---

Page 2

61

canadianrealestatemagazine.ca

Pages: 1 | 2 | 3 | 4 | 5 | 6 | 7 | Blog

finishes and the impressive model

suite, it’s crucial to remember

that these people do not represent

your interests. They work for the

developer under contract and are

legally bound to represent the

interest of the developer at all times.

Often, the sales staff are not

even registered sales representatives

and have little or no legal or real

estate knowledge, nor are they

qualified to interpret what is

contained in the large legally binding

purchase agreement.

One of the several clauses the

agreement deals with is interim

occupancy – the occupancy fees

sometimes referred to as a ‘phantom

mortgage’ for very good reason.

When a condo is physically

completed and is deemed ready to

occupy, the developer will tell you

that you must now begin paying

occupancy fees. This period is

usually referred to as the interim

occupancy, referring to the time

when the building is ‘mostly

completed’ and able to be lived

in, but before it has actually been

registered as a legal condominium,

which is required to actually get a

mortgage on the property.

Typical wording from this clause

might read:

“If the unit is completed sufficient

to permit occupancy thereof as

determined by the vendor (the

developer) by the occupancy date,

the purchaser shall take possession

‘

ph

ant

om

of the unit transfer date. The purchaser

shall pay an occupancy fee in advance

on the first day of every month until

the transfer date. No part of the

occupancy fee shall be credited towards

the purchase price on the transfer date.

The standard allowable period in most

agreements is 18 months.”

There is no noticeable difference in

this fee between builders, as they use

a similar calculation: the mortgage

amount (based on current posted

Legally speaking

Occupancy fee or interim closing

occurs once the governing

municipality deems the unit is

habitable and it must be occupied.

During this phase, the lower

floors usually move in first and

there will be a period that residents

may feel like they’re living in a

construction zone.

The earlier you move in, then the

longer you pay the ‘rent.’This fee

Source: Denise Lash, condominium/real estate lawyer, Heenan Blaikie, Toronto

comprises three components:

estimate of realty taxes, common

expenses and the interest on the

unpaid balance of the purchase price.

In Hassan Walji’s case (see p62), he

or his lawyer should have confirmed

with the city that the unit was, in

fact, occupiable.

Unfortunately, however, this is all

clearly spelled out in the Agreement

of Purchase and Sale.