What Is Delayed Occupancy? Everything Condo Investors Need to Know
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When it comes to purchasing a Canadian condo, there are many things that you need to keep in mind. There is no denying the fact that owning a condo offers you far more convenience than any other home. This property alternative is becoming a popular choice for both buyers and sellers.
All thanks to a significant number of people investing in it. Yet, there are other issues to consider, and one of them is ‘delayed occupancy. Keep reading to find out more.
What is ‘Delayed Occupancy’?
Delayed occupancy is a concept unique to condo developments. Yet it is one of the most confusing aspects. especially for both buyers of pre-construction condos and investors of finished condominiums. ‘Delayed occupancy’ occurs when you are unable to occupy the unit you have purchased.
This may be due to builder delays in the construction of a new building, or even personal reasons. In such a scenario, you will have to wait for a certain period before shifting into your own unit.
What Are the Two Important Dates That You Need To Know As An Occupant?
It is critical to get information about the:
- Firm occupancy date &
- Outside occupancy date
Once the developer has sent out a possession letter. The reason for this is that if there is a significant delay in the unit’s handover. In such a situation, you can either stop or seek extra compensation.
Meaning of Firm Occupancy Date
- The firm occupancy date is the earliest possible date that you could move into your unit. It is the date that the builder commits to finishing all the work on your unit.
- This firm occupancy date is important in any form of real estate sale. This is because the developers want to get their clients into the building as soon as possible.
- Turn over ownership of the units/flats to collect rent and capital appreciation.
Meaning of Outside Occupancy Date
- The outside occupancy date is the first day of the timeframe when you are a tenant.
- This is when you have legal rights to use your unit.
- Outside occupancy is an important date as it establishes the length of the rental term.
- It also controls your security deposit liability, rent abatement, and other legal issues.
What is the Delayed Occupancy Compensation?
It is one of the most significant clauses in a condominium association document. In this agreement, the organization promises to pay the buyer if he is not given occupancy by the date. The amount of compensation is determined by the facts of the case and the bargaining power of the tenant.
