What is an Assignment Sale?

Assignment Sales Explained

You might have heard about Assignment Sales in regards to pre-construction condos in Toronto. 

Or, you might be thinking about buying an assignment property.

What is an Assignment Sale?

An assignment sale is when an intended buyer of a property (The Assignor) sells their purchase rights to a new buyer (The Assignee). They are actually selling their contract with the builder or property owner before they ever take possession. Therefore, they “assign” their future ownership rights to the new buyer.  

Pre-construction condos are not officially owned by the intended buyer until the building is built and registered, which can take years. Contracts with a builder often switch hands during that time for a variety of reasons. 

For example: The Assignor originally wanted to purchase a condo close to their workplace downtown, but in the time before they could officially take ownership they got offered a job in North York- and their intentions to buy that downtown condo changed as a result. 

Now, The Assignor wants to let the property go, regain their deposit, and hopefully make some sort of profit. 

The Assignee will usually agree to pay the original deposit (let’s say it was 15%) and may agree to pay an additional amount for the right to buy out The Assignor’s contract. That additional amount would be the Assignor’s profit.    

The Assignor will likely have to pay an assignment fee to the builder, which will be outlined in your original contract. 

Since Assignment Sales involve many steps in order to be done efficiently and legally, enlist a real estate agent to guide you in the process- whether you’re looking to assign your property or buy an assignment property in Toronto. They can help make sure it all goes smoothly.