Buying & Due Diligence
Assignment Sale Condo Ontario: What Buyers and Sellers Need to Know
Selling or buying a pre-construction condo before it closes works differently than a resale, and the differences catch a lot of people off guard.
An assignment sale happens when the original purchaser of a pre-construction condo transfers their agreement of purchase and sale to a new buyer before the unit is registered and before the original purchaser ever takes title. It's legally a sale of the contract, not the unit itself, and that distinction changes how the transaction works.
Most builder agreements require the builder's written consent before an assignment can proceed, often with a fee attached. There are usually two separate closing dates to plan around: interim occupancy and final closing on registration.
- What is sold
- The purchase agreement, not the unit itself
- Builder consent
- Usually required in writing, often with a fee
- Two closings
- Interim occupancy and final closing on registration
- Occupancy fees
- Responsibility must be spelled out in the assignment
- Warranty transfer
- Tarion registration needs to be updated to the new buyer
- Tax treatment
- HST and rebate rules differ from a standard resale
What to check first
- 1Confirm the builder's consent requirement and any assignment fee stated in the original agreement.
- 2Confirm the agreement doesn't prohibit assignment outright.
- 3Get the builder's consent in writing before any deposit or payment changes hands.
- 4Clarify who is responsible for interim occupancy fees between the assignment and final closing.
- 5Confirm how the Tarion new home warranty registration transfers to the new buyer.
- 6Clarify the deposit structure and any HST or rebate implications of the assignment.
- 7Have the assignment agreement itself reviewed independently before signing.
Common mistakes owners make
- Assuming an assignment closes like a normal resale transaction.
- Not getting the builder's consent confirmed in writing before proceeding.
- Overlooking that there are effectively two closings, occupancy and final, each with its own costs.
- Leaving interim occupancy responsibility unclear between assignor and assignee.
- Missing the HST and rebate questions that assignment transactions can trigger.
Documents to gather
- The original agreement of purchase and sale
- The builder's assignment policy or consent letter
- The assignment agreement itself
- Any interim occupancy statement already issued
- Tarion warranty registration documents
- The builder's disclosure statement
When to get a closer look
- The builder is refusing or delaying consent to the assignment.
- It's unclear who owes interim occupancy fees during the transition.
- HST or rebate questions arise that neither party fully understands.
- The assignment agreement's terms feel unclear or one-sided.
Does Fee & Reserve Check help with this?
Not yet. Fee & Reserve Check compares the budget and the Reserve Fund Study inside a status certificate package. A status certificate does not exist until the condominium corporation is registered. Once the building is registered and you have a status certificate, this tool can read it and show how the numbers compare.
Related reading
Frequently asked questions
Do all builders allow assignment sales?
Most pre-construction agreements permit assignment with the builder's consent and a fee, but some restrict or prohibit it. Check the specific agreement rather than assuming.
Who pays interim occupancy fees on an assigned unit?
This is negotiated between the assignor and assignee and should be spelled out explicitly in the assignment agreement. Neither side should assume it's automatic.
Does the new buyer get the same Tarion warranty coverage?
Generally the warranty follows the home, but registration details need to be updated with Tarion to reflect the new owner. Confirm this directly rather than assuming it happens on its own.
Is HST different on an assignment sale?
Assignment sales can have different HST treatment than a resale of a completed home, and the rules have changed over time. This is an area where current, specific tax guidance matters.
What happens if the builder refuses consent?
Review the original agreement's assignment clause for the builder's stated reasons and process for consent, and get any refusal or condition in writing before deciding next steps.
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Independent guidance for Ontario condo owners. Not legal advice. Not legal representation. Not an engineering opinion. It is not a substitute for advice about your specific situation from a licensed professional. Condo Owner Advocate helps you understand your situation. You decide what to do.