What is an Assignment?

Assignments are becoming more and more popular. Toronto and Vancouver are two very popular Canadian cities where assignments are commonplace, but... what is an assignment?

An assignment, according to the Real Estate Council of Ontario (RECO), is “ a sales transaction where the original buyer of the property (the “assignor”) allows another buyer (the “assignee”) to take over the buyer's rights and obligations of the Agreement of Purchase and Sale, before the original buyer closes on the property (that is, where the take possession of the property)” - Real Estate Council of Ontario, Feb 11, 2016. Essentially, an assignment is where a buyer of a property decides to sell that property to another buyer, before the property is built or ready to move into.

Assignments can be a useful tool for a variety of reasons; they allow investors to get a return on their investment (provided the property is worth more after purchase) without having to take on the risks and responsibilities associated with direct property ownership. Investors or homeowners have the opportunity to secure property before it is built, which is generally more affordable, and increases the rate of return on sale. Additionally, there can be lower capital requirements, or capital can be spread out over a longer period of time when purchasing an assignment property, which increases affordability or working capital for other investment opportunities.

If you are looking for an assignment property, check out BrokerPocket, Canada's largest off-market listing platform, which has thousands of assignment listings. If you are a real estate agent, you can sign up for BrokerPocket for free. If you are a client looking for access to BrokerPocket, ask your real estate agent if they are a member, or have them sign up!

Each Canadian province has its own regulations and requirements for assignment properties and the rules surrounding them. Make sure you ask your real estate agent, and consult with a qualified legal professional prior to investing in assignment properties.