When purchasing a newly built condominium or townhouse, you may encounter a unique step in the closing process called an Interim Closing. At Fletcher Barrow, we guide our clients through interim closings to ensure everything proceeds smoothly and without surprises.
These can last several months before your mortgage begins.
You should arrange for appropriate home insurance coverage beginning on the date of interim occupancy.
Both the interim closing and final closing will require attention to paperwork and payments.
Although no mortgage is needed for interim occupancy, you must arrange your mortgage in advance of the final closing to avoid delays or complications.
If anything about your agreement or the occupancy fees seems unclear, we're here to help.
An Interim Closing occurs when you take possession of a newly built unit before the official transfer of ownership, also known as the Final Closing.
During this interim occupancy period, you are permitted to move into your unit, but you do not yet officially own it. Legal title remains with the builder until the final closing date, which typically happens once the entire condominium development is registered with the local municipality.
Interim closings are common in condominium projects because:
The individual units are finished and ready for occupancy,
But the entire building has not yet been legally registered as a condominium corporation.
Registration can take several weeks—or even months—after your occupancy date, depending on construction progress and municipal approvals.
During the interim period:
You will pay an occupancy fee to the builder, sometimes referred to as “phantom rent.”
This fee typically covers:
Interest on the unpaid balance of your purchase price,
An estimated share of common expenses (like building maintenance),
Estimated property taxes.
It is important to understand that these payments are not applied toward your mortgage or your purchase price.
At Fletcher Barrow, we assist with:
Reviewing your Agreement of Purchase and Sale to clearly explain interim occupancy provisions,
Coordinating with your lender and the builder during both the interim and final closings,
Reviewing the Statement of Adjustments provided by the builder,
Ensuring your legal rights are protected during both stages of the closing process.
Our goal is to make sure you fully understand your obligations and to minimize any surprises during the occupancy and final closing phases.
During the interim period:
It is important to understand that these payments are not applied toward your mortgage or your purchase price.