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Assignment sale

An assignment sale refers to the process where a buyer sells their purchase rights in a property to another party before the original closing date.

In Ontario, assignment sales are governed by the terms outlined in the original Agreement of Purchase and Sale and the rules set out by the Ontario Real Estate Association (OREA).

– Permission: Check if the original Agreement of Purchase and Sale allows for assignment sales. Some agreements may have specific clauses that permit or restrict assignments.
– Approval: The seller (assignor) usually needs approval from the developer or builder to proceed with the assignment sale.
– Documentation: Proper documentation, including an Assignment Agreement, is required to legally transfer the purchase rights to the new buyer (assignee).
– Fees: There may be fees associated with the assignment sale, such as assignment fees charged by the developer or builder.
– Assignor: The original buyer (assignor) remains responsible for fulfilling their obligations under the original Agreement of Purchase and Sale unless otherwise stated in the Assignment Agreement.
– Assignee: The new buyer (assignee) assumes the rights and responsibilities of the original buyer once the assignment is completed.

– **Benefits**: Assignors can profit from the sale without taking possession of the property, while assignees may secure a property without competing in the initial market. – **Risks**: Both parties should be aware of potential risks, such as market changes affecting property value, and ensure they understand all terms and conditions before proceeding.

Remember, this is a general overview, and specific details can vary based on individual circumstances and the terms outlined in the original Agreement of Purchase and Sale.