Great points Mark, but the fact of the matter is that people are going to be living in a suite that they do not yet own, and as such should pay for that privilege.
The Ontario's Condominium Act clearly defines the interim occupancy, and says that a developer/builder can pass on the costs to the buyers that they bear between the time a buyer moves in and when the project is registered and handed over to the newly organized condominium corporation.
The issue, as you are aware is that purchase deals cannot officially close until a project is registered, but you take interim occupancy earlier than that. Until the units close, ownership lies with the developer.
During this time the developer/builder still makes payments on the loan that financed construction, pays municipal property taxes, and covers the upkeep costs for common areas such as the pool and landscaped grounds.
It consists of:
- Estimated property taxes
- Share of common elements
- interest on the unpaid balance of the purchase price.
So... That is why you have to pay the interim occupancy, or the "Phantom Rent".
For people who claim they did not know about the "interim occupancy", then they should have a word with their lawyer who reviewed all of their condo documents and should have informed them of it.
The main time that I feel this gets a bit weird is when you are paying the interim occupancy, but the common areas are yet to be completed.