Assignment Of Real Estate Purchase And Sale Agreement Template for Canada

An Assignment Of Real Estate Purchase And Sale Agreement is a legal document that allows you to transfer your rights and obligations as the original purchaser to a new buyer before closing. This contract is essential when you need to exit a real estate transaction while ensuring the original purchase agreement remains valid and enforceable.

When do you need this document?

You'll need this assignment agreement in several common scenarios. If you've purchased a pre-construction property and want to sell before completion, this document legally transfers your contract to the new buyer. Investment property flippers often use assignments to capture appreciation without actually closing on the property. Life circumstances such as job relocation, financial hardship, or family changes may also necessitate assigning your purchase agreement. Some buyers use assignments strategically in hot markets where property values increase significantly between signing and closing dates.

Key legal considerations

The assignment must clearly identify all parties including the assignor, assignee, and original vendor. You need to specify the assignment consideration, which is typically separate from the original purchase price. The document should address who handles the original deposit and any additional deposits required. Critical clauses include the assignee's assumption of all obligations under the original agreement, representations about the property's condition, and provisions for obtaining vendor consent if required. You must also consider tax implications, as assignment profits may be subject to capital gains or income tax. The agreement should specify whether HST/GST applies to the assignment fee and who bears responsibility for payment.

Legal requirements in Canada

Under the Real Estate and Business Brokers Act (REBBA) and provincial equivalents, assignments must comply with strict disclosure requirements. The Statute of Frauds mandates that real estate assignments be in writing and properly signed to be enforceable. Many original purchase agreements contain clauses requiring vendor approval for assignments, often accompanied by administrative fees. The Land Registration Reform Act and provincial Land Titles Acts govern how assignments are registered and transferred. You must ensure compliance with anti-money laundering regulations under the Proceeds of Crime Act, which may require additional identification and source of funds documentation. Provincial Law Societies regulate legal representation requirements, and some provinces mandate lawyer involvement in real estate transactions. Income tax implications must be considered under federal legislation, particularly regarding the characterization of assignment profits as capital gains versus business income.