TRENDING: Brookfield Buys Shangri-La Vancouver From Westbank, Peterson

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

Budgeting

Budgeting in real estate refers to the process of forecasting and managing income and expenses associated with owning, operating, or developing a property.. more

Tenant Improvements

Tenant improvements refer to custom modifications or build-outs made to a leased space to suit the tenant’s operational needs, often negotiated as. more

Highest and Best Use

Highest and best use refers to the reasonably probable use of a property that results in the highest value, provided it is legally permissible,. more

Gross Lease

A gross lease is a commercial lease where the tenant pays a fixed rent, and the landlord covers most or all operating expenses such as property. more

Brownfield

A brownfield is a property that was previously used for industrial or commercial purposes and is now vacant or underused, often requiring. more

Record of Site Condition (RSC)

A Record of Site Condition (RSC) is a formal document filed with a provincial environmental authority certifying that a property meets required. more

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