TRENDING: Are Rennie's Layoffs The Canary In The Presale Coal Mine?

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

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

Related Terms

Bridge Financing

Bridge financing is a short-term loan that helps homebuyers cover the financial gap between buying a new property and selling their existing one.. more

Bridge Loan

A bridge loan is a short-term financing option that allows homeowners to borrow against the equity in their current property to fund the purchase of. more

Firm Offer

A firm offer is a legally binding agreement to purchase a property that contains no conditions. Once accepted, it commits both the buyer and the. more

Foreclosure

Foreclosure is a legal process through which a lender takes ownership of a property when the borrower defaults on their mortgage payments.. more

Closing Costs

Closing costs are the various fees and expenses that buyers and sellers must pay to finalize a real estate transaction, separate from the property’s. more

Deposit

A deposit is an upfront payment made by a homebuyer to show their good faith and commitment when submitting an offer on a property. It forms part of. more

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