not emphasize them as much as other selling points. Buyers should conduct due diligence and be aware of all the details and potential risks associated with interim occupancy.