WHAT IS A CONDOMINIUM OCCUPANCY CLOSING?



September 8, 2020

If you are buying a brand new condominium, the paperwork and entire process can be confusing and overwhelming.  Aside from the complexities of signing the actual Agreement of Purchase and Sale which can be 50 to 60 pages in length, many Buyers are not aware of the unique aspects of closing a pre-constructions condominium purchase. In particular, they are not aware that when a brand-new condominium is purchased from a builder, there are actually two closings. The first closing, which I will discuss in more detail in this column, is the occupancy or interim closing. The second closing is the final closing and this is when the Buyer becomes the registered owner of the property and begins making its mortgage payments. The occupancy closing takes place prior to the final closing and here are some important points to be aware of:

 

 

Finally, if the Buyer is plans to occupy the property following the interim occupancy closing, I always recommend that the Buyer change its identification documents such as its driver’s license to reflect the address of the property being purchased.  Many builders will require confirmation in the form of photo identification confirming that the Buyer is actually living in the property. Without this, the builder can take the position that the Buyer does not qualify and will have to pay for HST rebate on the final closing which will result in the Buyer having to pay the additional HST on the final closing. This amount is usually approximately $24,000.00.

 

Knowing the difference between an interim occupancy closing and a final closing is important so that Buyers can be prepared and helps ensure a smooth and hassle free transaction.

 

Article Courtesy of:

LORNE SHUMAN

Isenberg & Shuman Professional Corporation

5075 Yonge Street, Suite 804

Toronto, ON M2N 6C6

Tel: 416-225-5136 x216

www.shumanlaw.ca

 

 

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