Managing your rental
Renting out a new pre-construction condo in Ontario: interim occupancy, what your purchase agreement allows, Tarion warranty forms and the HST rental rebate.
By the Tenant.ca teamUpdated 6 min read
Tarion explains that when a municipality grants interim occupancy, a buyer can occupy a new condominium unit before title is transferred, while other parts of the building are still being finished. Final closing, when you receive title, comes only once construction is complete and the condominium is registered. Tarion says the interim period can last from a few weeks to a year or more.
During that period you pay the builder a monthly interim occupancy fee whether or not you move in. Tarion says it follows the Condominium Act's guidelines and covers interest on the unpaid balance of the purchase price, the estimated municipal taxes and the projected common expenses, and that it is not credited to the purchase price. If you plan to rent, that fee is the carrying cost a tenant's rent is measured against until closing.
Tarion's guidance describes the occupancy fee, not leasing: whether you may rent the unit out before final closing is set by your agreement of purchase and sale with the builder. Read its occupancy and leasing terms with your real estate lawyer before you advertise, and if the agreement needs the builder's consent, get it in writing.
Once the condominium is registered, section 119 of the Condominium Act requires owners and occupiers, tenants included, to comply with the Act, the declaration, the by-laws and the rules. Check the declaration's leasing provisions and the rules on move-ins, elevators and parking before you sign a lease.
Occupancy dates move. Tarion's warranty includes delayed closing and occupancy coverage, claimed within one year of taking possession, which compensates a buyer when the builder does not give enough notice of a delay or completion slips past a set date. A lease signed for the scheduled date can leave a tenant with nowhere to go if that date slips.
Sign a lease once the builder has confirmed a firm occupancy date, and leave time between getting the keys and the tenant's move-in for the unfinished items from your pre-delivery inspection and a check of the appliances and finishes. The province requires its standard form of lease for most residential tenancies, a new condo unit included.
Section 83 of the Condominium Act requires an owner who leases a unit, or renews a lease, to notify the corporation within 10 days, give it the tenant's name, the owner's address and a copy or summary of the lease, and give the tenant a copy of the declaration, by-laws and rules. In a new building, ask the management office for its move-in procedure before the tenant books movers.
Section 6.1 of the Residential Tenancies Act exempts units occupied for the first time for residential purposes after November 15, 2018, from the rent increase guideline, and the province's page lists new buildings among them. A new condo rented for the first time is in that group. The 90-day written notice (section 116) and the 12-month rule (section 119) still apply to every increase.
Tarion says the warranty on a condominium unit starts when interim occupancy begins, not when anyone moves in and not when title transfers. Its timelines for the first year are an Initial Form submitted automatically on day 41 after possession, a Mid-Year Form on day 183 and a Year-End Form on day 365, the last chance to report items under the one-year warranty. Second-year items go on a Second-Year Form, and a major structural defect can be reported up to seven years from possession.
With a tenant in the unit, ask them to tell you about defects as they find them, so the forms reach Tarion through your MyHome account on time. When the builder's trades need to come in, section 27 of the Residential Tenancies Act requires written notice at least 24 hours ahead, giving the reason and a time between 8 a.m. and 8 p.m.
The new housing rebate most buyers know is for a home the buyer or a relative will live in. For a unit you rent out, the Canada Revenue Agency's guide RC4231 describes the GST/HST New Residential Rental Property Rebate: the unit's first use must be as an individual's primary place of residence, under one or more leases, for at least one year. A buyer claims it on Form GST524, with the Ontario schedule RC7524-ON, generally within two years after the end of the month in which tax first became payable on the purchase.
The Canada Revenue Agency says the federal part is reduced for a unit with a fair market value between $350,000 and $450,000 and is not available at $450,000 or more, while the Ontario part may be available regardless of value, up to a maximum. An individual who is eligible for the new housing rebate cannot also receive this one, whether that rebate is paid to them or credited by the builder. If your agreement credits you with the new housing rebate on closing, ask your lawyer how the HST adjustment works when you will rent the unit.
Tenant.ca finds the first tenant for one month's rent plus HST, charged once: we price the rent, advertise the unit, run the showings, screen applicants and prepare the standard lease, and you choose the tenant. We can then manage the tenancy for $98 per month plus HST, with an owner portal that shows every rent payment and repair, and the first 60 days of the agreement are a trial period.
This page is general information, not legal, tax or financial advice. It reflects Tarion's, the province's and the Canada Revenue Agency's pages as checked on October 22, 2026. Your agreement of purchase and sale governs your unit, and your lawyer and accountant can apply these rules to it.
