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

Construction Loan

A construction loan is a short-term, interim financing option used to fund the building or major renovation of a property, with funds disbursed in. more

Certificate of Occupancy

A certificate of occupancy is an official document issued by a municipal authority confirming that a building complies with applicable codes and is. more

Bylaw Variance

A bylaw variance is official permission granted by a municipal authority allowing a property owner to deviate from local zoning or building bylaw. more

Absorption Rate

Absorption rate is a metric that measures the rate at which available properties are sold or leased in a specific market over a given period.. more

Corporate Restructuring

Corporate restructuring refers to the reorganization of a company’s operations, assets, or liabilities, often under court supervision, to improve. more

Consumer Proposal

A consumer proposal is a formal, legally binding agreement in Canada between an individual and their creditors to repay a portion of their debt over. more

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