An Assignment of an Agreement of Purchase and Sale takes place when the original purchaser who bought from the builder assigns or sells the contract that was signed with the builder.
The builder Agreements usually prohibit the purchaser to assign the Agreement. However, in the current Toronto condo market, there is more need for Assignments, as some investors want to sell, make a profit and move on. So, builders are agreeing to permit Assignments. The builders charge a fee between $2500-$5000 to give this consent.
It is recommended that an Assignment Agreement contain two important clauses:
1. the Assignment Agreement should have a clause with a condition requiring a review by the lawyer for the Assignee and also the Assignor.
2. the Assignment Agreement should be conditional on the builder granting permission for the Assignment.
A well drafted Assignment Agreement can work out well for both the Assignor and Assignee. By assigning the Agreement with the builder prior to closing, the Assignor can avoid paying the builder's closing costs as well as Land Transfer Tax. The Assignee can purchase a property that can be viewed ie. view the actual property rather than buying from the builder's plans.