Contemporary trends in Toronto’s dynamic condo market have presented a number of unique opportunities for buyers. In addition to compelling prices and increased leverage during the negotiation process, buyers also benefit from a surplus of inventory.

In addition to resale condos, the total number of assignment sale listings in Toronto has increased nicely over the past year.

Despite the advantageous nature of assignment sales, not all buyers are familiar with them and how they work.

In this article, we will look at what an assignment sale is, and what prospective buyers should understand before heading to the market. Continue reading for further insights.

Wish to know more about the unique advantages for condo buyers in Toronto today? Click here to read our blog on the topic.

A New Era in Toronto’s Condo Market

Assignment sales have become more prevalent in Toronto as a result of economic and industry changes. Despite seller’s market conditions in years passed, the condo market in Canada’s largest city is currently defined by a surplus of inventory. This includes not just resale units but also pre-construction properties.

Over the past few years, many buyers (both end users and investors) elected to purchase a pre-construction condo unit. However, not all of them will eventually take possession.

Occasionally, someone with the rights to a pre-construction may need to sell before the transaction has formally closed.

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Considering the purchase of a Toronto condo? Explore these related resources.

• A Guide to Average Condo Fees in Toronto
• What are the Top Amenities in Modern Toronto Condos?
• Understanding Lawyer Fees for Buying a House

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What is an Assignment Sale in Real Estate?

An assignment sale is a unique type of real estate transaction related to pre-construction and new build properties.

In simplistic terms, an assignment sale occurs when the buyer of a pre-construction property (often a condominium) elects to sell their purchaser’s rights before they are able to take possession of the property. If the owner of a newly acquired property elects to sell it after taking possession, this would qualify as a standard real estate transaction – not an assignment sale.

In an assignment sale scenario, the original purchaser is known as the assignor, with the incoming buyer being referred to as the assignee. Following the assignment process, the assignee will complete the original transaction with the developer and take possession of the property when it is available.

How do Assignment Sales Work?

In Toronto, an assignment sale cannot occur without the expressed consent of the developer.

When a pre-construction condo is initially purchased, the buyer (and eventual assignor) will sign a detailed purchase agreement. This contract outlines a number of critical details involving the buyer’s rights, possession timelines, property disclosures, and more.

The purchase agreement may also include an assignment clause. While specifics will vary, an assignment clause generally stipulates a buyer’s rights to sell their purchase agreement, and various requirements from the developer should they choose to do so.

Complicating this process further, developers may deny an assignment sale even if there is an assignment clause in the purchase agreement. Therefore, interested assignees should always verify developer approval before initiating a transaction.

What is an Assignment Fee?

While most developers permit assignment sales, they may impose a financial penalty, known as an assignment fee, when such transactions occur. Similar to other provisions of the assignment clause, any penalties or fees will be clarified in the original purchase agreement.

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Selling your Toronto condo? Explore these related resources for more insights.

• Essential Considerations For Selling a Condo
• Transitioning From a Condo to a Single-Family Residence: Considerations for Buyers
• How to Prepare Your Toronto High-End Condo for a Successful Sale

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Who Pays Assignment Fees?

Assignment fees are the formal responsibility of the assignor as they are confirmed in the initial purchase agreement. However, assignors often factor in this expense when negotiating the terms of the sale with the assignee, helping to offset a portion of the financial burden.

Armin Group: Your Link to Toronto’s Condo Market

Like any type of real estate transaction, you must work with a knowledgeable industry professional if you choose to purchase an assignment sale condo in Toronto. Regardless of what your ideal property looks like, Armin Group can help you find it.

Our unparalleled access to condo inventory is rooted in close, long-term relationships with a multitude of industry leaders and developers. Leveraging this network, we can connect you to condos both on and off the public market – including assignment properties.

After identifying a unit or property perfectly tailored to your needs and tastes, we will craft a bespoke buying strategy to make your dreams a reality.

Considering a condo purchase in Toronto? Armin Group can help. Reach us at ar********@************ty.ca or call 416.960.9995.