Many buyers discover after purchasing a pre-construction condo: why do I have to go through two closings?
This is one of the biggest differences between purchasing a pre-construction property and a resale home. Why are there two separate stages? It is because the transition from a building’s completion to the final transfer of property title is a lengthy process. The developer needs to register various legal documents for every single property unit; for a building with hundreds of units, this process can easily take anywhere from several months to a year. Therefore, once the building is constructed and meets occupancy standards, the developer will first arrange for the buyer to move in.
Stage 1 – Interim Occupancy (入住交接): At this point, the title has not yet been transferred, and the property still legally belongs to the developer. After moving in, the buyer must pay a certain fee to the developer, which essentially functions as a temporary rental arrangement.
Stage 2 – Final Closing / Title Transfer (产权转移交接): Once all documentation and legal formalities are fully completed, the developer will proceed with the final closing of the property with you. During this stage, the buyer must pay the full purchase price outlined in the contract to complete the transfer of funds. Concurrently, the developer will officially transfer the property title over to the buyer’s name. This is the actual legal property transfer stage.
To put it simply, the first closing is when you get the keys to move in, while the second closing is when you truly obtain legal ownership of the title. Buyers must plan their finances ahead of time to accommodate the time gap between these two closings, ensuring it does not impact their final mortgage approval and title transfer.
If you have any questions regarding the pre-construction closing process, please contact H. Law Firm for a professional consultation.
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H. Law Firm professionally handles real estate transactions across Ontario, providing comprehensive services in both Chinese and English for Chinese-speaking clients.
