Selling Your New Construction Condo via Assignment
- Assignment Sales are Tricky and Complicated and Not for the faint of heart.
Luckily we have experience in this field and can guide you through the process
- The Jist of an Assignment Sale is this: You are Selling or Buying a New Construction Condo before the Building is Registered (in some cases before it is even built) and while the ownership of the unit is still with the Builder – referred to as the Interim Occupancy period. No one receives title to the unit in an Assignment Sale – you are Selling/Buying Paper i.e. someone’s original Agreement of Purchase and Sale with the builder + any profit earned.
- Assignment Sales have Three Parties to the transaction and Three Lawyers so are vastly more complex. There is the Seller(the Builder) the Assignor (Original Buyer of the Unit) and the Assignee (New Purchaser of the Unit from the Assignor) + Lawyers for all parties – see how it can get complicated?
- The original Purchaser (Assignor) is selling their rights and obligations in their contract with the Builder (Seller) and the Assignee assumes these rights and obligations as stipulated in the original contract and pertain to matters such as mortgage, taxes and maintenance fee amounts to be paid during the interim occupancy period (before building registration). There is no option to go back and re-negotiate the original Purchase Agreement – it is what it is and the Lawyer for the Assignee will need to give it a thorough review. The Assignee on final closing receives title to the unit and also will incur the closing costs as outlined in the original agreement
- There are advantages/disadvantages to Buying or Selling through this process and we will advise you of these prior to making any Offer to Purchase or Sell through Assignment. Typical advantages to The Assignee are buying below market value, land transfer tax savings (depending on when the original contract was written), in some cases you can still pick your colours and finishes, there may be credits on closing with the builder such as free maintenance fees, cash back incentives etc. For the Assignor advantages are saving on occupancy fees, closing costs, land transfer taxes and property taxes.