Buying an Ottawa Condo by way of Assignment
Most people who buy a condo take ownership through the Land Registry System. Just before the day of closing, you transfer money to your lawyer and if you need additional funds via a mortgage, your lawyer will register your ownership of the property and the interest of the mortgage lender.
An Assignment means that you are buying a ‘right’ to own a condo that is not in the Land Registry System. Just like an option put or call on the stock market, during that time before the property is registered with a mortgage you can sell your interest in that unit. Usually the condo has not been built or it is not ready for occupancy and the building has not been registered. This ‘right’ is just a paper transaction and not the transfer of the actual property. The closing of the Assignment occurs BEFORE the condo is registered. The individual who buys the ‘right’ will eventually close and register their ownership of the condo at some later date.
The number of Assignment transactions is growing rapidly. For sellers who bought a new condo from plans years earlier and whose plans have changed, this is an opportunity to sell before they have to get a mortgage and incur additional closing costs such as that dreaded, double Land Transfer Tax. For buyers who want a brand new condo without having to wait years for construction to finish, or who cannot find what they want in the resale market, it represents a lot more choice.
Most Assignments are sold on an ‘Exclusive’ basis. They are also more complicated than a regular sale because a mortgage cannot be obtained on the closing of the Assignment, and will need to be postponed until the day of registration. Other issues such as occupancy, reimbursement of the seller’s deposits and more must be taken into account.Buying an Ottawa Condo by way of Assignment.
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