What are Occupancy Fees?

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Question: What are Occupancy Fees?

The occupancy period is the time between when you get you take occupancy of your suite and when final closing occurs.  Occupancy Fees can also be referred to as:

  • Interim Occupancy Fees
  • Phantom Rent

Assume a 60 storey condominium. The developer will build the outside shell first and then begin completing the suites from ground up.

If you purchased on floor 1, as soon as your unit is complete the developer will give you the keys and “occupancy” will begin. You don’t OWN the unit yet but you OCCUPY it. This process goes until approximately 75% of the building is OCCUPIED (in the example of the 60 storey condominium, that means once the suites on the 40th floor are complete) the developer will apply for condominium registration with the city and that is when final closing occurs.

During this period, the buyer is paying an “occupancy fee” which is essentially a rent on the unit until final closing. The occupancy fee includes three fees which are:

  • Maintenance Fees
  • Property Taxes
  • Interest on Balance Owed (typically 80% but can vary depending on your deposit structure)

Occupancy time frames vary depend on the size of the building.

Roy Bhandari