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J. Scott Wilson
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Assignment of Agreements of Purchase and Sale

An Assignment of an agreement of purchase and sale is not the
transfer or assignment of real property but rather an assignment or
transfer of rights arising out of the agreement or contract relating to
real property.

Assignments have become increasingly more common in the
condominium sector. However, in all builder contracts there is a
restriction on the right of the initial buyer to assign the agreement
of purchase or sale or contract without the builder’s consent.
Builders will charge the buyer a fee for the consent to assign the
contract to a new or subsequent buyer.

When the agreement is assigned to the second buyer, this buyer
will be subject to both the benefits and obligations arising under the
agreement unless otherwise provided in the assignment agreement
between the initial buyer (the assignor) and the second/subsequent
buyer (the assignee). As an example, unless otherwise agreed to
between the assignor and the assignee in their assignment agreement,
the assignee will receive the benefit of the interest the builder credits
the buyer on the deposits paid to the builder as well as incur the
expense of paying builder's closing costs such as the Tarion Warranty
premium, utility meters and connections and development charges and educational levies. 

Here is a checklist of issues to be considered
when preparing an assignment of agreement of purchase and sale:

  1. Obtain a copy of the builder’s agreement of purchase and sale;
  2. What form of assignment agreement to be used;
  3. What is the original purchase price;
  4. What is the new purchase price
  5. The amount of builder deposits already paid by the assignor; are these deposits included in new purchase price or in addition to the purchase price as a reimbursement to the assignor (the builder will provide a credit for these deposits to the assignee on the final statement of adjustments)
  6. What is the deposit amount on the assignment transaction and who will hold the deposit – the agent/broker, the assignor’s lawyer etc.
  7. status of construction and closing dates – interim occupancy and final closing dates;
  8. the anticipated possession by the assignee – pre/post interim closing date
  9. the amount of the occupancy payment
  10. postdated cheques for occupancy payments and other adjustments
  11. the cost to obtain builder’s consent and status of obtaining such consent
  12. who pays for the consent
  13. builder’s form of assumption/assignment agreement
  14. who is paying the builder’s closing costs
  15. who is receiving credit for interest on the assignor’s deposits already paid to the builder
  16. How is payment of purchase price made – amount down, any amount paid prior to possession, amount paid upon the builder’s consent being obtained; amount paid on final closing etc. 
  17. Other Issues – Non-residency/withholding taxes - Assignor; GST/HST; Tarion registration by Assignor; Capital Gains Tax – Assignor
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