Interim Occupancy vs. Final Closing: What Actually Happens Between Them

Most condo buyers assume "closing day" is one date: you get the keys, you own the unit, done. On a resale home that's true. On a pre-construction condo, it almost never is — you'll typically move in on interim occupancy first, then wait anywhere from a few months to well over a year before final closing actually transfers title to you. Nobody explains this clearly at the sales office, and it's the single most common source of "wait, I thought I already owned this" phone calls I get after move-in.

Two different dates, two different things

Interim occupancy is when the building is physically ready — or ready enough — for you to move in, but the condominium hasn't been legally registered yet. You get keys and possession, but the builder still holds legal title. Final closing happens once the condo corporation is registered with the province and title actually transfers to you. Everything between those two dates is a holding pattern: you're living there, but you're not the owner of record yet.

What occupancy fees actually cover

During interim occupancy you pay a monthly occupancy fee instead of a mortgage payment, because there's no mortgage yet — you can't get one on a property you don't legally own. That fee is roughly three things added together:

• Estimated interest on the unpaid balance of your purchase price (as if the builder had financed the rest of your purchase).
• Estimated property taxes for the unit, until the municipality assesses it directly.
• Estimated common expenses / condo fees for your share of the building's operating costs.

The part that catches people off guard: none of this pays down what you owe. It's not rent, and it's not a mortgage payment building equity — it's carrying cost on a home you're living in but don't yet own outright. Budget it like rent, not like a mortgage, even though the number often looks a lot like one.

Why the gap can run months to over a year

Registration isn't paperwork the builder can rush. It requires a final survey of the completed building, the condominium declaration and description being prepared and reviewed, and registration with the province's land registry system — on top of any municipal sign-offs still outstanding. Large or multi-phase buildings, or ones that hit construction delays, tend to sit in interim occupancy longer simply because there's more building left to finish and register. A one- to three-month gap is common; well over a year isn't rare on bigger projects.

What this means for your mortgage

Your mortgage doesn't fund — and your rate isn't locked in for real — until final closing, because that's the first point you actually have title to put on a mortgage. If your rate hold was arranged early and the interim occupancy period runs long, it can expire before final closing arrives, leaving you to requalify at whatever rates look like by then. Ask your mortgage broker specifically how your rate hold lines up against the builder's estimated (not promised) occupancy and closing dates before you rely on either number.

Budgeting for the gap

• Treat the occupancy fee estimate as a floor, not a ceiling — ask the builder how estimates compared to actuals on their last completed building.
• Don't assume you can walk straight from occupancy fees into a mortgage payment on a fixed date — build slack into your financing timeline.
• If you're carrying a current home at the same time, model the overlap explicitly. This is where buyers get squeezed hardest.
• Get the exact occupancy fee formula in writing, not a verbal estimate, before you rely on it for budgeting.

The one clause worth checking before you sign

Have a real estate lawyer review the occupancy fee formula and the statement of adjustments provisions in your agreement before firm signing, not after you've moved in and the number is whatever it is. This is general information, not a substitute for that review — the exact formula, caps (if any), and what's negotiable vary by builder and by agreement.