Condominium Assignments FAQ
An assignment is essentially a sale of a contract or right to acquire property. An assignment is a transaction whereby the original purchaser (the "Assignor") of a property sells, and thereby transfers, their interest and obligations under the original contract to a new purchaser (the "Assignee"). The Assignee will generally assume all of the Assignor's duties and obligations under the original Agreement of Purchase and Sale. These rights and obligations are stated in the original Agreement of Purchase and Sale and include terms such as interest payments, taxes and maintenance fees during interim occupancy. Upon completion, the Assignee is granted the title to the real property and will incur all final closing costs.
a) Assignor: An Assignor is the original buyer of the unit from the Builder/Developer.
b) Assignee: An Assignee is the buyer of the Agreement of Purchase and Sale from the Assignor.
Under normal circumstances, any Agreement of Purchase and Sale can be assigned providing that that agreement doesn’t prohibit assignments.
An assignment is legally permitted unless otherwise expressly prohibited in writing in the original Agreement of Purchase and Sale. An assignment fee may be charged by the developer and is normally a cost borne by the Assignor (the original purchaser).
You need to consult the Agreement of Purchase and Sale. Generally, Developers will not permit assignments without the Developer’s consent, therefore every situation requires consultation with the Developer and your lawyer. Please note, there have been incidents where an unauthorized assignment has resulted in termination of the original agreement and the withholding of the deposit.
It is essential that the Assignor and Assignee each retain a lawyer with expertise in this area of real estate.
In the event of a delay, the assignment is still valid: the Assignee has agreed to take on their agreement and all responsibilities involved in it.
This is no different than in any sale. The Assignor in most cases is not released from the obligations under the Agreement of Purchase and Sale. Accordingly, both the Assignor and Assignee will be liable.
If the Developer consents to an assignment, there will generally be an administration fee and legal fees. These fees will vary. Consult the original Agreement of Purchase and Sale and the Developer.
In an assignment, depending on the closing date and the terms of the assignment agreement that Assignor and Assignee agreed on, the Assignor is usually paid when:
a) the Assignee gets possession or occupancy or,
b) when the original seller approves the assignment, if applicable or,
c) when the Assignee obtains legal title.
Unless otherwise specified, the interest is likely to be paid to the Assignor.
Once assignment is finalized, the Assignee will typically pay occupancy costs through to the final closing and will pay the final closing costs unless specifically negotiated otherwise.
12. Does the Assignor have to claim Capital Gains for tax purposes?
Whether a resident or non-resident, the Assignor should discuss this question with a tax advisor.
For further information on assignments of Pre-Constructions Condos or to buy or sell any assignment, please feel free to call me and see my contact info as follows:
Gary Arora, Broker
Century21 SkyLark Real Estate Ltd., Brokerage
Office: 905.673.3100 XTN 417
Source : TREB-This information is provided for general information purposes only and is not to be relied upon or construed as legal, real estate, or other professional advice or opinion. Please seek professional advice on specific issues.