How to Sell a Presale Condo Assignment in British Columbia: A Comprehensive Guide

Selling a presale condo in British Columbia involves a unique process known as an assignment of contract. This method allows the original purchaser to transfer their rights and obligations to a new buyer before the property's completion. Here's a step-by-step guide to navigate this process effectively.

1. Understand the Assignment of Contract

An assignment of contract enables the original buyer (assignor) to sell their interest in a presale condo to another party (assignee) before the property's construction is finalized. Essentially, the assignor sells the contract, not the physical property, allowing the assignee to assume all rights and responsibilities outlined in the original agreement.

2. Review the Original Purchase Agreement

Before proceeding, carefully examine the original purchase contract to determine if assignments are permitted. Some developers prohibit assignments, while others allow them under specific conditions. Key points to consider include:

• Assignment Clauses: Check if the contract explicitly permits assignments and under what terms.

• Developer Approval: Understand that even if assignments are allowed, the developer's written consent is typically required.

• Fees and Restrictions: Be aware of any assignment fees or marketing restrictions imposed by the developer.

3. Obtain Developer Approval

Securing the developer's approval is crucial. This involves:

• Submitting a Request: Formally request permission to assign the contract, adhering to any procedures outlined by the developer.

• Paying Assignment Fees: Be prepared to pay an assignment fee, which can vary but is often specified in the original contract.

• Complying with Conditions: Ensure all conditions set by the developer are met, such as restrictions on marketing the assignment publicly.

4. Market the Assignment

Once approval is obtained, you can market the assignment. Strategies include:

• Engaging a Realtor: Work with a real estate agent experienced in assignments to reach potential buyers.

• Targeted Marketing: Focus on channels that cater to investors and buyers interested in presale opportunities.

• Highlighting Benefits: Emphasize the advantages of purchasing the assignment, such as potential price appreciation and the opportunity to customize finishes.

5. Negotiate and Finalize the Sale

When a prospective buyer expresses interest:

• Negotiate Terms: Discuss the purchase price, deposit structure, and any other pertinent details.

• Draft the Assignment Agreement: Prepare a legal document outlining the transfer of rights and obligations to the assignee.

• Obtain Necessary Signatures: Ensure all parties, including the developer if required, sign the agreement.

6. Complete the Transaction

After finalizing the agreement:

• Transfer Deposits: The assignee typically reimburses the assignor for deposits already paid to the developer.

• Notify the Developer: Inform the developer of the completed assignment, providing all necessary documentation.

• Fulfill Remaining Obligations: The assignee assumes all remaining responsibilities, including future deposit payments and closing procedures upon the property's completion.

Important Considerations

• Legal and Tax Implications: Consult with legal and tax professionals to understand the implications of the assignment, including potential capital gains taxes.

• Market Conditions: Assess current real estate market conditions, as they can impact the desirability and value of the assignment.

• Transparency: Maintain open communication with all parties involved to ensure a smooth transaction.

By following this guide and seeking professional advice, you can navigate the process of selling a presale condo in British Columbia with confidence and success.