What is an assignment of a condo purchase agreement and how does it work in Ontario?

An assignment occurs when the original buyer of a pre-construction condominium (the "assignor") sells their rights under the purchase agreement to a new buyer (the "assignee") before the unit is complete and before title transfers. The assignee steps into the assignor's shoes and is bound by the original purchase agreement with the builder.

The assignor typically receives payment from the assignee that may include a return of deposits paid to the builder plus a profit reflecting any appreciation in the unit's value since signing. The assignee then takes over the deposit obligations and ultimately completes the transaction with the builder at the final closing.

Assignment transactions are complex because three parties are involved — the assignor, assignee, and builder — and the original agreement controls much of what is possible. Most new-construction agreements require the builder's consent before an assignment can occur, and builders frequently charge a consent fee. Some agreements prohibit assignments entirely until certain project milestones are reached.

From the assignee's perspective, you inherit the terms of the original agreement, including the closing date, adjustments, and upgrade selections. You do not get a fresh rescission period. Due diligence on an assignment purchase requires reviewing the original purchase agreement, the Tarion addendum, all selection sheets, any prior amendments, and the proposed assignment agreement itself.