Assignment Sale

Explore how assignment sales work in Canadian real estate, especially in pre-construction deals, and what buyers and sellers should watch for.

Assignment Sale
Escrow – Definition, Meaning, and Examples in Canadian Real Estate

May 22, 2025


What is an Assignment Sale?

An assignment sale occurs when the original buyer of a property (the assignor) sells their rights in the purchase agreement to a new buyer (the assignee) before the deal closes.

Why Assignment Sales Matter in Real Estate

Assignment sales are common in Canadian pre-construction real estate, especially in hot urban condo markets. The assignor sells the contract – not the property itself – before the original closing date.

Reasons for assignment sales include:

  • The assignor can no longer complete the purchase
  • The property's value has appreciated
  • The buyer is seeking a profit before possession

Assignment sales require developer consent and often involve assignment fees, legal reviews, and specific contract clauses.

Risks and considerations include:

  • Tax implications (capital gains or HST)
  • The new buyer assumes all obligations
  • Lender approval must be re-obtained

Understanding assignment sales empowers buyers and sellers to navigate pre-construction contracts and take advantage of changing circumstances.

Example of Assignment Sale

An investor assigns their agreement for a pre-construction condo in Toronto, selling the contract to a new buyer for $50,000 more than they originally paid.

Key Takeaways

  • Transfers a purchase agreement to another buyer.
  • Common in pre-construction transactions.
  • Requires builder approval and legal review.
  • Can involve tax and financing implications.
  • Must be documented clearly in writing.

Related Terms

Additional Terms

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Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

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