Insurance partnership helps condo buyers bridge builder fees

Aviva Canada said it’s invested in OneClose Inc., a technology company that provides a financial solution to help owners of newly built condos save on what are called ‘interim occupancy fees.’

“Consumers who buy a newly built condo in Ontario face a period of time after they move into their unit when they cannot obtain a mortgage,” Aviva Canada said in a press release.

During this interim occupancy period, condo purchasers are required to pay interim occupancy fees to the builder. These fees include the interest on the remaining balance of the condo unit, property taxes and maintenance fees.

In Ontario, the fees most often apply to pre-construction condo buyers whose units are completed prior to the entire building opening, according to one lawyer who spoke with CU. They’re not able to move to a mortgage prior to the building’s completion and such payments are often referred to as ‘phantom mortgages’ or ‘phantom rents,’ he added.

Aviva’s press release noted these interest payments “can add up quickly to thousands of wasted dollars since they do not count towards the consumer’s mortgage – it’s like paying rent for a condo you own.”

The OneClose offering lets consumers obtain mortgage financing between the occupancy date provided by the builder and the date the condominium registers. This can save buyers money and unlock ownership rights to let them start building equity.

“During these uncertain times with high inflation and interest rates, consumers have enough on their plates,” said Andy Armstrong, head of developer surety and home warranty at Aviva Canada.

“Through our surety solutions we want to provide protection to builder projects and help customers overcome the interim occupancy pain point in the market for greater peace of mind.”

OneClose Inc. CEO Kevin Murphy called Aviva Canada, “a valued partner throughout the design and implementation of the OneClose solution.”

Feature image by iStock.com/onurdongel