1. Why should I assign?
2. What are the occupancy costs?
3. What are the closing costs?
4. Do I have to pay the GST?
5. What is the cost for the assignment?
6. Should I request consent from the developer?
7. When do I get my money?
8. How much money would I get?
9. What is the cost to assign?
10. What if the Buyer/Assignee doesn't close?
11. How soon should I be posting my unit for the Assignment?
12. Can I market my unit on the MLS?
13. What closing fees would I have to pay?
14. Should I use the Developer's recommended agent?
15. Should I use my friend/ Neighbour who is an agent?
16. Do I need a Lawyer?
17. Should I arrange Financing?
18. What if the development is delayed?
19. Who pays the Interim Occupancy Costs?
20. How do I know how much I should sell for?
21. Do I need the permission of the developer?
22. If I assign, do I have to claim the Capital Gains?
1. Why should I assign?
You should assign if you have decided not to wait until the final closing
to get your money, or you do not wish to pay the monthly carrying cost (interim
occupancy) and final closing costs, or you feel that selling now would be a good
decision based on future market conditions.
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2. What are the occupancy costs?
During the interim occupancy, and, according to the condominium act you would
be responsible for the monthly payments of:
interim occupancy fees (keep in mind that the interim occupancy could last
up to 2 years and that most will register the building before 9 months)
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3. What are the closing costs?
closing costs
Your closing costs will vary and to get a detailed statement of adjustments you
should ask your lawyer. This is the response most agents will tell you, it's a great
way to get rid of you, if you call the builders lawyer they will react by saying,
"We act on behalf of the developer, you would have to check with your own lawyer."
in most cases your lawyers response would be "I don't have the adjustments from
the builders lawyer yet. If you need to speak with the city or government, well,
don't even get me started.
The major expenses would be the
GST, Education Levies,
land transfer provincial tax, and
Development Charges, which can add up to over $10,000. The developer
has more than likely added many more costs that you are not aware of and that you
will find impossible to find out until the moment comes whereby you are sitting
in front of your lawyer and it is the final closing day. (budget for $18,000) to
find out if you need to pay the new land tax check out this link:
Land Transfer Tax
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4. Do I have to pay the GST?
If this is not your primary residence then yes, you will have to pay a portion
of the GST on the purchase price of your unit on the final closing. Assign it and
this tax is waived to the new occupant.
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5. What is the cost for the assignment?
In most cases the developer will consent to an assignment providing that
the assignor or assignee agrees to pay an administrative fee ($3,000 - $5,000).
This may already be written into your agreement.
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6. Should I request consent from the developer?
It is better to find a buyer for your property first. If you go in and ask
for assignment rights now, the developer will probably say no in that there is nothing
in it for them and they don't wish to have all their past purchasers selling and
marketing and advertising units that still legally belong to the developer. Let
us do our job! We will find the buyer without advertising or compromising the developer
in any way, we will then negotiate with the developer using words that they will
understand.
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7. When do I get my money?
In an assignment, depending on the closing date that assignor & assignee
agree on, ideally you would get the vendor's balance cheque issued to you few days
after the closing date.
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8. How much money would I get?
New assignment price - your original purchase price - all costs incurred
until closing
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9. What is the cost to assign?
The developer will charge an administration fee $2,500 - $5,000 plus commissions
payable
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10. What if the buyer/assignee doesn't close?
You would ultimately be responsible for the final closing, however you should
be able to keep the deposits and claim further damages against the assignee.
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11. How soon should I be posting my unit for the
Assignment?
You should post your unit immediately, It's like fishing, you can bait the
hook but until you drop your line in the water you will never know if there are
any fish in the lake
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12. Can I advertise my unit on the MLS?
In almost all cases no! You do not legally own this property, the developer
will likely charge a tall penalty and they may even attempt to keep the unit and
force you to forfeit your deposits.
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13. What closing fees would I have to pay?
Once you have assigned your unit there is only a nominal legal fee which
includes legal consultation and execution of the undertaking to get the balance
of funds owed to you
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14. Should I use the Developer's recommended agent?
This poses a conflict of interest, who are they really representing? The
developer's primary goal is to sell remaining inventory
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15. Should I use my friend/ Neighbour who is an
agent?
They are not allowed to MLS or locally advertise the unit nor will they do
an open house, this reduces their chances by nearly 98%. Other than walking up and
down the street with a sandwich board "condo for sale" they are left with only their
present clients and when there are hunderds of thousands of units that can be sold
on the traditional MLS its doubtful that your friend can find a buyer for you.
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16. Do I need a Lawyer?
You should always be legally represented in all matters of real estate. Finding
a lawyer whom is knowledgable in new home condominium assignment law is the challenge.
To get in contact with our in house real estate lawyer Stanley Grossman, click here.
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17 Should I arrange Financing?
As a fall back you should have your financing arranged to cap your interest,
finding a mortgage representitive whom is familiar with new home condominiums is
essential. To get in contact with RBC's Mortgage Specialist Scott Westlake, click
here.
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18. What if the development is delayed?
It probably will be, be patient if balance funds are owed to you and realize
that the assignee has agreed to take on your agreement and all responsibilities
involved in it.
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19. Who pays the Interim Occupancy Costs?
If you assign your unit the assignee will pay as of the assignment closing
date through to final closing and will pay the final closing costs unless specifically
negotiated otherwise.
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20. How do I know how much I should sell for?
Determine the selling price the developer is now asking and reduce your price
accordingly to make it more attractive. Remember, it is much easier for the purchaser
to buy direct from the developer. Buyers feel that they are making a much safer
transaction rather than dealing with a 3rd party.
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21. Do I need the permission of the developer?
If the developer does not cooperate with the assignment, we will entertain
other methods of closing the transaction, usually involving later closing dates.
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22. Do I have to pay capital gains?
You should speak with an accountant. Any Accountant will say that you should
pay taxes on any and all gains to protect your interest. It seems to be on the honor
system in that the unit never registers in your name in the case of an assignment.
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