Can You Rent Out Your Condo During Interim Occupancy?

With the unstable Condo market in Toronto, many pre-construction buyers are searching for the best options to reduce potential losses. Some choosing to sell their property or renting it after the closing. However, buyers may be able to rent their unit during the interim occupancy period, a period where buyers take possession of their respective unit but don’t have ownership rights, till the final closing. It is also important to validate your ability to rent during the occupancy period, speaking with your lawyer to find if you have permission to rent during your occupancy, as it would vary from builder to builder with potentially varying restrictions. To learn more about renting your unit during the interim occupancy, contact Trust Condos today to learn how we can help you to navigate the market and help reduce possible risk factors.

What is Interim Occupancy?

In Ontario, prior to a building being registered, the period between occupancy and final closing is referred to as the “interim occupancy”, where pre-construction buyers are given possession of their units but do not have ownership rights. During this period, you can move into your unit, and you must pay Occupancy fees, potentially including the maintenance fees, property taxes, and interest on the unpaid balance of the purchase price.

It is also important to know that you are not officially the owner of the condo unit until the final closing, where the builder registers the building as a condominium. If you are intending to Lease the unit during interim occupancy, be sure to obtain the right to lease during interim occupancy written permission from the developer when you sign the contract. You can discuss more about this in detail with your real estate Lawyer with in 10 day of cooling period or before signing the contract. You can also discuss this matter in detail with the Trust Condos team, and we can help you to rent your property during interim occupancy.  

Can I Lease the Condo Unit During Interim Occupancy?

You are not considered the condo unit owner until the building registration process is complete. Most Agreement of Purchase and Sale clearly mentions that the unit cannot be leased until ownership transfers to the buyer. Breaching the clause may lead to serious consequences. It will also be considered a breach of contract if anyone does so.

The Trust Condos team is always ready to assist you. Our experienced team will guide you on the right track to avoid serious penalties and the risk of financial losses.

What are the Risks of Leasing Without Builder/Developer Consent?

Leasing the condo unit without the consent of the developer may lead to several risks, as follows:

• Legal Action: If you breach the contract by leasing the unit without the developer’s consent, you may face serious consequences for breaching the APS.
• Termination of Agreement: The developer may have has the right to terminate your purchase agreement. You may have to bear financial loss, and it will also affect the value of your property. You must take the APS seriously and wait for the right time.
• Financial Loss: If the developer takes initial legal action against you for breaching the APS, you will ultimately suffer a serious financial loss. Avoid taking the risky gamble.

What are the Best Practices for Prospective Buyers?

These points will greatly help you in this situation, and you have to follow these points seriously.

• Carefully Review the APS: Pre-construction condo unit buyers need to read the APS (Agreement of Purchase and Sale) carefully to avoid future risks before signing. If you are taking help from an efficient and smart real estate advisor like Trust Condos, you will get a detailed explanation of all clauses that may not force you to breach the APS.
• Consult a Real Estate Lawyer: It is important to communicate with the appropriate legal professional to understand your agreement of purchase and sale.  
• Communicate with the Developer: If you plan to lease the condo unit, prior to signing the contract communicating with the developer is a good option. Helping understand the condo rules and ensure you are following the right direction.

Trust Condos Can Help

Whether you are looking to sell a condo, townhome, or detached property in the GTA region, Trust Condos is a professional real estate expert you can trust. We have decades of experience offering professional help in the property buying and selling industry. Our experienced and skilled realtors have the right contacts to help sell properties faster at the right price. So, contact us today and schedule an appointment for your visit to learn more. Moreover, you will also get our complete support for the interim occupancy cases, and we will surely find the right direction for you. Call us to set an appointment with our professional real estate advisors today!

The information on this blog is based on our experience. Readers/Users are strongly recommended to obtain independent property, mortgage, legal, tax or accounting advice. The information displayed is for reference only and is without any representations and warranties.