A pre-construction condo investment requires time and patience on behalf of the buyer as builders work tirelessly to erect the building as quickly as possible.
As the building nears completion, there are two different stages of occupancy pre-construction buyers need to understand.
Interim occupancy date
As the building approaches completion and most of the units are finished and liveable, the developer will start allowing owners access to their units. The units on the lower floors are usually complete and ready before those on higher levels.
Because the building is still receiving its final touches, whether that be roof installation, balcony finishing, landscaping, or lobby/hallway detailing, it cannot be registered with the city as complete.
Owners will be let into their units and asked to pay an Interim Occupancy fee, which is essentially rent to the developer until they can close the building at completion. This temporary window can last between 3 and 8 months depending on the builder.
Your mortgage will not be triggered, as you haven’t been given the title to the property yet.
Closing date and Official occupancy
Official occupancy will start once the developer gets the go ahead and is able to register the building with the city. A transfer of land will occur, and owners will become the titleholders to their units.
When your real estate lawyer contacts you with your final closing date, it’s important to contact your bank and let them know. Keeping your bank in the know will ensure an effortless closing, one where all costs are covered to make room for mortgage repayment.
A variety of paperwork will ensue clarifying the Statement of Adjustments, which will detail property taxes and condominium fees; an explanation of the transfer of funds; plus, any additional closing costs to be covered before the title is transferred.
Once the closing process is complete, the buyer will receive the official title to the property and their mortgage will begin.