A pre-construction assignment, also known as an "assignment sale," is when a buyer who has purchased a pre-construction property, such as a condo or house, before it is completed, decides to sell their contract to another buyer before the property is registered.
In a pre-construction assignment, the original buyer (assignor) transfers their rights and obligations under the original contract of purchase to a new buyer (assignee). This can occur at any point before the original property is completed and registered, with some builders placing restrictions on the timing of assignment sales.
The new buyer typically pays the original buyer for the assignment of the contract, which is the difference between the original purchase price and the new market price of the property. The new buyer then becomes the owner of the property once it is completed and registered, but is responsible for fulfilling the terms of the original purchase agreement.
Pre-construction assignments can be an attractive option for buyers looking to invest in a property before it is completed, as they can potentially purchase at a lower price and realize a profit upon completion of the property. However, they can also involve additional risks, including construction delays, changes to the original purchase agreement, and the potential for the builder to reject the assignment.