Developers may withhold permission for a variety of reasons. 

To begin with, the developer would not consent to an assignment if:

• In accordance with the Original Agreement and disclosure statement, the Buyer is prohibited.

• If there is plenty of inventory left in their project, reselling with what needs to be sold. 

• The original buyer may be denied consent if all required deposits have not yet been paid. If approved, it could be a condition of the assignment process. 

• New Buyers cannot supply a Mortgage Approval certificate from a reputable financial institution until the Property closing date.

• Lastly, assignment requests made too close to the occupancy date or final closing date may not be approved. Especially when the developers lawyers have all the final closing legal paperwork completed with the Developers Lawyers.

Amounts you will have to pay

Four immediate costs should be considered when purchasing an assignment.

Let’s begin. For an original purchaser to be permitted to assign their contract, all required deposits must be paid to the developer. Consequently, you, the New Buyer, will be required to pay the Seller in full. Where the Original Buyer might have paid the amount over the course of one year, New Buyer would be expected to pay it in full on Assignment approval. This amount will be paid to the Seller and the amounts that the Developers is holding in-trust will belong to the New Buyer upon the Assignment completion.

In second place. It is common for Sellers to look for some profit when selling via Assigning their contract, so New Buyer may agree to shell out more than the original purchase price. So in addition to paying the original deposits as per the Agreement, New Buyer will not only have to pay the original deposits amounts but the difference between the original purchase price and the increased price.

Thirdly. Due to the complexity of Assignments, the amount of legal fees incurred may vary and it is advisable to discuss this with the lawyer prior to getting representation. It may be beneficial to have a lawyer review the original purchase agreement, including any amendments, as well as any disclosures, special offers and discounts of any nature. New Buyer needs to fully understand the Agreement.

Fourthly, The seller is responsible for paying the realtor’s commission. Unless otherwise agreed, the Buyer’s Agent Commission will be included in the Real Estate Commissions if the Buyer is represented by the Buyer’s Agent.

Finally. It is common for developers to charge assignment fees ranging from nothing to $10,000. Sometimes a percentage of the purchase price or selling price is charged. Buyers and sellers will have to decide who is responsible for covering the developer’s assigning costs.

In conclusion, it is imperative to get the developer’s final approval. Furthermore, keep in mind that all fees the original buyer agreed to are simply transferred to the New Buyer.

If you are looking to Sell your Condo as an Assignment or are looking to buy an Assignment, we will be happy to set aside some time to discuss and represent you. Click here to set up a Zoom Meeting.