A pre-construction condominium can be finished enough to live in months before it is legally finished enough to own. The building must be registered — the condominium corporation created, the title structure in place — before ownership of any unit can transfer. In between sits interim occupancy: you hold keys, you live in the unit, and you do not yet own it. This is the general framework under Ontario’s Condominium Act; your disclosure statement and agreement govern your project’s specifics.
What you pay, and what it is made of
During interim occupancy the buyer pays a monthly occupancy fee. Section 80 of the Condominium Act caps what the builder can put in it — the fee is built from three components, and only three:
- Interest on the unpaid balance of the purchase price, calculated at the rate the Act prescribes (tied to a published Bank of Canada rate benchmark). You have not paid the balance yet — your mortgage does not start until final closing — so this component is, in effect, the carrying cost of the money still owing.
- An estimate of municipal taxes for the unit for the month.
- The projected common-expense contribution for the unit — its share of the building’s operating costs.
The builder may not add a profit margin or a management markup on top: the fee is a cost-recovery formula set by statute, not a rent the market sets. Your disclosure statement estimates it per unit; the actual figure is set when occupancy begins.
Why buyers call it phantom rent
None of the occupancy fee reduces the purchase price. The interest component is not mortgage interest — no principal is being paid down, no equity is being built, and the balance owing on final closing day is the same as it was the day you got your keys, less only your deposits. Months of occupancy fees are the price of living in the unit during a period when the legal machinery to transfer it does not yet exist. It feels like rent because, mechanically, it is a carrying charge on a home you occupy but do not own.
What happens during the period
- Final deposits often fall due at occupancy. Many agreements schedule the last deposit instalment for the occupancy date — in this catalogue, occupancy fields sit alongside deposit schedules on project records for a reason; check both before budgeting the move-in month.
- Closing costs do not land yet. Land transfer tax, the HST settlement and your mortgage all wait for the final closing, which happens after registration. Budget them for that later date, not for key day.
- The period can run months. Registration timelines depend on the municipality and the project’s completion state. Your agreement and the builder’s notices — not the occupancy date — are what tell you how long the meter runs.
What ends it
Registration. Once the condominium is registered, title can transfer: the final closing follows, the balance is paid (usually with mortgage funds), the closing taxes and adjustments settle, and occupancy fees stop. Interim occupancy is therefore best read as a bridge with a toll set by formula — unavoidable in most new condo projects, predictable from the disclosure statement, and worth pricing into the purchase before you sign, not discovering after you have keys.
How the 10-day cooling-off period protects the signing stage — before any of this begins — is covered in the companion piece on this desk.