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With many new condominium projects in Toronto still under construction and in the pre-registration phases, it is possible that some buyers’ may find themselves contemplating purchasing a unit that is being sold as an Assignment. What does this mean? It means that instead of actually purchasing the unit (as you would for a suite in a building that is completed and registered with the City) you are purchasing the contract that the Seller (who is referred to as the Assignor in this type of transaction) has with the Builder of the condominium.
I have often been approached by clients about Assignments and one of the first pieces of advice that I give them is that they need to realize that professional advice is a must! From the outset, anyone dealing with this type of transaction should consider getting in touch with a Real Estate Lawyer that has experience dealing with these types of transactions.
For those of you that are just at the start of the process and are trying to get a feel for how it goes, I’ve included some basic guidelines of what to expect to happen and what your responsibilities are when you are the purchaser (Assignee) of an Assignment Condominium. Check out the list below, and if you have any questions let me know!
Buying An Assignment Condominium Guidelines
Definitions:
Assignor: An Assignor is the original buyer of the unit from the Builder/Developer.
Assignee: An Assignee is the buyer of the Agreement of Purchase and Sale from the Assignor.
Assignee Guidelines:
- Enter into an Assignment Agreement.
- Obtain original Agreement of PUrchase and Sale and related documents. Review obligations carefully. Have a lawyer review.
- The Assignee may pay the following on occupancy: Final Deposit, Occupancy fees (estimated property taxes, estimated common expenses, and interest on purchase price). The Assignee usually delivers 6-12 postdated cheques to the Builder.
- The Assignee may pay the following to the Builder on final closing: Estimated property taxes for up to 2 years, Hydro/water/gas meter installation and connection charges, Development charges/levies, Tarion New Home Warranty, Discharge of builder’s mortgages, Builder’s lawyer’s Law Society charge, Compensation for the Builder-cost of handling the Assignor’s deposit cheques, 2 months of occupancy fees for reserve fund, Other amounts set out in the Agreement of Purchase and Sale. (these costs are typically not financed with a mortgage.
- The Assignee is responsible for the following additional fees: Legal fees and disbursements, Land transfer tax, GST/HST rebate, Municipal levies.
- Assignee takes occupancy of unit and all applicable financial obligations.
- After the condominium is registered, on final closing the Builder transfers title to Assignee. The Assignee pays the balance to the Builder. The Assignee may also pay any amount still owed to the Assignor depending on the terms of the Assignment.
The post Buying A Condo: Guidelines for Buying an Assignment Condominium appeared first on Charles Francis Blog
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