1.Assignments are not easy to sell and put together. First is it very difficult to get a fair market on an assignment as most builders prohibit their advertising and listing on MLS. It can take months and many deals can be presented and fall through at different stages of the negotiation- patience is warranted.
2.. most RE agents don’t do assignments- You should really deal with people specializing in this matter as assignment are more complicated than deals in the resale market
3. most lawyers have not idea how to do an assignment- You should really deal with professionals in the matter of assignments- from the real estate agent to the accountant and to the lawyers – on both end of the transaction!
4. builders are not crazy about assignments- They do offer an Assignment clause on most contracts, but getting involved in the assignments sales requires time and a team specializing but also tasks with the responsibility to ensure the builder is not left in the cold. One way or another the contract was sold- they don’t really care by who as long as they are not the ones holding the proverbial bag.
There are fees involved with getting the assignment sale approved by the builder and can take time to get the approval.
5. Pay close attention on how the profit from the sale of the assignment will be treated by CRA- You need to get specialized advice on this matter- Speak to your accountant and tax expert. From the sellers perspective, the profit and deposit is subject to HST and the profit is also taxed either like Capital gains (50% taxable) or the profit is fully tax the rate prescribed to the tax payer selling the assignment. The seller should be fully aware of his tax exposure- the CRA can come knocking years after the deal is done and will want their HST portion and Tax portion. It will really depend on how many deals the assignors does on any given time. The assignee should also be aware of the tax obligation of the seller (assignor) as if the seller defaults on his tax obligation to the CRA, the tax man can go after the buyer to fulfill the tax debt and leave the buyer scrambling to go after the seller- good luck with that – especially if the seller is a non resident!