Purchasing a new condominium in Ontario involves a unique process that differs significantly from buying a resale property. Prospective buyers should be aware of the two distinct stages involved in this process: the Interim Closing and the Final Closing.
Stage 1: Interim Closing Occupancy Without Ownership
The interim closing marks the beginning of your journey as a condo owner, albeit without the legal title of ownership. During this phase, you are allowed to occupy the unit, but the official transfer of ownership awaits the final closing. The Role of the Interim Occupancy Agreement Your occupancy is regulated by an interim occupancy agreement, typically annexed to your Agreement of Purchase and Sale. This document outlines the terms and conditions of your occupancy, including any restrictions and obligations. Financial Considerations At this stage, you may be required to pay the remaining portion of your down payment. Additionally, the builder, also known as the declarant, is entitled to charge a monthly occupancy fee. This fee is subject to regulatory limits to prevent the builder from profiting during this period. Interestingly, you have the option to pay the full balance of the purchase price upon assuming interim occupancy, which could potentially reduce your occupancy fee. Restrictions on the Unit It’s crucial to note that there are often restrictions on leasing or selling the unit during the interim occupancy period. These restrictions are outlined in the Agreement of Purchase and Sale and must be carefully reviewed if you’re considering such actions before the title transfer.
Stage 2: Final Closing Achieving Full Ownership
The final closing is the culmination of the condo purchasing process. This is when you receive the title to your unit, signifying full ownership. If you have a mortgage, it will be registered against your title at this point. Completion of Documentation This stage also involves the exchange of additional legal documents, and it marks the termination of the interim occupancy agreement.
Key Takeaways Understand the Stages: Recognize that the term “closing date” during the interim period does not signify the completion of the purchase. The transaction is only fully closed at the final closing.
- Financial Obligations: Be prepared for the financial responsibilities during the interim period, including the down payment balance and the occupancy fee.
- Legal Restrictions: Be aware of any limitations on your rights to lease or sell the unit during the interim occupancy period. Given the complexity of the process, it’s advisable to seek guidance from a real estate lawyer to understand your rights and obligations fully.
Purchasing a new condominium in Ontario is a process that requires a thorough understanding of its unique two-stage closing. By familiarizing yourself with the interim and final closings, you can navigate this journey with greater ease and clarity. Always remember that professional advice is invaluable in such significant transactions, ensuring that your path to homeownership is as smooth and informed as possible.
