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WHAT IS AN OCCUPANCY CLOSING?
When purchasing a new property in Ontario it is likely that there will be an occupancy closing and a final closing. In an occupancy closing, the prospective buyer takes occupancy of the property and pays occupancy fees to the builder without having legal ownership of the property. On the occupancy closing, the prospective buyer is generally expected to produce post-dated cheques for the occupancy fees, provide proof of fire insurance, pay a portion of the closing price, and deliver proof of financing for the final closing. While all the above may not be required by a builder on the occupancy closing, it is important that you discuss such requirements with your real estate lawyer ahead of time to ensure there are no surprises when you approach the occupancy closing. Once you take possession of the property on the occupancy closing date, it is important that you closely follow rules put in place by the builder regarding your possession of the property. For example, it is likely that the builder has included specific clauses in the agreement of purchase and sale which prevent the buyer from renting out the property during the period between the occupancy date and the final closing date. Similarly, you may not be allowed to advertise the property for sale or assignment during this period. In our experience, the period between the occupancy closing and the final closing is typically between 3 – 12 months. Once the builder has registered the condominium declaration with the Land Registry Office, their solicitors will reach out to you and your legal representative advising you of the date set for the final closing.
Contact us if you require legal assistance with a real estate transaction. Our real estate law team has the experience and knowledge to assist you throughout every step of the transaction.
Disclaimer: The information contained in this article is not to be construed as legal advice. The content is drafted and published only for the purpose of providing the public with general information regarding various real estate and business law topics. For legal advice, please Contact us.
About the Author:
Shahriar Jahanshahi is the founder and principal lawyer at Jahanshahi Law Firm with a practice focus on representing business star-ups and investors in the province of Ontario. For further information about Shahriar Jahanshahi, click here.
