Assignments Explained: What Investors Should Know Before Buying or Selling

Assignment sales have become a familiar part of the GTA real estate landscape. For investors, understanding how they work is essential whether you're buying, selling, or evaluating pre-construction opportunities.

What Is an Assignment?

An assignment is the sale of your rights under a pre-construction purchase agreement to another buyer before the building is completed and you take ownership. The assignee (new buyer) steps into your shoes: they assume your deposit obligations, contract terms, and eventually take title at closing. You receive the assignment price, which typically includes your deposits plus any profit.

Developer Approval and Fees

Most developers require approval before an assignment can proceed. They may charge an assignment fee ($5,000–$50,000+ depending on the project). The purchase agreement will specify the process. Failing to obtain approval can void the assignment.

Key Considerations for Sellers

You need a willing buyer and developer approval. Pricing should reflect market value of the unit at assignment, minus remaining deposit obligations. Tax treatment: if you're an investor, the profit may be taxable as income or capital gains. Consult an accountant. Real estate services can help price and market your assignment.

Key Considerations for Buyers

You inherit the original contract. Review it carefully—deposit schedule, closing timeline, upgrade policies. Ensure the developer has approved the assignment. Price should reflect current market conditions. Closing may be months or years away; plan your financing and hold strategy accordingly.

When Assignments Make Sense

Sellers may assign to exit before closing, lock in gains, or free up capital. Buyers may assign to acquire a unit in a sold-out project or secure a specific floor plan. Both sides should use experienced real estate and legal professionals. For guidance on pre-construction, resale, or investment strategy, contact King of Kings Group.