Frequently Asked Questions
Got questions about buying pre-construction? We’ve answered the most common ones to help you feel confident every step of the way.
Why should I purchase pre-construction condos vs. resale?
Pre-construction condos offer benefits like selecting your preferred floorplan, floor level, and finishes. They are brand new upon closing, reducing immediate maintenance needs. Additionally, buying at today's prices can lock in potential ROI as property values appreciate during the construction period.
What is the “Cooling Off Period”?
In Ontario, buyers have a 10-day "Cooling Off Period" after signing a pre-construction condo agreement. During this time, you can cancel the agreement without penalty. The period starts once the contract is signed by both parties.
Why do I need a real estate agent when buying pre-construction from a developer?
A real estate agent represents your interests, providing guidance through the buying process, offering market insights, and assisting with negotiations. Importantly, their commission is paid by the developer, so their services come at no direct cost to you.
What happens if my financial situation changes and I can’t close on the property in a few years? Can I decide not to close?
If you face financial challenges before closing, you may have the option to assign (sell) your agreement to another buyer. However, this depends on the developer's policies and the terms outlined in your agreement. It's crucial to discuss assignment clauses with your agent and lawyer early in the process.
Do I need to buy parking with my unit?
Purchasing a parking spot is optional and depends on your needs. In areas with excellent public transit, it might not be necessary. However, if you plan to live in the unit or rent to tenants who drive, investing in parking could be beneficial. Consider the cost versus potential rental income from the spot.
What type of unit is the best rental investment?
Rising rents in Toronto are pushing a majority of the market to rent smaller units, typically Studios that go between $1,700 to $1,900 per month and are considerably more affordable than renting anything larger than a 1 bedroom. Studios tend to be popular with students, recent graduates and young professionals that have are just starting their career. Professional individuals, couples and young families gravitate to 1 bedroom, 1 plus den, and 2 bedroom units.
Is the balcony or terrace included in the condo size?
No, when looking at condo floor plans you will find there is the interior and the exterior square footage noted. The interior size is for the interior of the building and the exterior size is of the condo’s outdoor space such as a balcony and/or terrace. Important to note that the condo unit’s monthly maintenance fee is calculated only on the interior size of the unit. This is because balconies are only for your use but are actually owned by the condominium corporation and covered by the common elements warranty.
Common Elements
Some condominium buildings include ‘common elements’, which are shared facilities in the building that every condo owner has access to and can enjoy. (e.g., recreational facilities, lobby, elevators, parking garage).Your monthly maintenance fee covers the expenses for maintaining these common elements.
Exclusive Use Common Elements
Depending on what kind of condo you’re buying, you may also have access to ‘exclusive common elements’. These may be things like balconies that are only for your personal use but are actually owned by the condominium corporation and covered by the common elements warranty. You will find these details in your agreement of purchase and sale and disclosure documents.
How do I cancel (rescind) my signed contract?
You have 10 calendar days (the Cooling Off Period) from the date your contract is executed by the Developer to cancel your contract without any penalty. You must provide your intention in writing, and ensure it is delivered to the Developer’s Sales Team in due time. I facilitate this recession process for my clients, ensuring the required paperwork is completed and that their deposit cheque is returned.
What happens if my financial situation changes and I can’t close on the property in a few years? Can I decide not to close?
It is up to the Developer’s discretion to allow an “Assignment” or “Assignment Sale” where a buyer sells their unit before Final Closing. I work directly with the Developer to ensure this critical clause is written into my clients’ contracts. I also inform my clients of any terms around assignment that might create limitations. For example, Developers might require that at least 70% of their units are sold before any buyers can sell. Some Developers also charge an Assignment Fee, which can range anywhere from $1,000 to $6,000.
What is Interim Occupancy?
During the Interim Occupancy period, buyers are legally allowed to move into their units before the building is officially registered and ownership is transferred. While construction may still be ongoing in certain areas, buyers can take possession once their specific unit is complete. At this stage, you won’t have title to the property yet, but you’ll pay an occupancy fee—similar to rent—which covers interest on the unpaid balance, estimated maintenance fees, and property taxes. Your mortgage payments don’t begin until final closing. To get your keys, your lawyer will handle the Interim Statement of Adjustments, sign necessary documents, and arrange any outstanding fees. Utilities are also transferred to your name during this time. Though the length of Interim Occupancy varies by project, it typically lasts several months while the Municipality conducts final inspections to ensure the developer has met their obligations.
What is Tarion?
For more than 40 years, Tarion has provided new home warranty protection to more than two million Ontario homes. We serve new home buyers and new home owners by ensuring that one of their life’s biggest investments is protected. Almost every new home in the province is covered by a new home warranty. This warranty protection is provided by Ontario’s builders and lasts up to seven years. It is backstopped by Tarion. More than 365,000 homes are currently enrolled in the warranty program. Every year about 50,000 new homes are enrolled. Tarion serves Ontario’s public interest by enhancing fairness and building confidence in the new home buying experience. Tarion is tasked with administering the Ontario New Home Warranties Plan Act (ONHWP Act).
What is Tarion’s Ontario Builder Directory?
It is always important to invest with a builder who has an excellent track record of sales, construction, delivery and execution. Experienced and reputable builders always deliver quality product that gives all homeowners great pride. One way to research a builder on your own is to look them up in Tarion’s Ontario Builder Directory section to ensure they are registered with Tarion. You’ll learn how many homes they have built in the last 10 years, and whether they have had any claims with Tarion over this period.
What is a Master-Planned Community?
One of the best investment strategies is to invest in the early stages of master-planned communities. These communities usually have multiple condominium towers or townhomes, retail and commercial office space, pedestrian paths and public green spaces. Some communities also have integrated public transit routes. As more families choose an urban lifestyle, they prefer these communities where they can live, work, play and thrive. Day-to-day groceries, banking, indoor and outdoor children’s activities, new community centres, daycares, co-working spaces all at walking distance within your community. Master-planned communities are becoming more popular in the GTA – just look at the Vaughan Metropolitan Centre, Erin Mills Mississauga and downtown’s Garrison Point project. With master-planned communities, you are investing into the future of the community.
What is Tarion’s Ontario Builder Directory?
It is always important to invest with a builder who has an excellent track record of sales, construction, delivery and execution. Experienced and reputable builders always deliver quality product that gives all homeowners great pride. One way to research a builder on your own is to look them up in Tarion’s Ontario Builder Directory section to ensure they are registered with Tarion. You’ll learn how many homes they have built in the last 10 years, and whether they have had any claims with Tarion over this period.
What is an Assignment?
It is always important to invest with a builder who has an excellent track record of sales, construction, delivery and execution. Experienced and reputable builders always deliver quality product that gives all homeowners great pride. One way to research a builder on your own is to look them up in Tarion’s Ontario Builder Directory section to ensure they are registered with Tarion. You’ll learn how many homes they have built in the last 10 years, and whether they have had any claims with Tarion over this period.
Is an Assignment legal?
It is always important to invest with a builder who has an excellent track record of sales, construction, delivery and execution. Experienced and reputable builders always deliver quality product that gives all homeowners great pride. One way to research a builder on your own is to look them up in Tarion’s Ontario Builder Directory section to ensure they are registered with Tarion. You’ll learn how many homes they have built in the last 10 years, and whether they have had any claims with Tarion over this period.
Is it necessary to get permission from the Seller/Developer to assign the Agreement of Purchase and Sale?
You need to consult the Agreement of Purchase and Sale. Generally, Developers will not permit assignments without the Developer’s consent, therefore every situation requires consultation with the Developer and your lawyer. Please note, there have been incidents where an unauthorized assignment has resulted in termination of the original agreement and the withholding of the deposit.
Will the Assignor's or Assignee's lawyer's services be adequate?
It is essential that the Assignor and Assignee each retain a lawyer with expertise in this area of real estate.
Can the Assignor's REALTOR® market on the MLS?
It all depends on whether the developer permits advertising of the assignment. Refer to the original Agreement of Purchase and Sale to see if there are any prohibitions against listing the assignment or consult the Developer (Most Agreements of Purchase and Sale contain such a prohibition).
What if the construction, occupancy, closing, or unit transfer date is delayed?
In the event of a delay, the assignment is still valid: the Assignee has agreed to take on their agreement and all responsibilities involved in it.
What if the Assignee doesn't close?
This is no different than in any sale. The Assignor in most cases is not released from the obligations under the Agreement of Purchase and Sale. Accordingly, both the Assignor and Assignee will be liable.
What is the cost of assigning an Agreement of Purchase and Sale?
If the Developer consents to an assignment, there will generally be an administration fee and legal fees. These fees will vary. Consult the original Agreement of Purchase and Sale and the Developer.
When does the Assignor get their money?
In an assignment, depending on the closing date and the terms of the assignment agreement that Assignor and Assignee agreed on, the Assignor is usually paid when: a) the Assignee gets possession or occupancy or, b) when the original seller approves the assignment, if applicable or, c) when the Assignee obtains legal title.
Who gets the interest, if any, payable by the Builder on the original deposits?
Unless otherwise specified, the interest is likely to be paid to the Assignor.
Who pays the interim occupancy costs?
Once assignment is finalized, the Assignee will typically pay occupancy costs through to the final closing and will pay the final closing costs unless specifically negotiated otherwise.
Does the Assignor have to claim Capital Gains for tax purposes?
Whether a resident or non-resident, the Assignor should discuss this question with a tax advisor.
Why should I purchase pre-construction condos vs. resale?
Pre-construction condos offer benefits like selecting your preferred floorplan, floor level, and finishes. They are brand new upon closing, reducing immediate maintenance needs. Additionally, buying at today's prices can lock in potential ROI as property values appreciate during the construction period.
What is the “Cooling Off Period”?
In Ontario, buyers have a 10-day "Cooling Off Period" after signing a pre-construction condo agreement. During this time, you can cancel the agreement without penalty. The period starts once the contract is signed by both parties.
Why do I need a real estate agent when buying pre-construction from a developer?
A real estate agent represents your interests, providing guidance through the buying process, offering market insights, and assisting with negotiations. Importantly, their commission is paid by the developer, so their services come at no direct cost to you.
What happens if my financial situation changes and I can’t close on the property in a few years? Can I decide not to close?
If you face financial challenges before closing, you may have the option to assign (sell) your agreement to another buyer. However, this depends on the developer's policies and the terms outlined in your agreement. It's crucial to discuss assignment clauses with your agent and lawyer early in the process.
Do I need to buy parking with my unit?
Purchasing a parking spot is optional and depends on your needs. In areas with excellent public transit, it might not be necessary. However, if you plan to live in the unit or rent to tenants who drive, investing in parking could be beneficial. Consider the cost versus potential rental income from the spot.
What type of unit is the best rental investment?
Rising rents in Toronto are pushing a majority of the market to rent smaller units, typically Studios that go between $1,700 to $1,900 per month and are considerably more affordable than renting anything larger than a 1 bedroom. Studios tend to be popular with students, recent graduates and young professionals that have are just starting their career. Professional individuals, couples and young families gravitate to 1 bedroom, 1 plus den, and 2 bedroom units.
Is the balcony or terrace included in the condo size?
No, when looking at condo floor plans you will find there is the interior and the exterior square footage noted. The interior size is for the interior of the building and the exterior size is of the condo’s outdoor space such as a balcony and/or terrace. Important to note that the condo unit’s monthly maintenance fee is calculated only on the interior size of the unit. This is because balconies are only for your use but are actually owned by the condominium corporation and covered by the common elements warranty.
Common Elements
Some condominium buildings include ‘common elements’, which are shared facilities in the building that every condo owner has access to and can enjoy. (e.g., recreational facilities, lobby, elevators, parking garage).Your monthly maintenance fee covers the expenses for maintaining these common elements.
Exclusive Use Common Elements
Depending on what kind of condo you’re buying, you may also have access to ‘exclusive common elements’. These may be things like balconies that are only for your personal use but are actually owned by the condominium corporation and covered by the common elements warranty. You will find these details in your agreement of purchase and sale and disclosure documents.
How do I cancel (rescind) my signed contract?
You have 10 calendar days (the Cooling Off Period) from the date your contract is executed by the Developer to cancel your contract without any penalty. You must provide your intention in writing, and ensure it is delivered to the Developer’s Sales Team in due time. I facilitate this recession process for my clients, ensuring the required paperwork is completed and that their deposit cheque is returned.
What happens if my financial situation changes and I can’t close on the property in a few years? Can I decide not to close?
It is up to the Developer’s discretion to allow an “Assignment” or “Assignment Sale” where a buyer sells their unit before Final Closing. I work directly with the Developer to ensure this critical clause is written into my clients’ contracts. I also inform my clients of any terms around assignment that might create limitations. For example, Developers might require that at least 70% of their units are sold before any buyers can sell. Some Developers also charge an Assignment Fee, which can range anywhere from $1,000 to $6,000.
What is Interim Occupancy?
During the Interim Occupancy period, buyers are legally allowed to move into their units before the building is officially registered and ownership is transferred. While construction may still be ongoing in certain areas, buyers can take possession once their specific unit is complete. At this stage, you won’t have title to the property yet, but you’ll pay an occupancy fee—similar to rent—which covers interest on the unpaid balance, estimated maintenance fees, and property taxes. Your mortgage payments don’t begin until final closing. To get your keys, your lawyer will handle the Interim Statement of Adjustments, sign necessary documents, and arrange any outstanding fees. Utilities are also transferred to your name during this time. Though the length of Interim Occupancy varies by project, it typically lasts several months while the Municipality conducts final inspections to ensure the developer has met their obligations.
What is Tarion?
For more than 40 years, Tarion has provided new home warranty protection to more than two million Ontario homes. We serve new home buyers and new home owners by ensuring that one of their life’s biggest investments is protected. Almost every new home in the province is covered by a new home warranty. This warranty protection is provided by Ontario’s builders and lasts up to seven years. It is backstopped by Tarion. More than 365,000 homes are currently enrolled in the warranty program. Every year about 50,000 new homes are enrolled. Tarion serves Ontario’s public interest by enhancing fairness and building confidence in the new home buying experience. Tarion is tasked with administering the Ontario New Home Warranties Plan Act (ONHWP Act).
What is Tarion’s Ontario Builder Directory?
It is always important to invest with a builder who has an excellent track record of sales, construction, delivery and execution. Experienced and reputable builders always deliver quality product that gives all homeowners great pride. One way to research a builder on your own is to look them up in Tarion’s Ontario Builder Directory section to ensure they are registered with Tarion. You’ll learn how many homes they have built in the last 10 years, and whether they have had any claims with Tarion over this period.
What is a Master-Planned Community?
One of the best investment strategies is to invest in the early stages of master-planned communities. These communities usually have multiple condominium towers or townhomes, retail and commercial office space, pedestrian paths and public green spaces. Some communities also have integrated public transit routes. As more families choose an urban lifestyle, they prefer these communities where they can live, work, play and thrive. Day-to-day groceries, banking, indoor and outdoor children’s activities, new community centres, daycares, co-working spaces all at walking distance within your community. Master-planned communities are becoming more popular in the GTA – just look at the Vaughan Metropolitan Centre, Erin Mills Mississauga and downtown’s Garrison Point project. With master-planned communities, you are investing into the future of the community.
What is Tarion’s Ontario Builder Directory?
It is always important to invest with a builder who has an excellent track record of sales, construction, delivery and execution. Experienced and reputable builders always deliver quality product that gives all homeowners great pride. One way to research a builder on your own is to look them up in Tarion’s Ontario Builder Directory section to ensure they are registered with Tarion. You’ll learn how many homes they have built in the last 10 years, and whether they have had any claims with Tarion over this period.
What is an Assignment?
It is always important to invest with a builder who has an excellent track record of sales, construction, delivery and execution. Experienced and reputable builders always deliver quality product that gives all homeowners great pride. One way to research a builder on your own is to look them up in Tarion’s Ontario Builder Directory section to ensure they are registered with Tarion. You’ll learn how many homes they have built in the last 10 years, and whether they have had any claims with Tarion over this period.
Is an Assignment legal?
It is always important to invest with a builder who has an excellent track record of sales, construction, delivery and execution. Experienced and reputable builders always deliver quality product that gives all homeowners great pride. One way to research a builder on your own is to look them up in Tarion’s Ontario Builder Directory section to ensure they are registered with Tarion. You’ll learn how many homes they have built in the last 10 years, and whether they have had any claims with Tarion over this period.
Is it necessary to get permission from the Seller/Developer to assign the Agreement of Purchase and Sale?
You need to consult the Agreement of Purchase and Sale. Generally, Developers will not permit assignments without the Developer’s consent, therefore every situation requires consultation with the Developer and your lawyer. Please note, there have been incidents where an unauthorized assignment has resulted in termination of the original agreement and the withholding of the deposit.
Will the Assignor's or Assignee's lawyer's services be adequate?
It is essential that the Assignor and Assignee each retain a lawyer with expertise in this area of real estate.
Can the Assignor's REALTOR® market on the MLS?
It all depends on whether the developer permits advertising of the assignment. Refer to the original Agreement of Purchase and Sale to see if there are any prohibitions against listing the assignment or consult the Developer (Most Agreements of Purchase and Sale contain such a prohibition).
What if the construction, occupancy, closing, or unit transfer date is delayed?
In the event of a delay, the assignment is still valid: the Assignee has agreed to take on their agreement and all responsibilities involved in it.
What if the Assignee doesn't close?
This is no different than in any sale. The Assignor in most cases is not released from the obligations under the Agreement of Purchase and Sale. Accordingly, both the Assignor and Assignee will be liable.
What is the cost of assigning an Agreement of Purchase and Sale?
If the Developer consents to an assignment, there will generally be an administration fee and legal fees. These fees will vary. Consult the original Agreement of Purchase and Sale and the Developer.
When does the Assignor get their money?
In an assignment, depending on the closing date and the terms of the assignment agreement that Assignor and Assignee agreed on, the Assignor is usually paid when: a) the Assignee gets possession or occupancy or, b) when the original seller approves the assignment, if applicable or, c) when the Assignee obtains legal title.
Who gets the interest, if any, payable by the Builder on the original deposits?
Unless otherwise specified, the interest is likely to be paid to the Assignor.
Who pays the interim occupancy costs?
Once assignment is finalized, the Assignee will typically pay occupancy costs through to the final closing and will pay the final closing costs unless specifically negotiated otherwise.
Does the Assignor have to claim Capital Gains for tax purposes?
Whether a resident or non-resident, the Assignor should discuss this question with a tax advisor.
Why should I purchase pre-construction condos vs. resale?
Pre-construction condos offer benefits like selecting your preferred floorplan, floor level, and finishes. They are brand new upon closing, reducing immediate maintenance needs. Additionally, buying at today's prices can lock in potential ROI as property values appreciate during the construction period.
What is the “Cooling Off Period”?
In Ontario, buyers have a 10-day "Cooling Off Period" after signing a pre-construction condo agreement. During this time, you can cancel the agreement without penalty. The period starts once the contract is signed by both parties.
Why do I need a real estate agent when buying pre-construction from a developer?
A real estate agent represents your interests, providing guidance through the buying process, offering market insights, and assisting with negotiations. Importantly, their commission is paid by the developer, so their services come at no direct cost to you.
What happens if my financial situation changes and I can’t close on the property in a few years? Can I decide not to close?
If you face financial challenges before closing, you may have the option to assign (sell) your agreement to another buyer. However, this depends on the developer's policies and the terms outlined in your agreement. It's crucial to discuss assignment clauses with your agent and lawyer early in the process.
Do I need to buy parking with my unit?
Purchasing a parking spot is optional and depends on your needs. In areas with excellent public transit, it might not be necessary. However, if you plan to live in the unit or rent to tenants who drive, investing in parking could be beneficial. Consider the cost versus potential rental income from the spot.
What type of unit is the best rental investment?
Rising rents in Toronto are pushing a majority of the market to rent smaller units, typically Studios that go between $1,700 to $1,900 per month and are considerably more affordable than renting anything larger than a 1 bedroom. Studios tend to be popular with students, recent graduates and young professionals that have are just starting their career. Professional individuals, couples and young families gravitate to 1 bedroom, 1 plus den, and 2 bedroom units.
Is the balcony or terrace included in the condo size?
No, when looking at condo floor plans you will find there is the interior and the exterior square footage noted. The interior size is for the interior of the building and the exterior size is of the condo’s outdoor space such as a balcony and/or terrace. Important to note that the condo unit’s monthly maintenance fee is calculated only on the interior size of the unit. This is because balconies are only for your use but are actually owned by the condominium corporation and covered by the common elements warranty.
Common Elements
Some condominium buildings include ‘common elements’, which are shared facilities in the building that every condo owner has access to and can enjoy. (e.g., recreational facilities, lobby, elevators, parking garage).Your monthly maintenance fee covers the expenses for maintaining these common elements.
Exclusive Use Common Elements
Depending on what kind of condo you’re buying, you may also have access to ‘exclusive common elements’. These may be things like balconies that are only for your personal use but are actually owned by the condominium corporation and covered by the common elements warranty. You will find these details in your agreement of purchase and sale and disclosure documents.
How do I cancel (rescind) my signed contract?
You have 10 calendar days (the Cooling Off Period) from the date your contract is executed by the Developer to cancel your contract without any penalty. You must provide your intention in writing, and ensure it is delivered to the Developer’s Sales Team in due time. I facilitate this recession process for my clients, ensuring the required paperwork is completed and that their deposit cheque is returned.
What happens if my financial situation changes and I can’t close on the property in a few years? Can I decide not to close?
It is up to the Developer’s discretion to allow an “Assignment” or “Assignment Sale” where a buyer sells their unit before Final Closing. I work directly with the Developer to ensure this critical clause is written into my clients’ contracts. I also inform my clients of any terms around assignment that might create limitations. For example, Developers might require that at least 70% of their units are sold before any buyers can sell. Some Developers also charge an Assignment Fee, which can range anywhere from $1,000 to $6,000.
What is Interim Occupancy?
During the Interim Occupancy period, buyers are legally allowed to move into their units before the building is officially registered and ownership is transferred. While construction may still be ongoing in certain areas, buyers can take possession once their specific unit is complete. At this stage, you won’t have title to the property yet, but you’ll pay an occupancy fee—similar to rent—which covers interest on the unpaid balance, estimated maintenance fees, and property taxes. Your mortgage payments don’t begin until final closing. To get your keys, your lawyer will handle the Interim Statement of Adjustments, sign necessary documents, and arrange any outstanding fees. Utilities are also transferred to your name during this time. Though the length of Interim Occupancy varies by project, it typically lasts several months while the Municipality conducts final inspections to ensure the developer has met their obligations.
What is Tarion?
For more than 40 years, Tarion has provided new home warranty protection to more than two million Ontario homes. We serve new home buyers and new home owners by ensuring that one of their life’s biggest investments is protected. Almost every new home in the province is covered by a new home warranty. This warranty protection is provided by Ontario’s builders and lasts up to seven years. It is backstopped by Tarion. More than 365,000 homes are currently enrolled in the warranty program. Every year about 50,000 new homes are enrolled. Tarion serves Ontario’s public interest by enhancing fairness and building confidence in the new home buying experience. Tarion is tasked with administering the Ontario New Home Warranties Plan Act (ONHWP Act).
What is Tarion’s Ontario Builder Directory?
It is always important to invest with a builder who has an excellent track record of sales, construction, delivery and execution. Experienced and reputable builders always deliver quality product that gives all homeowners great pride. One way to research a builder on your own is to look them up in Tarion’s Ontario Builder Directory section to ensure they are registered with Tarion. You’ll learn how many homes they have built in the last 10 years, and whether they have had any claims with Tarion over this period.
What is a Master-Planned Community?
One of the best investment strategies is to invest in the early stages of master-planned communities. These communities usually have multiple condominium towers or townhomes, retail and commercial office space, pedestrian paths and public green spaces. Some communities also have integrated public transit routes. As more families choose an urban lifestyle, they prefer these communities where they can live, work, play and thrive. Day-to-day groceries, banking, indoor and outdoor children’s activities, new community centres, daycares, co-working spaces all at walking distance within your community. Master-planned communities are becoming more popular in the GTA – just look at the Vaughan Metropolitan Centre, Erin Mills Mississauga and downtown’s Garrison Point project. With master-planned communities, you are investing into the future of the community.
What is Tarion’s Ontario Builder Directory?
It is always important to invest with a builder who has an excellent track record of sales, construction, delivery and execution. Experienced and reputable builders always deliver quality product that gives all homeowners great pride. One way to research a builder on your own is to look them up in Tarion’s Ontario Builder Directory section to ensure they are registered with Tarion. You’ll learn how many homes they have built in the last 10 years, and whether they have had any claims with Tarion over this period.
What is an Assignment?
It is always important to invest with a builder who has an excellent track record of sales, construction, delivery and execution. Experienced and reputable builders always deliver quality product that gives all homeowners great pride. One way to research a builder on your own is to look them up in Tarion’s Ontario Builder Directory section to ensure they are registered with Tarion. You’ll learn how many homes they have built in the last 10 years, and whether they have had any claims with Tarion over this period.
Is an Assignment legal?
It is always important to invest with a builder who has an excellent track record of sales, construction, delivery and execution. Experienced and reputable builders always deliver quality product that gives all homeowners great pride. One way to research a builder on your own is to look them up in Tarion’s Ontario Builder Directory section to ensure they are registered with Tarion. You’ll learn how many homes they have built in the last 10 years, and whether they have had any claims with Tarion over this period.
Is it necessary to get permission from the Seller/Developer to assign the Agreement of Purchase and Sale?
You need to consult the Agreement of Purchase and Sale. Generally, Developers will not permit assignments without the Developer’s consent, therefore every situation requires consultation with the Developer and your lawyer. Please note, there have been incidents where an unauthorized assignment has resulted in termination of the original agreement and the withholding of the deposit.
Will the Assignor's or Assignee's lawyer's services be adequate?
It is essential that the Assignor and Assignee each retain a lawyer with expertise in this area of real estate.
Can the Assignor's REALTOR® market on the MLS?
It all depends on whether the developer permits advertising of the assignment. Refer to the original Agreement of Purchase and Sale to see if there are any prohibitions against listing the assignment or consult the Developer (Most Agreements of Purchase and Sale contain such a prohibition).
What if the construction, occupancy, closing, or unit transfer date is delayed?
In the event of a delay, the assignment is still valid: the Assignee has agreed to take on their agreement and all responsibilities involved in it.
What if the Assignee doesn't close?
This is no different than in any sale. The Assignor in most cases is not released from the obligations under the Agreement of Purchase and Sale. Accordingly, both the Assignor and Assignee will be liable.
What is the cost of assigning an Agreement of Purchase and Sale?
If the Developer consents to an assignment, there will generally be an administration fee and legal fees. These fees will vary. Consult the original Agreement of Purchase and Sale and the Developer.
When does the Assignor get their money?
In an assignment, depending on the closing date and the terms of the assignment agreement that Assignor and Assignee agreed on, the Assignor is usually paid when: a) the Assignee gets possession or occupancy or, b) when the original seller approves the assignment, if applicable or, c) when the Assignee obtains legal title.
Who gets the interest, if any, payable by the Builder on the original deposits?
Unless otherwise specified, the interest is likely to be paid to the Assignor.
Who pays the interim occupancy costs?
Once assignment is finalized, the Assignee will typically pay occupancy costs through to the final closing and will pay the final closing costs unless specifically negotiated otherwise.
Does the Assignor have to claim Capital Gains for tax purposes?
Whether a resident or non-resident, the Assignor should discuss this question with a tax advisor.
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