Jeff Shields RE/MAX Anchor Realty serving Qualicum Beach, Parksville, French Creek, Coombs of the Oceanside area on Vancouver Island British Columbia

Jeffery Shields - REALTOR

RE/MAX Anchor Realty
(Independently Owned and Operated)
113 West 2nd Avenue, PO Box 1890
Qualicum Beach, BC V9K 1T5 Canada
Cell: 250-240-5021
Bus: 250-752-2466
Fax: 250-752-2433
Toll Free: 800-668-3622

Assignment of Contracts

Assigning Contracts

On occasions, Buyers may wish to assign their rights in a Contract of Purchase and Sale to other parties, especially in a rising real estate market where they can re-sell the property at a higher price (lift) before the completion date. This situation can arise either before or after the execution of the original contract.

The general rule, in the absence of wording in the contract to the contrary, is that Buyers may assign their rights under the contract as long as they do not prejudice the rights of the Sellers. For example, if the Sellers are carrying the mortgage, they may not want the contract to be assigned to another party. Also, Buyers should be aware whether or not GST applies as a result of the assignment.

Section 36 of the Law & Equity Act provides that the Seller's consent to the assignment is not required, provided that notice in writing of the assignment is given to the Seller.

Source: Real Estate Council of British Columbia

Risks

If you are considering "buying a contract" (assignee), it is wise to understand the potential risks involved.

Should the developer cancel or not complete the project, what happens to the monies you (assignee) paid to the assignor of the contract? This will depend on how the Assignment of Contract is drafted and when and how the deposit and lift monies are paid. There is a possibility that should the developer not complete the project, you may lose that money.

The developer may or may not allow you, as the assignee, to change finishings such as carpets, tiles, cabinets, colours, etc. — usually depending on whether or not the materials have been ordered. They may also charge an additional fee to make any changes.

It is advisable to seek independent legal advice on all Assignment of Contracts.