What is an assignment?
When someone buys a condo that is not yet built (pre-construction), that buyer enters into a Purchase Agreement with the builder of the new condo development. Before final closing of the unit, the buyer may be able to 'assign' his or her rights to another person. In other words, the original buyer may choose to sell the contract (Purchase Agreement with builder) to another who will become the new buyer and stand in place of the original buyer on final closing.
In an assignment transaction, the original buyer is the "assignor" while the new buyer is the "assignee". Assignments can be beneficial for both assignors and assignees. While the condo is under development, the assignor's situation may change and for whatever reason, he or she may not be able to wait until final closing. If the condo is "assigned", the assignor no longer needs to pay final closing costs or obtain a mortgage. Depending on the circumstances, the assignee may benefit by paying less for the unit than if it were on the market after final closing (when the purchase price may be higher).
Before a condo can be assigned, the builder's written consent must be obtained and a fee is paid to the builder.
Some builders do not permit the advertising of assignments on the MLS therefore, your real estate agent must use other avenues to either advertise your condo on assignment or search for an assignment if you are a buyer.
It is important to remember that not all real estate agents and real estate lawyers are familiar with the assignment process, which is more complex than a traditional sale. It involves several steps as the builder's written approval is required, reimbursement of the assignor's deposits paid to the builder and other details that require extra care and attention.
I am trained and experienced in the condo assignment process for both assignors and assignees. If you are thinking of selling or buying on assignment, contact me today.
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Information is deemed reliable but is not guaranteed accurate by TREB.