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Ontario|Real Estate LawCondominiums 414 Buying a new condominium Buying a newly built condominium unit can involve a number of complicated issues. For example, often a buyer of a new unit may have to deal with an interim closing date, a final closing date, and occupancy fees. These all arise because the condominium cannot be registered until the building is fully constructed and the builder cannot give full legal ownership and title to the new buyers until registration. Although buyers can move into their units without legal title, they cannot own their units or obtain a mortgage loan until registration.
The Condominium Act contains rules about purchasing and moving into a condominium before it is registered. On the interim closing date, the buyers are permitted to move into their completed units even though the condominium is not yet registered and the builder cannot yet give them legal ownership. Instead of paying the balance of the purchase price, purchasers are required to pay an occupancy fee, similar to rent, until the final closing date when they get legal ownership. This fee covers expenses such as taxes, maintenance, and interest on the unpaid balance due on closing which usually is not paid until title closing.
When the condominium is registered, the purchaser can obtain mortgage funds and the builder will give the buyer the legal ownership of the unit. After this final closing date, the purchaser will not need to pay any occupancy fee, but will pay his or her mortgage, realty taxes, and common expenses instead.
Since the purchase of a new condominium can be complicated, the Condominium Act gives buyers of new condominiums a 10 day period from when the agreement is accepted during which they can cancel the deal. This is intended to allow purchasers time to review the condo documents and to seek legal advice. This 10 day period does not apply to resale condominiums.
If you are purchasing a condominium, your lawyer can help you to understand all of the documents, and obligations that apply to the condominium corporation and to your unit.
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