Frequently Asked Questions
What is an Assignment?
An Assignment is a sales transaction that occurs prior to completion, where the original buyer of a property (the “Assignor”) allows another buyer (the “Assignee”) to take over the original buyer’s rights and obligations of the Contract of Purchase and Sale. The Assignee will be the one who ultimately completes on the home.
What do these roles mean, Assignor VS Assignee?
Assignor – The current owner(s)/purchasers of the home
Assignees – The purchaser(s) who are buying the home from the Assignor(s)
I paid for the deposit already, how will I get that back?
When an Assignment sales transaction is agreed upon, the Assignee will be responsible to pay the entire deposit amount back to the Assignor. The Assignee will pay their representing lawyer/notary the entire deposit amount, so that their lawyer/notary can pay that deposit amount to the Assignors’ representing lawyer/notary.
I have already assigned the home, will I still be liable in any way?
Yes – If the Assignee(s) for any reason does not or cannot complete on the home, you as the Assignor will then need to complete on the home.
Can you give me an example scenario of an Assignment?
Joe purchases a pre-sale condo unit at the Pinnacle complex on May 1, 2015
Purchase price is $500,000
Deposit paid is $100,000
The condo is scheduled to be built and ready for occupancy in 2019. A year later the condo has gone up in value, and
- Joe decides to sell and is sold at $650,000 to Janet
- They sign an assignment contract on June 15, 2016
Joe is now the ASSIGNOR and Janet is now the ASSIGNEE
Janet will have to pay in June 2016:
- $100,000 for the original deposit
- $150,000 for the increase in value which is also known as “the Lift”
Janet will have to pay in 2019:
- $400,000 for the rest of the condo
- Plus, applicable Property Transfer Tax which is calculated on the market value of the condo as of 2019
- Plus, applicable GST, which is calculated on the original Purchase Price of $500,000
*Note: The Lift can be paid:
- 100% in June 2016
- 100% in 2019
- Or a combination of the 2
Should I assign now? Or complete on the home first, then sell it?
This is great question – It will depend on your situation, as there could be benefits for either way. We can discuss in detail so that we can make the best decision for you based on your situation.