The process of acquiring the builder’s consent for an assignment begins once the assignee verifies the assignor’s right to assign. In cases where the original agreement of purchase and sale forbids assignment and the builder refuses to allow it, the original buyer must wait until the title is transferred to them to sell their property. However, in many instances, builders may waive the clause preventing assignment from the agreement once their specific criteria, forms, and fees are met. Both the builder’s lawyer and the sales office typically have information regarding the builder’s requirements for consenting to an assignment sale.

After taking over the assignment agreement, the new buyer pays the builder the adjustments at the closing. The timing of this closing is contingent on the property’s construction status. If the property is a pre-construction condo, the buyer can occupy the unit once the occupancy closing takes place and is responsible for the occupancy fees thereafter. Upon final closing, the new buyer must arrange for a mortgage if necessary. Furthermore, the original buyer’s deposits to the builder are taken over by the new buyer and reimbursed once the builder consents to the assignment or at the time of title transfer.

Purchasing a property through assignment has its own set of benefits and drawbacks. The pros include the opportunity to purchase a property in a sold-out project and potential equity growth. However, the cons include uncertainties in final adjustments and closing costs, the obligation to fulfil the previous owner’s responsibilities, and the wait for the property’s completion.

If you’re purchasing from a builder/developer, it’s crucial to refer to the original agreement of purchase and sale to ascertain when the builder will consent to assign. Some builders will only give consent to assign after certain criteria are met, such as the sale of 90% of the units in the building. Therefore, reviewing the original agreement is important to understand your rights.

Generally, most builders explicitly state in the agreement of purchase and sale that you cannot list the property for sale or lease on MLS. While you can request consent from the builder to list on MLS, you also run the risk of facing heavy penalties or potential termination of your agreement, with the loss of your deposit, if you list without consent.

The purchase price on the Agreement of Purchase and Sale with the builder typically includes HST and an HST New Housing Rebate. However, in some instances, the builder might not credit the HST New Housing Rebate on closing due to an Assignment, regardless of the Assignee’s/Purchaser’s eligibility. In such a case, you would need to pay the rebate to the builder as an adjustment on final closing and apply to the CRA for the HST New Housing Rebate yourself after final closing.

If you’re purchasing on Assignment for investment purposes, you must obtain an HST Rental Rebate. This entails entering into a lease with a tenant for a minimum of one year and applying for the HST Rental Rebate within two years of your final closing.

If the assignor used the property for rental purposes after taking possession on occupancy, it could affect your eligibility for the HST New Housing Rebate. It’s crucial to confirm that the assignor has not rented out the property to maintain your eligibility.

If the assignee fails to fulfill their obligations, the assignor (the original seller) remains liable to complete the transaction. This underscores the importance of the assignee providing proof of their ability to complete the transaction when taking over the agreement.