Dear David: We bought a brand-new freehold townhouse and have received interim occupancy. How long does it usually take for this type of unit to reach final closing? – WAITING PATIENTLY
DEAR WAITING: Your question concerns me because interim occupancy is not generally involved in the purchase of a freehold townhouse. In a freehold property purchase, you pay the builder, and the builder gives you the keys.
When you buy a brand-new common elements condominium (CEC) or parcel of tied land (POTL) townhouse, interim occupancy may be built into the purchase agreement.
While a complex is still under construction, builders may grant interim occupancy to owners as their individual units are finished. Interim occupancy allows the owners of these finished units to move in. The owners pay a monthly fee, which frees up cashflow for the builder as they work on the unfinished units and common elements. When the entire condo complex is complete and registered, the owners’ names go on title and they assume their mortgages.
Depending on the size of your complex and where you are in the building queue, interim occupancy may take anywhere from a few weeks to several months. If you happen to own one of the earlier builds, you’ll probably have a longer wait to reach final closing than the owner of the last unit built. A townhouse project will often move through interim occupancy faster than a high rise, since there tend to be fewer units and construction can be rolled out in phases.
Hopefully you’ve had the chance to develop a good relationship with your builder (or your builder’s representative) in the months since you bought your unit. If that is the case, I suggest reaching out for an update on the estimated closing date. In my experience, most builders are very close (or bang on target) when it comes to their closing dates, provided a global pandemic doesn’t get in their way.
PRO TIP
When you speak with the builder, ask whether your new townhome is a CEC or a POTL. Also have the builder provide you with a breakdown of your responsibilities as an owner. If the building is truly freehold, you’ll be responsible for all aspects of its physical structure. But when it comes to what may or may not be covered by your monthly fees, the variations are endless. #Advice #AskDavid #TheNegotiator
David is a top-selling Broker in Kitchener-Waterloo Region. He works personally with you when selling or buying your home. Moving? Get it right. Ask David today! Call or text 519-577-1212.
