Assignment Sales
An assignment sale is when the original buyer (the "assignor") sells their contract to buy a pre-construction home to a new buyer (the "assignee") before final closing. You're not selling a finished house — you're selling your spot in the deal: the Agreement of Purchase and Sale, the deposits you've already put down, and any rise in value since you signed.
Assignment sales are one of the most misunderstood parts of pre-construction in the GTA — even experienced buyers Google it. This guide explains it simply: how it works, why it works on both condos and freehold homes, the all-important builder assignment clause and written consent, the HST and income-tax rules, and the OREA forms used to paper the deal.
On this page
- Does it work on condos and freehold? Yes — both
- How an assignment works — step by step
- Who's who in an assignment (and the 3 lawyers)
- Why people buy and sell assignments
- Costs, HST & taxes you must plan for
- Condo vs. freehold assignment — at a glance
- The paperwork: OREA assignment forms
- Buying an assignment — what to check
- FAQs
Does it work on condos and freehold? Yes — both
An assignment isn't a "condo-only" thing. You can assign a pre-construction condo, condo townhouse, freehold town, semi or detached — because what you're really transferring is a contract, and any contract can be assigned if the agreement allows it.
That last part is the whole ballgame. Your right to assign depends entirely on the assignment clause the builder wrote into your Agreement of Purchase and Sale (APS):
- If your APS contains an assignment clause permitting it — you can assign, usually subject to the builder's conditions (an assignment fee, a ban on public/MLS marketing, the project being a certain % sold, etc.).
- If your APS is silent or restricts assignment — you cannot simply assign. You must first obtain the builder's written consent. Without it, any "assignment" is not enforceable against the builder, and you risk breaching your contract.
How an assignment works — step by step
- Check the contract. Confirm your APS allows assignment, or get the builder's written consent first. Note the assignment fee and any marketing restrictions.
- Price it. Your asking price is typically: deposits paid + your profit (appreciation) + the original purchase price the assignee takes over. A realtor builds the math into Schedule B.
- Find the assignee. Because builders usually forbid public/MLS marketing, assignments are matched quietly through agents and qualified-buyer networks.
- Sign the assignment agreement. Using the correct OREA form (150 for condo, 145 for freehold), the assignor transfers all rights in the APS to the assignee.
- Get builder consent + pay the fee. The builder reviews and consents to the new buyer, who must usually re-qualify (deposits, ID, sometimes mortgage pre-approval).
- Assignee reimburses your deposits & profit (often on builder consent or final closing, per the agreement).
- Assignee closes with the builder on the original terms and takes title when the home is registered/built. You're out of the deal.
Who's who in an assignment (and the 3 lawyers)
It helps to picture the deal. An assignment connects three parties — and almost always involves three separate lawyers, each protecting a different side:
DeveloperSells the new pre-construction home
(Assignor)Sells the contract before closing
(Assignee)Closes the home with the builder
That's why each party should have their own lawyer, and why the agreement should spell out each lawyer's role:
- Drafts and approves the builder's consent to assign
- Confirms the new buyer qualifies and is bound by the builder's terms
- Collects the assignment fee and protects the builder's position
- Secures the return of deposits + the agreed profit
- Pushes for a release of the assignor's liability
- Handles HST/tax wording and the OREA schedules
- Reviews the original APS and every schedule
- Confirms title, closing costs and that warranty & incentives transfer
- Protects the assignee all the way to final closing
Why people buy and sell assignments
Sellers (assignors) assign when life changes before the home is ready — a job move, a growing family, a change in financing, or simply to free up capital and lock in a profit without waiting years for closing.
Buyers (assignees) like assignments because they can step into a near-complete (or already-built) home in a sold-out project, often pick up the original builder pricing plus the seller's premium, take a shorter wait to closing, and still receive the full Tarion new-home warranty and any remaining builder incentives.
Costs, HST & taxes you must plan for
Assignments are flexible but tax-heavy. Budget for these before you commit:
- Builder assignment fee — commonly a few thousand dollars up to ~$10,000+, sometimes waived as a VIP incentive ("free assignment").
- Legal fees — both sides should use a lawyer experienced specifically with assignments.
- Real estate commission on the assignment, if an agent is used.
- HST on the assignment. Since May 7, 2022, the federal rules make GST/HST apply to virtually all assignment sales of new or substantially-renovated housing — typically on the assignment portion (your profit + deposits, depending on structure). This is separate from the HST on the home itself.
- Income tax vs. capital gains. The CRA scrutinizes assignment "flips." Your profit may be taxed as fully-taxable business income (not the lower capital-gains rate) if it looks like a flip. The treatment depends on your facts.
Condo vs. freehold assignment — at a glance
| Point | Pre-Construction Condo | Pre-Construction Freehold |
|---|---|---|
| Can it be assigned? | Yes — if the APS allows or builder consents | Yes — if the APS allows or builder consents |
| OREA form used | Form 150 (Assignment – Condominium) | Form 145 (Assignment of APS) |
| Builder consent | Almost always required | Almost always required |
| Interim occupancy | Common — occupancy before registration | Usually closes straight to title |
| Public marketing | Usually restricted by the builder | Usually restricted by the builder |
| HST / tax rules | Same 2022 assignment rules apply | Same 2022 assignment rules apply |
The paperwork: OREA assignment forms
In Ontario, assignment deals are documented on standard OREA forms, with the original builder agreement attached as a schedule:
- OREA Form 150 — Assignment of Agreement of Purchase and Sale – Condominium (new or resale condos).
- OREA Form 145 — Assignment of Agreement of Purchase and Sale (freehold / general).
Both forms use the same structure: Schedule A for the custom clauses, Schedule B for the calculation of funds (deposits + profit), and Schedule C for a copy of the original builder Agreement of Purchase and Sale. Your lawyer and realtor complete these together so the deposits, profit and builder consent are all handled correctly.
Buying an assignment — what to check
- Does the original APS permit assignment, and has the builder consented in writing?
- Exactly what are you reimbursing — deposits, profit, and on what date?
- Who pays the assignment fee and HST, and is that confirmed in Schedule A?
- Are the original builder incentives and Tarion warranty intact for you as the new buyer?
- Have your lawyer and accountant reviewed the deal before you sign?
Thinking of buying or selling an assignment — condo or freehold — anywhere in the GTA? Tej Thakor & Usha Parmar handle pre-construction assignments end to end, including builder consent, the OREA forms, and the right legal/tax referrals. Contact us before you commit and we'll review your agreement with you.