- An Assignment means the Buyer is purchasing the ‘right’ to own a condominium that is not registered.
- The closing of the Assignment occurs BEFORE the condo is registered.
- The Purchaser who buys the unit through an Assignment, will register the ownership of the condo on the actual closing date.
- The 1st person (Assignee) who purchased the unit with the developer (Assignor), assigns their rights and liabilities to another person BEFORE the final closing date.
- We usually see the word Assignment in Pre- Construction Condos, in the Agreement of Purchase and Sale, whom the Seller wants to sell his/her condo before the final closing date, for reasons that may include, but not limited to:
- The Seller (Assignor) wants to avoid paying any of the closing costs, Land Transfer Tax or the last deposit or any of the down payment(s), as these costs will be paid by the New Purchaser (Assignee) on closing.
- Financial difficulties
- Usually most of the agreements in purchasing a pre- construction condo, will have a provision to allow a buyer to assign their ownership to some one else.
- The Developer may want to make sure that the Assignee can obtain financing prior to allowing the assignment.
- In some of the projects you may receive a `Special promotion` from the developer, either waiving or discounting any Assignment fee`s that there may be.
Now, there May be certain Restrictions with Assignments
- The Developer may not always have that provision, that will allow for an assignment (see this more often with low rise buildings).
- The Developer usually charge a fee for an assignment.
- Always have a lawyer review the clause of the Assignment, related documentation, and to explain it to you in detail!
Advantages for The Buyer (Assignee)
- You may be able to get Lower Price for a unit
- You may have the advantage of getting a more desirable unit and possibly a better selection of suites, because most `Assignments` are not allowed until most of the Developer inventory is sold
- A Mortgage is NOT registered until Final Closing (not during the occupancy period)