Buying and selling pre-construction units via the assignment clause is best executed with the assistance of legal representation. Advice from a lawyer well-versed in this niche market is highly advised.
When Ben purchased his 2–bedroom plus den condo unit three years ago he worked with both a real estate agent and a lawyer that specialized in pre-construction real estate to help guide him along this journey, answer any questions he may have, and help him understand all the legal jargon and clauses included within his Agreement of Purchase and Sale.
Pre-construction assignment sales are legal but can be a little bit more complicated than your usual resale because it involves 3 parties (the developer, the assignor original buyer, and the assignee new buyer).
The developer that Ben bought his condo unit from included an assignment sale clause within the Agreement of Purchase and Sale. This now legally allows Ben to sell the pre-construction contract for the unit to someone else, however he will have to follow the rules, regulations, and restrictions that are set forth within the Agreement of Purchase and Sale.
An Agreement of Purchase and Sale is a legally binding contract between the developer and Ben, therefore if an assignment clause is in written into the contract and Ben follows the rules set forth within it, then yes, the transaction is considered to be legal.
Even though assignment sales are legal, every pre-construction developers’ rules, regulations, and restrictions may differ from one to the next, each assignment sale is unique and differs from the next.
Now that Ben is contemplating selling the contract for his pre-construction condo unit as occupancy nears, he has chosen to work with the same real estate agent and lawyer again to help him navigate the assignment sale in order to make sure he follows the developer’s protocols and doesn’t break any laws along the way.
In order for Ben to legally complete the assignment sale, he will have to compensate the developer for the transaction, usually in the form of legal and administration fees for transferring the contract for the 2–bedroom plus den unit from his name to the new buyer’s name. The cost of the pre-construction assignment sale will be outlined with the Assignment of Purchase and Sale.
In order to understand what is legal and what’s not when it comes to assignment sales, CondoNow’s team of pre-construction Certified Experts are here to help you with any questions or concerns you may have. Don’t hesitate to contact us today.
