Short answer
During interim occupancy, the buyer may live in the unit but does not yet own it because the condominium has not registered. The buyer pays the developer an occupancy fee rather than regular mortgage payments.
The buyer’s real concern
The buyer budgets only for the future mortgage and is surprised by months of occupancy fees that do not reduce the mortgage principal. The final closing and appraisal risk still remain ahead.
What the official rule or guidance says
CAO explains that interim occupancy fees can include interest on the unpaid purchase balance, estimated municipal taxes and projected common expenses. Title and the mortgage closing generally follow registration.
What this protection does not guarantee
An occupancy fee is not rent in the ordinary landlord-tenant sense and is not mortgage principal. Moving in does not guarantee that final financing is approved or that the appraisal will equal the contract price.
A practical Ontario example
Illustration only: A purchaser occupies for eight months and pays $3,200 monthly. At registration, the appraisal is below the original price and the buyer still needs additional funds for final closing despite having paid occupancy fees.
What to do now
Budget occupancy and final closing separately. Ask the lawyer to review the fee calculation and adjustments. Keep income, credit and down-payment funds stable, renew the mortgage approval as required and prepare an appraisal-shortfall strategy before registration.
Questions to ask before the deadline
- Which document or delivery date starts the legal deadline?
- What can the builder change, delay, charge or refuse under the agreement?
- Could occupancy fees, adjustments or a lower appraisal create a cash shortfall?
- Will the mortgage approval and rate hold still be valid at final closing?
- Which issue needs a lawyer, accountant, inspector, appraiser or mortgage broker?
Rajiv’s broker perspective
A builder purchase creates two timelines: the legal contract and the future mortgage closing. A cooling-off right or warranty protection cannot replace a financing plan, and today’s pre-approval cannot guarantee the appraisal or income position years later. I would test the future closing conservatively, keep the buyer’s credit and funds traceable, and prepare A, alternative/B and—only where sensible—short-term MIC or private fallback options before the deadline becomes urgent.
Related: Real Estate Centre · Mortgage Knowledge Centre · Updates & Rules Centre
Offer signed—or worried about the future closing?
Send Rajiv the purchase price, deposit, expected occupancy or closing date and the financing concern. He can test the mortgage path and help identify which independent professional should review the next risk.
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