Occupancy fees are payable by the purchaser from the time of the occupancy closing until after the registration of the condominium corporation and the title closing. The Act provides that these payments cannot exceed the maximum amount the purchaser would pay for the following :
- Estimated common expenses according to the developer's disclosure budget
- Estimated realty taxes for the unit as if the unit was separately assessed; and
- Interest on "unpaid balance due on closing" on the purchase price. Until the condominium corporation is created, there is no "Unit"; ownership cannot be transferred and the purchaser is unable to obtain a mortgage. Therefore, from the date of interim occupancy until title closing, the developer will normally not receive the full purchase price from the purchaser. That unpaid amount is known as the "balance due on closing". For example, if the purchase price of a unit is $200,000 and the deposits paid by the purchaser total $50,000, the difference is known as the "balance due on closing". The $150,000 is the amount upon which interest is paid during interim occupancy.
The amount of interest payable on the unpaid balance due on closing is the rate that the Bank of Canada has most recently reported as the chartered bank administered interest rate for a conventional one-year mortgage as of the first of the month in which the purchaser occupancy closing occurs (see www.bankofcanada.ca for rates).