Importance of having permission to lease clause during interim occupancy

  • by Vinny Soni
  • 1 year ago
  • Investment, Pre-construction, Vinny Soni
  • 1

The occupancy period starts when your municipality declares the building as “fit for occupancy”. During the occupancy period, builders charge occupancy costs or interim occupancy fees, which are monthly payments to your developer. If you’ve “permission to lease or rent clause” during occupancy that means you can now rent the unit to cover this fee and possibly generate positive cash flow. Hence it is becoming very important to have a provision to rent or lease the unit during occupancy.

Interim occupancy period can last anywhere from 3 -9 months, depending upon the project. During this period as am investor If you do not have permission to lease clause that means you’re paying monthly cost to builder until closing which will increase your total cost of ownership.

On the other hand, if you’ve permission to lease, you can rent out the unit to cover this interim occupancy fee and probably have a chance to have positive cash flow. Check my next blog to know how to calculate interim occupancy.

To know more speak to our expert Vinny Soni @ 647 680 0777

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