After I assign my condo, am I still responsible if the new buyer defaults?

Whether you remain liable after an assignment depends on the language of the original purchase agreement with the builder and the terms of the assignment agreement with your assignee.

Some builders' standard agreements hold the original buyer (assignor) secondarily liable even after the assignment is completed. This means if the assignee (the person you sold to) defaults on the transaction, the builder may turn to you to complete the purchase or to pay damages. This ongoing liability is a significant and often overlooked risk for assignors.

The builder's consent letter and the assignment agreement should address this issue directly. A well-drafted assignment agreement may include an indemnity from the assignee — a contractual promise that the assignee will be responsible for all future obligations and will reimburse the assignor for any claims arising from an assignee default. However, an indemnity is only as valuable as the assignee's financial capacity to pay.

Before agreeing to an assignment, review the original purchase agreement to understand your potential ongoing exposure and discuss with your lawyer whether the builder's consent letter releases you from that ongoing liability. Some builders will agree to release the original buyer on assignment; others will not. The negotiating outcome on this point can have substantial financial consequences.