Pre-Completion Builder Contract Assignments with Verified Institutional Liquidity.

Under legislation enacted on May 7, 2022 (Bill C-32), all assignment sales in Canada are subject to HST on the assignment transaction. Previously, if the assignor originally intended to occupy the home as a primary residence, the assignment could be HST-exempt. Now, HST automatically applies to the deposit and any profit premium paid to the assignor.

Assignees purchasing for primary residency or renting out the property for a minimum of 12 continuous months are eligible to apply for the CRA New Residential Housing Rebate or the New Residential Rental Property (NRRP) Rebate up to $24,000. 101GROUP accounts for these adjustments directly within the statement of adjustments.

A builder will only allow an assignment if the assignor complies with the assignment clause in the initial Agreement of Purchase and Sale. Consent fees range from $0 (promotional VIP incentives) to $5,000–$10,000 plus vendor legal review fees ($1,000–$2,500).

Developer consent typically requires between 10 to 30 business days. The developer’s lawyers require complete assignee mortgage pre-approvals, photo identification, signed assignment agreements, and confirmation of legal representation before releasing consent.

Interim Occupancy occurs when the municipality issues an occupancy permit and the builder gives you keys to the completed suite. During this phase (which can last 3 to 12 months), the building is not yet registered with the land registry office. You do not own the title, nor do you make mortgage payments.

Instead, you pay an “occupancy fee” consisting of: 1) Interest on the remaining purchase price balance; 2) Estimated monthly property taxes; and 3) Projected common element maintenance fees. Final Closing occurs once the condominium corporation is formally registered and your mortgage funds to transfer legal title.

Most Schedule-A institutional lenders underwrite the mortgage based on the lower of the new assignment purchase price or the current appraised value at final closing. The original builder only receives their initial contracted purchase price.

The assignor’s profit premium is usually held in trust by lawyers until developer consent is executed and/or final closing is completed, depending on how Form 150 is negotiated. 8Twelve Mortgage verifies that your institutional lender recognizes the assignment contract markup so you do not encounter unanticipated cash injection calls.