Closing & occupancy
Is there interim occupancy on a freehold home?
No. Interim occupancy and occupancy fees are a condominium feature, caused by the time between a building being habitable and the corporation being registered. On a freehold home there is a single closing, you take title and possession on the same day.
No, and this is one of the genuine financial advantages of buying low-rise rather than a condominium.
What interim occupancy is, and why condos have it
A new condominium building becomes habitable floor by floor, but title cannot transfer until the condominium corporation is registered, which happens after the whole building is complete and the municipality and land registry have done their part.
That creates a gap. The condo buyer is allowed to move in and occupy the unit during it, but does not own anything yet. During interim occupancy they pay the builder a monthly occupancy fee roughly comprising notional interest on the unpaid purchase price, estimated taxes and estimated common expenses.
That money is not a mortgage payment and builds no equity. It is often described as “phantom rent,” and on a downtown condo the gap can run many months, occasionally more than a year, at $2,500 to $4,000 a month.
Why freehold does not have it
A freehold home is a complete parcel with its own title. There is no corporation to register and nothing to wait for. When the home is finished and the municipality permits occupancy, you close: title transfers, your mortgage funds, you get the keys, and you start paying a mortgage on a home you own.
One closing. No occupancy period. No occupancy fees.
What this is worth
On a comparable purchase, avoiding six months of occupancy fees at $3,000 a month is $18,000 that buys you nothing in a condo and simply does not arise on a freehold home. It rarely features in the comparison buyers make between a condo and a townhome, and it should.
It also simplifies the whole end of the transaction: one date to plan around, one set of funds, one move. Delays still happen, but you are not paying to live somewhere you do not yet own while they resolve.
The one freehold wrinkle
If your freehold home sits on a POTL tied to a common elements condominium corporation, there is a monthly fee for the shared elements, private road, visitor parking, snow clearing on common areas. That is an ongoing maintenance fee, not an occupancy fee, and it is usually modest. More on POTLs.
What you do pay at closing
A freehold closing has no occupancy fees but it does have a substantial list of adjustments and levies, typically $30,000 to $45,000 all in on a $1.1M home outside Toronto. Full breakdown.
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