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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 does not prohibit assignments.
3. 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 y the developer and is normally a cost borne by the Assignor (the original purchaser)
4. Is it neccessary 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 Developer'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.
5. Do I need a lawyer?
It is essential that the Assignor and Assignee each retain a lawyer with expertise in this area of real estate.
6. What if the consturction, 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.
7. 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.
8. What is the cost of assigning an Agreement of Purchase and Sale?
If the Developer consents to an assignment, there will generally be an administration fee and legal fees. These fees will vary. Consult the original Agreement of Purchase and Sale and the Developer.
9. When are payment done to the Assignor?
In an assignment, depending on the closing date and the terms of the assignment agreement that Assignor and Assignee agreed on, the Assignor is usually paid when:
a) the Assignee gets possession or occupancy or,
b) when the original seller approves the assignment, if applicable or,
c) when the Assignee obtains legal title
10. What closing fees are payable?
See the Condominium Assignment Basic Guidelines, found on the last page of this document.
11. Who pays the interim occupancy Costs?
Once assignment is finalized, the Assignee will typically pay occupancy costs through to the final closing and will pay the final closing costs unless specifically negotiated otherwise.