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What is an Assignment Sale?

Simply put, it’s the sale - or “assignment” - of a contract to purchase a pre-construction condominium suite. It usually means that the building has not been completed yet and no one can take ownership, so only the contract can be sold, not the actual unit, as it hasn’t been constructed yet.

Once the building has been registered you can transfer the ownership title. Until then, it’s just the sale of a contract, but as you will see, there are many advantages to these kinds of sales, for both the buyer and seller.

What is an Assignment Sale?

Why do these kinds of sales happen?

Assignment clause

There can be many reasons someone may have to sell their rights to a unit before it’s been built. For example, someone may have bought a suite that’s three years away from being completed, but recently had to relocate for a job. This buyer may need to sell their agreement to afford a property in the city they now work in.

Another common reason is that a buyer began the purchase process when they were single but during the pre-construction process they married or are now expecting a child. Suddenly they’ve discovered that the pre-construction one-bedroom suite they bought is not big enough for a growing family.

When these kind of events happen, the “assignment clause” in the purchase agreement comes in handy, allowing the original buyer to pass the contract onto somebody else without accruing financial penalties.

These type of transactions are common and fully legal, but whether you are the buyer or the seller, it’s important to work with both an experienced realtor and lawyer who know how to protect your interests.

These deals are more complex than a conventional resale and involve three parties: the developer, the assignor and the assignee. It’s a two-stage process that involves both interim occupancy and the final closing.

We advise everybody who is thinking of buying or selling a pre-construction assignment to seek advice from a real estate agent, lawyer and tax accountant. The latter is important because assignors may have to pay a fair amount of tax on any profits they received from the completed sale.

Most builders allow assignment sales and you will often see these listings on However, there are some rules in the original purchase agreement that must be followed. They are also more complicated than a regular sale because a mortgage cannot be obtained on the closing of the transaction, only once the building has been registered. Other issues such as occupancy, reimbursement of the seller’s deposits and more must be taken into account.


In 2009, John Smith buys a pre-construction condominium suite with ABC Developments for $300,000 with a total down payment of 25%, equalling $75,000. The project is set to be completed in 2012.

  • Original Purchaser (Assignor) = John Smith
  • Vendor (Builder) = ABC Developments
  • Original Sale Price by Builder to John Smith = $300,000
  • Original Deposit Paid by John Smith to Builder = $75,000 (25%)
  • Funds required to Complete Sale in 2012 to Builder = $225,000

In 2011 John Smith sells his contract to Jane Doe for $350,000.

Assignment Agreement: $350,000
Original Purchaser (Assignor) = John Smith
New Purchaser (Assignee) = Jane Doe
Vendor (Builder) = ABC Developments
Assignment Purchase Price by John Smith to Jane Doe = $125,000, due Immediately, including a deposit of $75,000 + profit $50,000. The timeframe for this payment can also be negotiated.

In 2011 when the building is complete and ready for interim occupancy, Jane Doe moves into the unit during the “occupancy” period and starts paying occupancy fees to the developer. These fees take the place of mortgage payments and condo fees until the building can be registered.

In 2012 when the building is registered, the official title transfer takes place between the developer and the new purchaser. Jane Doe can finally register a mortgage and start paying mortgage payments and condo fees.

Funds required to complete sale by Jane Doe to builder = $225,000

Jane Doe now has all the rights to the property, just like any homeowner. Any future re-sale of the property will be a regular real estate transaction.

This is just a general overview but each arrangement is unique with its own rules, terms, and conditions.

Buying An Assignment?

These types of purchases can actually be some of the best deals in the GTA condo market. Generally, not as many people seek out these types of sales. Many real estate agents aren’t familiar with the structure of an assignment sale and often won’t bother to advertise these listings, and many lawyers aren’t familiar with the ins and outs of closing an assignment sale either.

With high demand in the resale market, potential buyers are often forced into bidding wars and end up overpaying for their suite. Buying a contract like this gives you the opportunity to avoid excessive competition and often means you pay much less than you would for the resale of an established unit.

The assignment condo market can be a win/win situation for both the buyer and the seller. The seller can list their unit without having to wait until the building is completed, while in many cases the buyers can save time and thousands of dollars.

Another advantage to buying an agreement like this is that you’re getting a brand-new unit that automatically comes with the seven-year Tarion Warranty Program and in many cases, you can move into the unit sooner, instead of waiting the usual 3 to 4 years for the building to be completed. Let’s recap some of the advantages for buyers:


When there’s a shortage of listings in the resale market this adds to your options

Less people are looking at these type of listings, meaning less competition

You get to avoid bidding wars and paying more than you can afford just to outbid another buyer

Assignment sales mean your contract includes the seven-year Tarion Warranty Program
Inheriting VIP Incentives – Most sellers bought their unit at the Platinum VIP Stage with incentives from the builder like credits, upgrades, capped development charges and much more

You may also benefit from saving on taxes like land transfer tax, GST and HST
Depending on how far along construction is, you may still be able to select your own finishes, colors and upgrades

You have the power to negotiate – sellers usually need to sell because they need to take out their equity and can’t wait until occupancy. This can give you leverage when negotiating on prices, deposit and closing dates

You get a brand new suite without having to wait 2 to 3 years for the building to be completed. Often occupancy is couple of months away

We love to chat about the assignment sale market, so don’t wait, give us a call and let’s find you a great deal.

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Selling an Assignment

Traditionally, owners who wanted to sell their pre-construction units had to wait months or years for the final closing date to officially put their suite up for sale. By this time, they could have already put significant funds into occupancy fees and closing costs.

Assignments sales are not a new strategy in Canada, but compared to other countries where condos have been around much longer, the process is not always well understood by sellers, buyers, agents, even lawyers and lenders. Sellers who have been taking the time to learn about them have been reaping the rewards by saving time and maximizing their profits.


The number of these type of transactions are growing rapidly. It’s sort of a form of condo flipping. Sellers can transfer their property rights during or before interim occupancy and avoid paying hefty carrying and closing costs, helping them getting their deposits back.

Most builders allow assignment sales, although they often have certain rules that must be followed. Even with strict rules in place, however, there are options available for you. Let’s take a look at the advantages for sellers:

It allows you to pull your equity out and potentially re-invest in another opportunity

You can avoid paying monthly carrying costs like interim occupancy fees that can sometimes last up to 2 years

You can also avoid closing costs. You don’t need to take out a mortgage and you don’t incur any additional closing costs like the land transfer tax or development charges

You can take advantage of the hot condo market, sell now before the suite is completed and re-invest in another project. Toronto’s economy is stronger than ever and will continue to attract more people

Assignments FAQ

What is an assignment sale?

Essentially the sale of a pre-construction unit. This means, instead of selling an already built unit, what’s being sold is the contract or right to acquire the property upon completion. The original purchaser (the "assignor") of a property sells their obligations under the original contract to a new purchaser (the "assignee").

The assignee will generally assume all of the assignor's duties and obligations, 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.

Can any kind of purchase agreement involving a real estate transaction be assigned?

Under normal circumstances, any purchase agreement can be assigned, providing the agreement doesn’t prohibit it.

Is an assignment legal?

It is legally permitted unless prohibited in writing in the original agreement of purchase and sale. In some cases, the developer may charge the assignor a fee for this kind of sale

Is it necessary to get permission from the developer to assign the contract?

That depends. You need to consult your purchase agreement to get the specifics. Generally, developers will not permit it without their consent, which means you’ll need to consult with them and a legal representative. There have been incidents where an unauthorized assignment sale has resulted in of the original agreement being terminated, and the deposit withheld!

Is there a standard legal form for these type of sales?

Yes, there are two: OREA Form 150 Assignment of Agreement of Purchase and Sale Condominium and OREA Form 145 Assignment of Agreement of Purchase and Sale (including applicable schedules.) In most cases, the developer will have their own form as well.

Will either the assignor’s or assignee’s lawyer’s services be adequate?

It is essential that the assignor and assignee each retain a lawyer with expertise in this area of real estate.

Can the Assignor’s REALTOR® market on the MLS?

Sometimes. Double check with your builder, as it depends on whether they permit advertising.

What happens if the construction, occupancy, closing, or unit transfer date is delayed?

In the event of a delay, the agreement is still valid. This means the assignee has agreed to take on the agreement and all responsibilities associated with it, including delayed construction or occupancy.

What if the Assignee doesn't close?

This is no different than any other property sale, meaning the assignor, in most cases, is not released from the obligations under their original purchase agreement. In this situation, both the assignor and assignee will be liable.

What is the cost of assigning an Agreement of Purchase and Sale?

If the developer consents to the arrangement, there will generally be an administration fee and legal fees. These fees will vary. Consult the original purchase agreement and the developer for specific information.

When does the Assignor get their money?

This generally depends on the closing date and the terms of the agreement that the assignor and assignee agreed on. Usually the assignor is paid when:

  • the assignee takes possession or,
  • when the developer approves the process, if applicable or,
  • when the assignee obtains legal title

Who gets the interest, if any, payable by the builder on the original deposits?

Unless otherwise specified, the interest is likely to be paid to the assignor.

Who pays the interim occupancy costs?

Once the assignment is finalized, the assignee will typically pay occupancy costs.

What closing fees are payable?

After the condominium is registered, the builder transfers the ownership title to the assignee. The assignee pays the balance to the builder and any amount still owed to the assignor. Some of the costs the assignor may pay include:

  • Estimated property taxes for up to 2 years
  • Hydro/water/gas meter installation and connection charges (approx. $500–$700 per meter)
  • Development charges/levies (potentially thousands of dollars)
  • Tarion New Home Warranty (ranging from $600–$1,900. See Tarion website for fee structure)
  • Discharge of builder’s mortgages (approx. $200–$300 per mortgage)
  • Builder’s lawyer’s Law Society charge (approx. $70)
  • Two months of occupancy fees for reserve fund
  • Other amounts set out in the Agreement of Purchase and Sale


These costs are typically not financed with a mortgage. The assignee is responsible for the following additional fees:

  • Legal fees and disbursements
  • Land transfer tax (provincial and municipal)
  • GST/HST rebate
  • Municipal levies

If you’re interested in either buying or selling an assignment, you need a realtor who is experienced in finding, negotiating and drawing up the offer for these types of sales. This means you’ve come to the right place! We have a wealth of expertise, knowledge and resources when it comes to assignment sales and we would be more than happy to discuss the idea with you.

For more information please call us today or simply fill out the form below and we will contact you as soon as we can.

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