Here Are Some Quick Assignment Facts:
- An Assignment means the Buyer is purchasing the ‘right’ to own a Condominium or house that is not registered.
- The closing of the Assignment occurs BEFORE the condo or house is registered.
- The Purchaser who buys the unit through an Assignment, will register the ownership of the condo on the actual closing date.
- The first person (Assignee) who purchase the unit with the developer(Assignor) assigns their rights and liabilities to another person before the final closing date.
- We usually see the word Assignment in a lot of pre-construction condos, in the agreement of purchase and sale, whom the Seller wants to sell his/her condo before the final closing date, some reasons may be:
- The Seller (Assignor) wants to avoid paying any of the closing costs, land transfer tax or the last deposit or any of the down payment, as these costs will be paid by the new purchaser (Assignee) on closing.
- Financial difficulties.
- Usually most of the agreements in purchasing pre-construction Condos, will have a provision to allow the Buyer to assign their ownership to some one else.
- The Developer may want to make sure that the Assignee can obtain financing prior allowing for the assignment.
- In some of the projects you may receive a `Special promotion` from the Developer for a free assignment.
|Now, there May be certain Restrictions with Assignments!|
- The Developer may not always have that provision, that will allow for the assignment! (Usually we see this more often with low rise buildings!)
- The Developer usually charges a fee for an assignment!
- Lastly and Always important is to get a lawyer to review the clause of the Assignment, and related documentation and to explain it to you in detail. This way their is no confusion!
Advantages for The Buyer (Assignee):
You may be able to get Lower Price for a unit.
You may have the advantage of getting a more desirable unit and possibly a better selection of suites, because most `Assignments` are not allowed until most of the Developer inventory is sold!
A Mortgage is NOT registered until Final Closing (Not during the occupancy period)!
Advantages for The Seller (Assignor):
Ontario Land Transfer Tax & Toronto Land Transfer Tax is avoided.
A mortgage is never started – Only the deposit is used!
Interim Occupancy fee/Rent is avoided.
Development fees are avoided.