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Interim occupancy fee is the monthly amount a pre-construction condo buyer in Ontario pays the builder between taking possession and the building's final registration, covering interest on the unpaid purchase price, estimated common expenses, and estimated property taxes.
Section 82 of Ontario's Condominium Act, 1998 caps the fee at three components: interest on the balance of the purchase price not yet paid in cash, calculated at a prescribed reference rate; an estimate of the buyer's share of common expenses once the corporation registers; and an estimate of the municipal property taxes attributable to the unit. Because the building hasn't registered yet, the buyer doesn't hold title and isn't making mortgage payments or building equity during this period — the fee is closer to a placeholder for costs that will apply once ownership actually transfers.
Interim occupancy can last anywhere from a few weeks to well over a year depending on construction and registration delays, which matters for a broker's client: the buyer's actual mortgage doesn't fund until final closing (registration), so any rate hold, pre-approval, or bridge financing arranged for the interim period needs to account for a registration date that can move.
Governed by the Condominium Act, 1998: section 82 sets out the three components a builder may charge and caps the fee at their sum — interest, estimated common expenses, and estimated property taxes.
Interest uses a prescribed rate: the interest component is calculated using a reference rate set under Ontario Regulation 48/01, not a rate the builder can set arbitrarily.
Not a mortgage payment: because the buyer doesn't hold title until registration, the interim occupancy fee builds no equity and isn't a substitute for the mortgage payments that begin at final closing.
Larger cash deposits lower the fee: since the interest portion is calculated on the unpaid balance, a buyer who pays more cash on the interim closing date reduces their monthly interim occupancy fee.
For an illustrative $400,000 unpaid balance and a simplified 3% annual reference rate, one month's interim occupancy fee might break down as:
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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