Chad writes a column for the local Toronto Metro newspaper called Condo Q & A. The articles previously printed in the Metro News are reprinted below. Read on for great advice and tips on condos, lofts, and townhomes in Toronto!

Q:

What does the term “Phantom Mortgage” mean? — Trish B., Toronto

A:

Quite often a condominium complex may have been physically completed and is ready for occupancy before the Condominium Corporation itself is created. A condominium is created when it is registered. There are many conditions and procedures that the developer of the complex must complete before being allowed to register the Condominium Corporation. The condominium act allows the developer to require a purchaser occupy a unit before the corporation is registered. This is called “Interim Occupancy” and is where the Phantom Mortgage begins. For this period, you will pay an amount similar to your condo fees, taxes and an equivalent mortgage amount based on an interest rate as agreed upon in the purchase agreement.Here is the tricky part. Most new development contracts have a rather large window as to when they will register the condominium. During this, you are essentially paying rent to the developer, and you’re not paying any principal or interest on your own mortgage, although, you do have the benefit of living in your own place. It is always a good idea to team up with a Realtor and lawyer to help with your negotiations.