Interim Occupancy Cost
New Condos Interim Occupancy Cost In Toronto
What are Interim Occupancy Costs?
If you’ve been keeping up with some of my more recent blogs, you’ve probably noticed me talking about interim occupancy costs. Today, I’m here to explain this concept a little more so that there’s no more confusion and so that you’ll know exactly what factors add to the interim occupancy costs when you purchase a pre-construction condo. Let’s get started, shall we?
Interim Occupancy Costs: A Short Definition
Interim occupancy costs, also known as “phantom rent,” are – simply put – fees that you owe to the builder of a new condo when you move in before the rest of the building is finished and registered. The time spent in your condo during this time is known as the occupancy period. Per my knowledge, this circumstance is unique to the province of Ontario, so won’t run into it anywhere else in Canada but there.
Do You Own the Condo When Paying Interim Occupancy Costs?
Not yet. While the condo will eventually be all yours, you do not own it – or start paying your mortgage – until all construction is done and the condominium has been registered. Because you are living there without making monthly payments, you will owe money to the current “owner” – the developer of the building – to make up for the cost that your unit produces each month. While this can be seen as paying rent, this is not truly the case, hence the term “phantom rent.”
What Adds to Your Interim Occupancy Costs?
There are a few different things that contribute to the overall price of your interim occupancy costs month-to-month. For starters, interest will still be collecting on the total amount owed for your unit, and you will need to make up this amount once your unit is ready for you to move into. You will also owe taxes to the city on your unit, which will be closely estimated by the builder based on current rates. Of course, the monthly maintenance associated with your suite, building also needs to have electricity, water, and any other necessary utilities in order for you to be able to move in and the amount incurred each month will contribute to your interim occupancy costs, as well. Again, this amount will be estimated by the builder and divided amongst all tenants during the occupancy period.
Do You Still Owe Interim Occupancy Costs if You Don’t Move In Right Away?
There are many reasons why you may consider holding off moving into your new condo until it is registered with the city. For example, you may want to save yourself from the sounds of ongoing construction for the next year or so and would prefer to stay in your current home or keep renting an apartment for the time being. While that’s perfectly understandable, it doesn’t let you off the hook for interim occupancy costs. Even if you choose not to move in during the occupancy period, you will still owe money to the developer each month.
If You Have Any Other Questions or Concerns About Interim Occupancy Costs, Don’t Hesitate to Get in Touch!
As a real estate agent that specializes in pre-construction condos, I can guide you through on interim occupancy costs. Feel free to call me at 647-519-5751 or reach out to me by e-mail at info@trustcondos.ca to discuss this topic further. I’m always happy to help out and share my knowledge whenever I can!
Tangerine Link to an Interim Occupancy for New Condos
TheStar Link to Interim Occupancy Period
