BUYING A CONDO BY WAY OF ASSIGNMENT
Most people who buy a condo take ownership through the Land Registry System. Just before the day of closing, you transfer money to your lawyer and if you need additional funds via a mortgage, your lawyer will register your ownership of the property and the interest of the mortgage lender.
An Assignment means that you are buying a ‘right’ to own a condo that is not in the Land Registry System. Usually the condo has not been built or it is not ready for occupancy and the building has not been registered. This ‘right’ is just a paper transaction and not the transfer of the actual property. The closing of the Assignment occurs BEFORE the condo is registered. The individual who buys the ‘right’ will eventually close and register their ownership of the condo at some later date.
The number of Toronto Condo Assignment transactions is growing rapidly. For sellers who bought a new condo from plans several years earlier and whose plans have changed, this is an opportunity to sell before they have to get a mortgage and incur additional closing costs such as that dreaded, double Land Transfer Tax. For buyers who want a brand new condo without having to wait years for construction to finish, or who can not find what they want in the resale market, it represents a lot more choice.
Most Assignments are sold on an ‘Exclusive’ basis. They are also more complicated than a regular sale because a mortgage can not be obtained on the closing of the Assignment, and will need to be postponed until the day of registration. Other issues such as Occupancy, reimbursement of the seller’s deposits and more must be taken into account.
You need a Realtor that is trained in finding and drawing up the Offer for Assignments. At RE/MAX Condos Plus we have biggest Company site for selling Assignments and we have the most Realtors who are trained in doing these transactions. So if you want to buy or sell an Assignment then you have come to the right web site! We also have the best trained Realtors with the most expertise in Assignments!
Example of a Property Assignment
To simplify, an example of an Assignment transaction is provided below:
Mary (the "Assignor") entered into an agreement to purchase an apartment for $200,000 from the Developer (the "Vendor") as a 'Pre-Sale'.
As part of the Agreement For Sale, she paid a total deposit of 25% = $50,000.
Six months later and prior to Completion of the apartment, Mary decides to sell, and thereby transfer, her contractual rights and obligations to purchase the apartment for $28,000.
Fred (the "Assignee") missed his chance to purchase an apartment when the Developer was 'pre-selling'. The building is now sold out. He wants to purchase Mary's rights and obligations for her asking price of $28,000.
Fred pays to Mary $28,000 PLUS replacement of her deposit of $50,000 which equals a total of $78,000.
When the building is Complete, Fred owes the "Vendor" (the Developer) the balance of the Agreement For Sale which is $150,000 (being the original price less the original deposit).
If you are looking to sell or purchase an assignment please fill the form below to get started or call 416-918-7620 today.