Assignment Sales

Assignment sales offer both opportunities and challenges in the real estate market. Whether you are considering assigning your preconstruction contract or purchasing an assignment, understanding the legal, financial, and market implications is crucial. Consulting with our experienced real estate lawyers, can help you navigate this complex process and ensure a successful transaction.

What is an Assignment Sale?

In an assignment sale, the seller sells their interests in the agreement of purchase and sale of a preconstruction condo unit before its construction is completed. This is where the original buyer (assignor) transfers their rights and obligations under the Agreement of Purchase and Sale to a new buyer (assignee), before closing. A clause in the APS usually gives buyers the ability to sell the rights to their unit before the preconstruction unit is registered. During an assignment sale, the new buyer then steps into the original buyer's position and completes the deal directly with the builder.

Where property values are rising, and buyers seek to capitalize on their initial investments without waiting for construction to finish, assignment sales become an ideal route for many. In an assignment sale, you are given the opportunity to sell your preconstruction condo unit before builders complete it. Assignors buy in an early release, allow the property to appreciate, and then sell it before having to shell out transfer taxes and HST and getting locked into a mortgage. Once the assignor sells their property to the assignee, the assignee pays the assignor’s deposits back as well as any profit the assignor may have earned from the appreciation of the property.

Estimated Closing Costs for an Assignment Purchase

Listed below are the standard outlined builder charges in the agreement of purchase and sale:

Deposit due to builder on occupancy closing
Payment due to Assignor on final closing
Adjustments for prepaid items: common expenses, occupancy fees, and property taxes
Land transfer tax (if you are not a first-time home buyer)
HST credit if not owner occupied as primary residence, or an investment or builder is not willing to file on your behalf

Benefits for the Assignor

You receive your deposit and profit sooner
You may assign their property if you anticipate a market downturn in the future
You avoid paying closing costs and arranging a mortgage on a property that you have no interest in keeping

Benefits for the Assignee

An assignment purchase gives you access to exclusive deals in the market as fewer people seek out these types of sales.
You are less likely to get into a multiple-offer situation as you would in the resale market. By avoiding this situation, you avoid overpaying for a condo suite.
You are more likely to purchase a brand-new unit at a discount that is below market value.

Protect Your Future with Us

Assignment sales offer a unique investment strategy with significant potential rewards, but they also come with their own set of complexities. Whether you are looking to sell your assignment or purchase one, our law firm is dedicated to providing you with expert guidance and support throughout the assignment sale process. With our team of experienced lawyers by your side, you can navigate the assignment sale market with confidence.