1. Why should I assign?
2. How soon should I be posting my unit for the Assignment?
3. What is the Interim Closing Date?
4. What is a Final Closing?
5. What are the occupancy costs?
6. What are the closing costs?
7. Can I change anything in the Agreement?
8. Is it Legal and Binding?
9. What is the cost for the assignment?
10. Should I request consent from the developer?
11. Do I need the permission of the developer?
12. If I sell my units, when do I get my money?
13. How much money would I get?
14. What if the Buyer/Assignee doesn't close?
15. Do I need a Lawyer?
16. Should I arrange Financing?
17. What if the development is delayed?
18. Why don't I see these units on the market?
19. How do I know how much I should sell for?
20. If I assign, do I have to claim the Capital Gains?
21. What price should I pay when I want to buy another unit?
22. Can I make my agreement Conditional on Financing?
23. When does the deal become legal and binding?
1. Why should I assign?
As a seller, you should assign if you have decided not to wait until the
final closing to get your money, or you do not wish to incur the monthly carrying
cost (interim occupancy) and final closing costs, or you feel that by selling now
is a good decision based on future market conditions.
As a buyer, the biggest advantage to buying an assignment is that you are getting
a unit that is new and should be less expensive than the market value and the pre-sale
value. Since it cannot be advertised by conventional means (MLS) (newspaper), there
are fewer people looking at it, less demand usually lowers the price.
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2. How soon should I be posting my unit for the
Assignment?
You should post your unit immediately. It's like fishing, you can bait the
hook but until you drop your line in the water you will never know if there are
any fish in the lake
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3. What is the Interim Closing Date?
The Interim Closing is the date the Developer hands over the keys and allows
the owner to take occupancy even though the building is not yet registered with
the City.
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4. What is a Final Closing?
Final Closing refers to the date soon after the building is registered as
a Condominium Corporation with the City. On this date, the purchaser pays the balance
owing under the contract of purchase and arranges their own mortgage.
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5. What are the occupancy costs?
During the interim occupancy, and, according to the condominium act you would
be responsible for the monthly payments of:
http://www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_98c19_e.htm#BK96
(keep in mind that the interim occupancy could last up to 2 years and that most
will register the building before 9 months)
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6. What are the closing costs?
http://www.homelegalcost.com/condobuy.asp. Your closing costs will vary and
to get a detailed statement of adjustments you should ask your lawyer. This is the
response most agents will tell you, it's a great way to get rid of you, if you call
the builders lawyer they will react by saying, "We act on behalf of the developer,
you would have to check with your own lawyer." in most cases your lawyers response
would be "I don't have the adjustments from the builders lawyer yet. If you
need to speak with the city or government, well, don't even get me started.
The major expenses would be the
GST and education levies,
development charges and land transfer
provincial and
city can add up to over $10,000. The developer has more than
likely added many more costs that you are not aware of not to mention the Tarion
warranty enrolment fees, Hydro, Water and Gas hook-up fees and You will find it
impossible to find out exactly how much until the moment comes whereby you are sitting
in front of your lawyer and it is the final closing day. (budget for $15,000 to
$18,000) to find out if you need to pay the new land tax
click here. If you assign your unit, the closing cost will be the responsibility
of the assignee. If you are buying (assignee), your costs will be minimized if you
move in, expect $6,000-$9,000.
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7. Can I change anything in the Agreement?
In an assignment, there are three things that are negotiable between the
Assignor and the Assignee.
The New Purchase Price – The offering price of the assignment
The Deposit – The amount that the buyer is willing to put as an initial down
payment (usually 25% on average).
The Closing Date – Depending on what you agree on, ideally you would have
them close the assignment on the same day that it is available for occupancy
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8. Is it Legal and Binding?
Yes. Once all the conditions outlined in the Assignment Agreement are met,
consent has been given and the deposit cheque has been issued to the Developer,
the contract is under seal and considered legally binding.
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9. What is the cost for the assignment?
In most cases the developer will consent to an assignment providing that
the assignor or assignee agrees to pay an administrative fee ($3,000 - $5,000 on
average). This may already be written into your agreement.
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10. Should I request consent from the developer?
It is better to find a buyer for your property first. If you go in and ask
for assignment rights now, the developer will probably say no in that there is nothing
in it for them and they don't wish to have all their past purchasers selling and
marketing and advertising units that are still legally belonging to the developer.
Let us do our job, we will find the buyer without advertising or causing any disturbance,
we will then negotiate with the developer using words that they will understand.
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11. Do I need the permission of the developer?
If the developer does not cooperate with the assignment we will entertain
other methods of closing the transaction, usually involving later closing dates.
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12. If I sell my units, when do I get my money?
In an assignment, depending on the closing date that assignor & assignee
agreed on, ideally you would have the vendor's balance cheque issued to you a few
days after the assignment closing date.
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13. How much money would I get?
Your assignment price - your original purchase price - all costs incurred
until assignment closing.
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14. What if the Buyer/Assignee doesn't close?
You would be ultimately responsible for the closing, however you should be
able to keep the deposits and claim further damages against the assignee
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15. Do I need a Lawyer?
You should always be legally represented in all matters of real estate. Finding
a lawyer knowledgeable in new home condominium assignment law is the challenge.
To find out more about AssignIt.ca's Real Estate Lawyer,
click here.
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16. Should I arrange Financing?
Even if you are selling the unit, as a fall back you should have your financing
arranged to cap your interest, finding a mortgage representative whom is familiar
with new home condominiums is essential. You want to work with someone who understands
the appraised value and will advance based on this value. To find out more about
AssignIt.ca's Mortgage Specialist, click here.
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17 What if the development is delayed?
It probably will be, be patient if balance funds are owed to you and realize
that the assignee has agreed to take on your agreement and all responsibilities
involved in it. If you're the assignee, enjoy the lower monthly occupancy fees (less
than rent). Your mortgage payment will kick in on the final closing.
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18. Why don't I see these units on the market?
Because the building is not yet registered with the City, the Developer does
not give the authority to advertise these units on the Toronto Multiple Listing
Service or by any other conventional methods.
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19. How do I know how much I should sell for?
Determine the selling price the developer is now asking and reduce your price
accordingly to make it more attractive. Remember, it is much easier for the purchaser
to buy direct from the developer, they feel that they are making a much safer transaction
rather than dealing with a 3rd party transaction
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20. If I assign, do I have to claim the Capital
Gains?
You should speak with an accountant. Any Accountant will say that you should
pay taxes on any and all gains to protect their interest. It seems to be on the
honour system in that the unit never registers in your name.
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21. What price should I pay when I want to buy
another unit?
When you contact us, our staff does a market analysis to see what similar
units are selling for. You may be interested in purchasing in a bulk new home sale
transaction.
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22. Can I make my agreement Conditional on Financing?
Yes! You can negotiate to have three to five banking days to obtain satisfactory
financing in the Agreement.
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23. When does the deal become legal and binding?
The deal becomes legal and binding after the developer has signed the Assignment
Consent Agreement.
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