Condominium Assignments Frequently Asked Questions
Condominium Assignments FAQ
1. What is an assignment?
An assignment is essentially a sale of a contract or right to acquire property. An assignment is a transaction whereby the original purchaser (the “Assignor”) of a property sells, and thereby transfers, their interest and obligations under the original contract to a new purchaser (the “Assignee”). The Assignee will generally assume all of the Assignor’s duties and obligations under the original Agreement of Purchase and Sale. These rights and obligations are stated in the original Agreement of Purchase and Sale and include terms such as interest payments, taxes and maintenance fees during interim occupancy. Upon completion, the Assignee is granted the title to the real property and will incur all final closing costs.
a) Assignor: An Assignor is the original buyer of the unit from the Builder/Developer.
b) Assignee: An Assignee is the buyer of the Agreement of Purchase and Sale from the Assignor.
2. Can an Agreement of Purchase and Sale, involving any type of real estate transaction, be assigned?
Under normal circumstances, any Agreement of Purchase and Sale can be assigned providing that agreement doesnâ€™t prohibit assignments.
3. Is there a course that a REALTOR® can take to learn about assignments?
Yes. The Toronto Real Estate Board will begin to hold seminars on assignments. Contact the Education Department at TREB or click the Education banner link on the TorontoMLS home page, then select Education Seminars.
4. Is an assignment legal?
An assignment is legally permitted unless otherwise expressly prohibited in writing in the original Agreement of Purchase and Sale. An assignment fee may be charged by the developer and is normally a cost borne by the Assignor (the original purchaser).
5. Is it necessary to get permission from the Seller/Developer to assign the Agreement of Purchase and Sale?
You need to consult the Agreement of Purchase and Sale. Generally, Developers will not permit assignments without the Developerâ€™s consent, therefore every situation requires consultation with the Developer and your lawyer. Please note, there have been incidents where an unauthorized assignment has resulted in termination of the original agreement and the withholding of the deposit.
6. Is there a form for assignments?
Yes, there are two: OREA Form 150 Assignment of Agreement of Purchase and Sale Condominium and OREA Form 145 Assignment of Agreement of Purchase and Sale (including applicable schedules.) In most cases, the Developer will have its own form as well.
7. Will the Assignor’s or Assignee’s lawyer’s services be adequate?
It is essential that the Assignor and Assignee each retain a lawyer with expertise in this area of real estate.
8. Can the Assignor’s REALTOR® market on the MLS?
It all depends on whether the developer permits advertising of the assignment. Refer to the original Agreement of Purchase and Sale to see if there are any prohibitions against listing the assignment or consult the Developer (Most Agreements of Purchase and Sale contain such a prohibition).
9. What if the construction, occupancy, closing, or unit transfer date is delayed?
In the event of a delay, the assignment is still valid: the Assignee has agreed to take on their agreement and all responsibilities involved in it.
10. What if the Assignee doesn’t close?
This is no different than in any sale. The Assignor in most cases is not released from the obligations under the Agreement of Purchase and Sale. Accordingly, both the Assignor and Assignee will be liable.