Understanding Delayed Occupancy Compensation

In Ontario, once qualified for enrollment with Tarion, a condo developer can initially set its own tentative and outside occupancy dates for a new condo development. Once these dates are illustrated in the Statement of Critical Dates forming part of the Tarion Addendum forms appended to the developer’s agreements of purchase and sale, the condo developer must abide by strict notice requirements in order to delay occupancy. In short, once you are within 90 days of a tentative occupancy date that date becomes firm, and the only way for a developer to delay that date is: 1) by mutual agreement (where the purchaser agrees in writing to delay the critical dates and accept a new Statement of Critical Dates), 2) because of an unavoidable delay (i.e. act of god, strike, flood, war, pandemic etc…), 3) or by giving at least 10 days written notice of a Delayed Occupancy Date. The Delayed Occupancy notice would entitle the purchaser to $150 per day as compensation for making alternative living arrangements (no invoices or proof required) together with payment for any other associated costs (e.g. moving or storage costs, proof or invoices are required) up to $7,500.00 in total. If at least 10 days notice prior to the Firm Occupancy Date cannot be provided, then the builder will have to compensate the purchaser for an additional 10 days, but again, up to the $7,500.00 maximum in total.

In theory a developer can continuously delay their first tentative occupancy date by giving at least 90 days written notice (no excuse required) and so long as the date is before the Outside Occupancy Date (the date by which if occupancy is not yet provided, the purchaser has 30 days thereafter to terminate the agreement and get back their deposits and any statutory interest). However, a developer cannot delay tentative occupancy to a date that is beyond 120 days from the Final Tentative Occupancy Date. The Final Tentative Occupancy Date is the tentative occupancy date that falls after the date the condo’s roof assembly is completed (i.e. the construction of the roof seathing or slab etc…). If the Final Tentative Occupancy Date is not delayed prior to being within 90 days of the next tentative occupancy date, then it also becomes a Firm Occupancy Date. Notice of the Final Tentative Occupancy Date must be provided by the developer to purchasers within 30 days after the roof is assembled, otherwise the next tentative occupancy date becomes the Final Tentative Occupancy Date. In order to delay the Final Tentative Occupancy Date, at least 90 days prior written notice must be provided and it cannot be to a date that is beyond 120 days. Obviously with very tall or big condo developments, and as soon as it becomes practical, it would be wise for a developer to delay the tentative occupancy date next closest to the date the roof will be assembled. Otherwise the developer will be limited to 120 days once a tentative occupancy date becomes final. Even with 90 days prior written notice, delaying a Final Tentative Occupancy Date beyond the 120 days would be considered a Delayed Occupancy notice, and Delayed Occupancy Compensation would be payable for the time period falling after the 120 days until occupancy.

Read More: Closing Occupancy