Frequently Asked Questions
Most frequent questions and answers of condo assignment
What is a Condo Assignment?
Condo Assignment is a transaction for changing the right of Ownership of a Pre-Construction Condo Unit. The subject right of Ownership has been purchased from the Builder by the initial buyer. So literally this transaction would “Assign” the New Buyer as the Owner of the subject unit.
How to sell a Condo assignment unit?
If you are the lucky person who could successfully manage to purchase a pre-construction unit, you cannot just sell it any time after signing the contract with the Builder of the condo project.
There are restrictions applicable as per Builder’s criteria before they let you sell the unit.
Some Builder’s criteria could be:
- Typically the Sold Out Unit Ratio (Number of sold Units/ Total number of the Units) shall be around 50% -90% depends on the Builder and/or the project.
- Permission to assign by the Builder. Builders in nature would not like you to assign the unit to any other person. Some Builders would give you the permission at the time of signing the initial contract as a motivational selling material and they may mention a fee for it if assignment transaction happens later on. If you have not obtained that permission, we might be able to get it for you.
- Permission to advertise on the MLS system. Again, Builders do not like to see any units to be shown up on the MLS system. They would like to control the selling price of the remaining units in the building and possibly the other phases of the same complex.
How much is the Assignment Fee that the Builders ask for?
Assignment Fees vary depending on the Builders. The fee could be from $700 to $7000. Refer to your contract documents.
Can I assign my condo in “Interim Occupancy” period?
Yes, you can assign your pre-construction condo in Interim Occupancy period.
Interim Occupancy period is the time that the Builder asks you to occupy the unit and pay a specific amount of money each month (almost equal to the mortgage amount for 80% of the remaining selling price) until the closing day.
We are in Interim Occupancy period and there is a tenant in the unit. Can I still assign my condo?
Yes, you can. it is subject to the Builders consent. However, the original contract with the Builder shall be carefully studied and HST rebate shall be discussed with the lawyer before making the final decision.
What are the advantages in a Condo Assignment deal for Buyers?
The most significant advantages of buying an assignment condo are:
-The chance of purchasing a desirable unit in a building which is already sold out
-The chance of purchasing a unit at a better price compared to the properties on the current market
What are the important items /conditions in a condo assignment transaction?
There are some important items to consider in Condo Assignment deals:
Obtaining the Builder’s permission
The new Buyer shall accept all the terms and conditions of the original Contract with the Builder
If there is a change in incentives, promotions and/or free upgrade privileges which had originally been given to the initial Buyer
The chance of purchasing the Parking, Locker and similar features (if not included in the original contract) from the Builder
Is the price in a condo assignment deal negotiable?
The negotiation on the price might be possible. Keep in mind that the “Market” is determining the price.
Can I select the finishing of the unit in condo assignment deal?
It depends on the construction stage and the deadline for the finishing selection. Having said that, you can always change the finishes after the closing day, but you may lose the warranty on the related material and/or Appliances.
How is HST in condo assignment deal?
By law. HST is applicable on all brand new properties. For simplifying the transaction, the Builders prefer to include the HST in the purchase price. In case you do not move in the subject Unit, you may need to pay HST to the government. Consulting with a lawyer is recommended.
Is Tarion warranty transferable in a condo assignment transaction?
Yes, Tarion warranty is Transferable. Typically, as per Tarion regulations, your Unit has a warranty to cover the defects. Different components have a different time limit for warranty coverage. Refer to Warranty Coverage Outline.
What is the closing cost in a condo assignment deal?
The Closing Cost is a considerable amount of money to be paid by the Buyer not the Seller to finalize the transaction.
Typically, the closing cost in Assignment and a Pre-construction transaction includes the following (subject to change):
- Land Transfer Tax
- Title Insurance
- HST adjustments
- Property Tax adjustments
- Interim Occupancy payment adjustments
- Upgrade in unit payment adjustments
- Tarion fee
- Development & Education Fees
- Lawyer’s fee
Can I rent out my unit after I purchase a condo assignment unit from the Seller?
It depends on the Builder’s approval. However, consulting with a lawyer is recommended on this matter.
The builder does not allow me to sell a pre-construction unit before closing day, is there still a possibility to sell my unit?
Yes, there could be a way to get the permission. We can negotiate on behalf of you to get the green light from the Builder. They might ask for some compensation/administration/lawyer’s fees.
I would like to assign my condo. The Builder does not allow me to advertise on MLS. How am I supposed to find potential buyers then?
I am glad to say, AssignmentBuster.com is the place to help assignment sellers to advertise their property for free. It is the place for the potential buyers to find their desirable units. We do our best to professionally ease up the transaction and get paid when there is an actual deal in place. Read this helpline:
How To Sell The Condo Assignment Units FAST
Who is Assignor and who is Assignee in a condo assignment transaction?
In a Condo Assignment transaction, the Assignor is the one who has the right to “sell” the Agreement of Purchase and Sale and the Assignee is the one who is purchasing the Assignor’s interest in the Agreement of Purchase and Sale