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Get My Free Estimate →Interim occupancy is living in the unit before you own it, and the fee does not reduce the purchase price by a single dollar. Under s. 80(4) of the Condominium Act, 1998 the fee may not exceed the total of three things: interest on the unpaid balance at the prescribed rate, an estimate of municipal taxes, and the projected common expense contribution. The prescribed rate is set by O. Reg. 48/01, s. 19(1): the Bank of Canada’s posted chartered bank one-year conventional mortgage rate, as at the first of the month you take occupancy — 5.49 per cent as at 26 August 2026 — and it is fixed once, not floating. Occupancy is not a tenancy: s. 80(10) disapplies the Residential Tenancies Act protections and s. 81(2)(b) excludes occupancy fees from deposit trust protection.
Interim occupancy is the period between moving into a new condominium unit and actually owning it. You live there, you pay a monthly fee, and none of that fee touches the purchase price. For buyers who signed in 2021 and 2022 and are taking occupancy now, this period is where the difficulty is concentrated.
What it is, in the statute
Condominium Act, 1998, s. 80(2): interim occupancy means “the occupancy of a proposed unit before the purchaser receives a deed to the unit that is in registerable form.” Section 80(1) allows the agreement of purchase and sale to permit or require it.
You cannot own the unit until the condominium is registered, and registration happens on the declarant’s timetable. Until then you occupy under the agreement, not as an owner and not as a tenant.
What the occupancy fee is made of
Section 80(4) is the provision to know, and it is a cap, not a menu. The declarant may charge a monthly occupancy fee “which shall not be greater than the total of the following amounts”:
| Component | Section 80(4) wording |
|---|---|
| Interest | “Where applicable, interest calculated on a monthly basis on the unpaid balance of the purchase price at the prescribed rate.” |
| Municipal taxes | “An amount reasonably estimated on a monthly basis for municipal taxes attributable to the unit.” |
| Common expenses | “The projected monthly common expense contribution for the unit.” |
None of it pays down principal. Not one dollar of an occupancy fee reduces what you owe on the purchase price. It is interest, tax and common expenses. People occupy for a year, pay tens of thousands, and are surprised at final closing to find the purchase price is exactly what it was.
The prescribed rate, which almost nobody states
Every explanation of interim occupancy I could find says “interest at the prescribed rate” and stops there. Here is the actual provision. O. Reg. 48/01, s. 19(1), under the heading “Sale of units”:
“The prescribed rate of interest for the purpose of paragraph 1 of subsection 80 (4) of the Act shall be the rate of interest 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 assumes interim occupancy of a proposed unit or is required to do so under the agreement of purchase and sale.”
Three things follow from that, and each of them matters:
- It is the posted one-year conventional mortgage rate. Not the policy rate, not the bank rate, and not a discounted rate anyone could actually borrow at. The Bank of Canada publishes it as series V80691333. As at 26 August 2026 it stood at 5.49 per cent.
- It is fixed once. Set on the first of the month you take occupancy, or are required to. It does not float afterwards. Take occupancy in a high-rate month and you carry that rate for the whole occupancy period.
- It is a different rate from the deposit-interest rate. O. Reg. 48/01, s. 19(3) prescribes a separate rate for ss. 73(3), 74(9) and 82 — the bank rate minus two per cent, reset each 1 April and 1 October — and s. 19.1 prescribes a third. Do not let anyone conflate them.
The rate matters more than most people expect. On a $560,000 unpaid balance the difference between 4.5 per cent and 5.5 per cent is about $467 a month, or $5,600 over a year of occupancy, none of which comes back.
What your occupancy fee is made of
Section 80(4) caps the fee at the total of three things. Put your numbers in and see the split — and how much of it is gone rather than banked.
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The protections
| Protection | What it does | Section |
|---|---|---|
| Right to pay in full | Before the rescission period expires, a purchaser may elect to pay the balance of the purchase price on assuming occupancy — which removes the interest component from the fee entirely. | s. 80(3) |
| Reserve fund portion held in trust | Where occupancy runs beyond six months and the fee includes a projected reserve fund contribution, that portion for each month after the sixth must be held in trust and remitted to the corporation on registration. | s. 80(5) |
| Tax refund | On delivering a registerable deed, the declarant must refund the portion of occupancy fees paid on account of municipal taxes that exceeds the amount actually assessed. | s. 80(8) |
| Declarant duties | The declarant must provide the services the corporation will have to provide, and repair and maintain the property as the corporation will have to. | s. 80(6) |
| Notice of registration | The declarant must notify the purchaser in writing of the date and instrument numbers of registration within 30 days. | s. 80(6) |
| No unilateral termination for delay | A declarant is not entitled to terminate the agreement by reason only of failing to register within a period specified in the agreement, unless the purchaser consents in writing. | s. 79(2) |
The s. 80(3) right is the one worth knowing about early, because it expires with the rescission period. A purchaser who can pay the balance in full on assuming occupancy removes the largest component of the fee. Whether that makes financial sense is a question for your own advisers — but you cannot make the choice at all if you learn about it after the ten days.
Occupancy is not a tenancy. Section 80(10) provides that ss. 149, 150, 151, 165, 166 and 167 and Part VII of the Residential Tenancies Act do not apply to interim occupancy or to occupancy fees. There is no rent control on an occupancy fee, no Landlord and Tenant Board jurisdiction, and none of the tenant protections apply. And under s. 81(2)(b), occupancy fees are expressly excluded from the trust requirement that protects deposits — that money is not held in trust and is not recoverable as a deposit.
The appraisal gap
This is the actual problem for 2021 and 2022 purchasers, and it is worth setting out mechanically rather than dramatically.
You agreed a price years ago. At final closing your lender will lend against the property as valued now. If the appraisal comes in below the purchase price, the lender lends against the lower figure, and the difference has to be found in cash on top of the down payment you had already planned for. Meanwhile occupancy fees have been running throughout, and none of them counted toward the price.
The market context, from Urbanation’s Q2 2026 report: completed, developer-held inventory reached a record 5,001 units, up 68 per cent year over year, and standing inventory of new and resale units together was 12,106. I am not going to tell you what that does to any individual valuation — that is what an appraisal is for — but it is the environment the appraisal happens in.
The single most useful thing to do is get the appraisal question addressed early, well before final closing, so that if there is a gap there is time to deal with it. A gap discovered two weeks out is a crisis. The same gap discovered four months out is a problem with options.
What to ask, and when
- Before the ten days are up: do I want to exercise the s. 80(3) right to pay the balance in full on occupancy, and what would that cost me elsewhere?
- At the start of occupancy: what is the projected registration date, and what is the breakdown of my occupancy fee across the three s. 80(4) components? You are entitled to know, and the split tells you whether the fee is at the statutory ceiling or below it.
- Immediately: is my mortgage commitment still valid, and what is its expiry date? Pre-construction commitments have expiry dates and they arrive quietly.
- Early: what will the lender do if the appraisal comes in below the purchase price, and how much cash would that require?
- Before final closing: what is the refund of the municipal tax component under s. 80(8)?
In occupancy with a final closing coming?
If you are in interim occupancy on a unit you agreed to buy in 2021 or 2022, the appraisal question needs to be raised now rather than at closing. I can tell you what comparable units are actually transacting at so you know what you are dealing with, and I will give you the real number rather than a comfortable one.
connect@jatindua.com · 437-987-1925 · Book a free consultation
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Frequently asked questions
What interest rate applies to an interim occupancy fee?
O. Reg. 48/01, s. 19(1) prescribes the rate the Bank of Canada has most recently reported as the chartered bank administered interest rate for a conventional one year mortgage, as at the first of the month in which the purchaser assumes interim occupancy or is required to. It is the posted one-year rate, not the policy rate and not a discounted rate. As at 26 August 2026 that rate was 5.49 per cent.
Does the occupancy interest rate change during occupancy?
No. It is fixed by reference to the first of the month in which occupancy is assumed or required, and it does not float afterwards. Taking occupancy in a high-rate month means carrying that rate for the whole occupancy period.
Does my occupancy fee go toward the purchase price?
No. Under s. 80(4) the fee is capped at the total of interest on the unpaid balance, an estimate of municipal taxes, and the projected common expense contribution. None of those components reduces the purchase price.
Can I avoid the interest portion of the occupancy fee?
Section 80(3) allows a purchaser, before the rescission period expires, to elect to pay the balance of the purchase price on assuming occupancy. Doing so removes the unpaid balance and therefore the interest component. The right expires with the ten-day rescission period, so it has to be considered early.
Is interim occupancy a tenancy?
No. Section 80(10) provides that specified provisions of the Residential Tenancies Act and Part VII of that Act do not apply to interim occupancy or occupancy fees. There is no rent control on an occupancy fee and no Landlord and Tenant Board jurisdiction.
Are occupancy fees held in trust?
No. Section 81(2)(b) of the Condominium Act expressly excludes occupancy fees from the trust requirement that applies to deposits. One exception: where occupancy runs beyond six months, s. 80(5) requires the projected reserve fund portion for each month after the sixth to be held in trust and remitted to the corporation on registration.
What is the appraisal gap?
The difference between the price you agreed years ago and what the property appraises at now. Your lender lends against the appraised value, so a shortfall has to be covered in cash on top of your planned down payment. It is the main risk facing pre-construction purchasers from 2021 and 2022 at final closing.
Can the builder cancel because registration is late?
Section 79(2) provides that a declarant is not entitled to terminate an agreement of purchase and sale by reason only of failing to register the declaration and description within a period specified in the agreement, unless the purchaser consents in writing. Section 79(3) allows the declarant to apply to the Superior Court of Justice on 15 days’ notice.
Related reading
- Your builder is insolvent: what happens to the deposit
- Tarion’s 45-day notice rule and the 1 January 2027 change
- Cancelled projects: 11,653 units and what cancellation means
Sources
Every figure on this page traces to one of these, and each was read on 30 August 2026. Primary sources only — statute, regulation, and the government or agency that administers the rule. Where I could not verify something from a primary source, the page says so instead of guessing.
- Condominium Act, 1998, S.O. 1998, c. 19. e-Laws. Section 73 sets the ten-day rescission right; section 80 governs interim occupancy and occupancy fees; section 81 governs money held in trust. Accessed 30 August 2026.
- O. Reg. 48/01 under the Condominium Act, 1998 (General). e-Laws. Consolidation from 20 July 2026. Sections 27 to 33 govern reserve fund studies and the funding plan; s. 18 prescribes the status certificate; ss. 13.1 to 13.11 govern records requests. Accessed 30 August 2026.
- Bank of Canada — conventional mortgage rate, 1 year (series V80691333). Bank of Canada. The chartered bank administered interest rate for a conventional one year mortgage — the input named in O. Reg. 48/01, s. 19(1) for interim occupancy interest. Accessed 30 August 2026.
- Condominium units: coverage for occupancy dates, delays and cancellations. Tarion. Delayed occupancy compensation of $150 per day to a maximum of $7,500, and the 90-day notice requirement to change a date. Accessed 30 August 2026.
- GTHA new condo sales increase over 50% in Q2. Urbanation, 20 July 2026. Q2 2026 data for the Greater Toronto and Hamilton Area, including the running cancellation total since the start of 2024. Accessed 30 August 2026.
- Condominium Authority of Ontario. The provincial authority for condominium education, the public condominium registry, and the Condominium Authority Tribunal. Accessed 30 August 2026.
About the author — Jatin Dua, Etobicoke real estate agent
I’m the Broker of Record at RE/MAX Quantum Realty, 799 The Queensway in Etobicoke. I write these pages the same way I work a file: read the primary source, quote it, date it, and say plainly where the source is silent or where two sources disagree. If a figure on this page has no citation beside it, that is a mistake and I want to hear about it.
I work with buyers, sellers, renters and investors across Etobicoke, Mimico, Humber Bay Shores, New Toronto, Long Branch, Alderwood and Stonegate–Queensway. connect@jatindua.com or 437-987-1925.