Assignment Sale

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.

• 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.

• 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

• Assignment Clause
• Pre-Construction Condo Purchase
• Purchase Agreement
• Deposit
• Closing Date