You do not have to pay rent, but you will have to pay the builder an “occupancy fee”. Occupancy fees are charged by the builder each month from the time you move in until the builder is able to transfer ownership to you. The amount a builder is permitted to charge as an occupancy fee is limited by law. Under the Condominium Act (Ontario), a builder can only charge occupancy fees that include the following three items: 1) an estimate of the property taxes for the unit; plus 2) an estimate of common expenses for the unit; plus 3) interest on the unpaid balance of the purchase price. Items (1) and (2) are costs a condominium owner will be responsible for as long as they own a unit, so these are non-controversial. Item (3) is similar to an interest only mortgage on the unpaid balance of the purchase price. For example, if the cost of the condominium was $500,000 and the buyer has paid deposits of $100,000 prior to occupancy, the unpaid balance of the purchase price would be $400,000. In this example, the builder would charge interest on $400,000 during the occupancy period. The amount of interest the builder can charge is limited by the Condominium Act (Ontario).
- December 6th, 2019
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