Over the course of his 20-year career, Jim Emanoilidis has helped to revolutionize the way condominiums are financed more than once. With more than $7.5 billion in facilities outstanding, he successfully built and grew Westmount Guarantee to become the largest provider of Tarion bonds, condominium deposit insurance, and unique surety solutions. Now, Jim is bringing his expertise to solve interim occupancy interest in Ontario’s new condominium sector through OneClose Inc. – a co-created venture with R-LABS Canada. Together, we’re changing the way new condos are financed by closing the gap between developers, purchasers, and lenders.
Today’s new condo market has become a lot more onerous on purchasers. Over the past decade, the occupancy periods in Ontario keep getting longer and purchasers are responsible for more and more interim occupancy interest payments. With 20 years of experience in this space, I saw this problem cropping up across all of my projects and wanted to understand why this was the case. The rest of the world didn’t seem to encounter this issue of interim occupancy payments. It was unique to Ontario.
In Ontario, condominium registration regularly occurs after occupancy permits are granted, unlike in comparable cities like Vancouver where registration occurs before purchasers begin to move into their units. Here, units are not created in the registry system until the condominium is registered and purchasers are unable to grant mortgage lenders a mortgage on their unit at the time of occupancy. As a result, purchasers are required to pay interest on the balance owed to the developer until title to the unit is ultimately transferred to the purchaser – a process which can take many months and feel a lot like paying rent. It just seemed that there had to be a better way for developers to take the financial risk out of their projects as well as allow purchasers to move into their units without the extra costs. To solve this issue, we created the OneClose platform.
The OneClose platform enables lenders to advance their loan at the time of interim occupancy as opposed to waiting until the condominiums registered. As an incentive for prospective buyers, it starts with a developer enrolling their project in the OneClose platform. Using our secure online portal, their purchasers can then apply for a mortgage before the unit is registered with one of our certified lenders – allowing them to start repaying their loan as if they had bought a resale condo, a freehold home, or any another product.
From the developer’s point of view, the purchasers who have moved into their building have paid them off completely, and there’s no risk of the purchaser being unable to secure financing after they’ve already moved in. It also allows developers to pay off their more expensive construction financing which generally has a higher interest rate than what they’re able to charge in interim occupancy fees. And for our OneClose mortgage lenders, it allows them to advance that mortgage to the purchaser the second they move in.
It’s a game changer in our business as we’re moving away from what we’ve accepted as normal – having a five-year mortgage commitment lined up from a lender but being unable to start paying that for a number of months. We’d like to get rid of those payments for purchasers so they can start paying off their mortgage right on month one, just like they would be if they bought a condominium in Vancouver. We’re making drastic improvements to the way that developers, purchasers and lenders interact and in five years, we expect to see OneClose as the gold standard of service in the new condominium market.
