October 21, 2019  
Nadlan realty | Assignment of a contract of Purchase & Sale agreement | www.nadlan.ca

Assignment of a contract for a new condo or townhome sold in Toronto, Vaughan or other city in Ontario to a new buyer before final closing by the original buyer. 

 Toronto Townhouse Toronto real estate

Toronto and Vaughan Condo Assignments & Assignment Sale: Explained

Looking for a condo but don't know what "assignments" are? The truth is, you are not the only one.

Still, in order to understand the meaning of condo assignments, you have to know a couple of things. For example:

  • whenever a condo is bought during the pre-construction phase, a pre-construction purchase contract needs to be signed between the buyer and the builder
  • whenever a new condo is built and is ready to be moved into, there is a period known as interim occupancy' during which the buyer cannot move in yet. In order to move in, the buyer needs to pay the builder an amount equal to what their mortgage payments, condo fees, and taxes will altogether equal.
  • the condominium can be only registered once it passes all city inspections and gone through all the processes of becoming a legal entity
  • sometimes, either life circumstances or change of plans happen. In periods like these, buyers of pre-construction condos are able to sell their condo to other buyers with an assignment. And that is what condo assignments basically represent. 

So, Why Are Condo Assignments A Good Idea?

Basically, condo assignments help both buyers and sellers in selling or purchasing a property. And although the property in this case still undergoes the phase of pre-construction, what condo assignments actually sell is the promise to purchase a property.

Therefore, whenever a buyer decides to purchase an assignment, they step into the shoes of the original purchaser and are transferred all the rights the original purchaser once had. The price of terms of the contract cannot be renegotiated - only transferred over the contract as it already exists.

However, it is important to note that sometimes builders don't allow their original purchasers to assign contracts, which is why you have to double-check the terms before agreeing on a condo assignment. In the very end, builder approval to assign a contract is almost always necessary.

 

The Pros And Cons Of Condo Assignments

The greatest thing about condo assignments is their flexibility, especially if you know the purchaser or clearly understand the terms of the purchase. Still, there are many risks you need to consider of buying a pre-construction condo - and some of them include time delays, changes to the unit or building as well as extended interim occupancy. Another disadvantage is that you may not be able to get involved in the process of selecting finishes and upgrades for the building, depending on the stage of construction.

When it comes to payments, condo assignments mirror the deposit that the original purchaser has paid to date. This means that you may be required to provide 15% to 20% as a deposit rather than providing the usual 5% for a resale condo.

In the end, it is always a good idea to consider all the risks, legal requirements and paperwork that go into each condo assignments. And if you have problems doing that, you can always reach us for immediate help and assistance!

Location: Toronto, North York Toronto, Thornhill city center, Vaughan, Thornhill Woods Vaughan, Maple Vaughan

 
Posted by: Michael Tepper- real estate broker
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