Assignment Sale
Explore how assignment sales work in Canadian real estate, especially in pre-construction deals, and what buyers and sellers should watch for.
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
Average and median describe different aspects of the same month’s transactions. Both are affected by the mix of homes sold.
Category averages compare different homes and locations; the gaps are not estimates of the cost to upgrade an otherwise identical property.
The five categories shown account for 5,000 of the board’s 5,057 sales. The remaining 57 transactions were in other housing categories.
Monthly observations are not seasonally adjusted. Active listings count properties available at month-end; they are not construction inventory.
Average and median prices share one dollar axis. These unadjusted transaction measures do not control for changes in the homes sold.
TRREB’s 416/905 categories compare the apartments sold in each area. The difference does not isolate a location premium for equivalent units.
Highlights from the Delta Golf & Country Club listing brochure. (Colliers)
5680 Oak Street in Vancouver and its surrounding context. (MCMP Architects)
Ground-level renderings of the tower proposed for 5680 Oak Street in Vancouver. (MCMP Architects)
