Paul is a single junior lawyer and works in downtown Toronto. He notices that across the street from his office a new condominium project is planned and he visits the sales office. Looking through the floor plans, he finds his perfect bachelor pad – a 1 bedroom plus den with balcony and proceeds to buy the unit by entering into an Agreement of Purchase and Sale with the Builder.
Purchasing a condo unit off plans from a builder is different than purchasing a resale condo unit. A resale condominium is already in existence and a Buyer takes ownership of a unit through the Land Registry System where on the day of closing the Buyer’s name is registered as owner of the unit.
Because Paul’s unit is not built yet and therefore not registered on Land Registry, Paul is essentially buying the right to own a condo unit in this particular development to be completed and registered in the future.
Two years go by and Paul is now married with a baby on the way. The condo development he purchased into has made great progress and completion of the construction is only another year away. However, Paul’s plans have now changed as he is looking to buy a house. He realizes his bachelor pad condo purchase will no longer be suitable for his future lifestyle. He decides to sell or “assign” his rights to the Agreement of Purchase & Sale he entered into with the Builder.
Simply put, Paul as the original Buyer is selling the contract to another who will become the new Buyer standing in the place of Paul as the original Buyer.
Advantages of Condo Assignments For Buyers
While purchasing a condo by assignment is a more complicated process than purchasing a resale condo, it does allow a buyer to get into a brand new unit without having to wait several years for construction to be completed. Buyers of assignment condos may also have the opportunity to get a desired floor plan that may otherwise be sold out by the builder.
Buyers of assignments also save money as prices for condo assignment sales are often 5-10% less than the builder’s current selling prices for comparable units. If the original buyer’s Agreement of Purchase & Sale was executed prior to December 31, 2007, it is exempt from the Toronto Land Transfer Tax and this benefit would also be passed onto the second buyer saving them thousands of dollars.
There is always a healthy supply of condominium units available for sale in the Yorkville area. However, the best suites – the preferred units with the best floor plans and the best views in the best buildings sell right away. These top valued condos sell within days and if you want the opportunity …