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10 Essential Things to Know About Real Estate Assignment Sales (for Sellers)

— We take our content seriously. This article was written by a real person at BREL.

What’s an assignment?

An assignment is when a Seller sells their interest in a property before they take possession – in other words, they sell the contract they have with the Builder to a new purchaser. When a Seller assigns a property, they aren’t actually selling the property (because they don’t own it yet) – they are selling their promise to purchase it, along with the rights and obligations of their Agreement of Purchase and Sale contract.  The Buyer of an assignment is essentially stepping into the shoes of the original purchaser.

The original purchaser is considered to be the Assignor; the new Buyer is the Assignee. The Assignee is the one who will complete the final sale with the Builder.

Do assignments only happen with pre-construction condos?

It’s possible to assign any type of property, pre-construction or resale, provided there aren’t restrictions against assignment in the original contract. An assignment allows a Buyer of a any kind of home to sell their interest in that property before they take possession of it.

Why would someone want to assign a condo?

Often with pre-construction sales, there’s a long time lag between when the original contract is entered into, when the Buyer can move in (the interim occupancy period) and the final closing. It’s not uncommon for a Buyer’s circumstances to change during that time…new job out of the city, new husband or wife, new set of twins, etc. What worked for a Buyer’s lifestyle 4 years ago doesn’t always work come closing time.

Another common reason why people want to assign a contract is financial. Sometimes, the original purchaser doesn’t have the funds or can’t get the financing to complete the sale, and it’s cheaper to assign the contract to a new purchaser, than it is to renege on the sale.

Lastly, assignment sales are also common with speculative investors who buy pre-construction properties with no intention of closing on them. In these cases, the investors are banking on quick price appreciation and are eager to lock in a profit now, vs. waiting for the original closing date.

What can be negotiated in an assignment sale?

Because the Assignee is taking over the original purchaser’s contract, they can’t renegotiate the price or terms of the contract with the Builder – they are simply taking over the contract as it already exists, and as you negotiated it.

In most cases, the Assignee will mirror the deposit that you made to the Builder…so if you made a 20% deposit, you can expect the new purchaser to do the same.

Most Sellers of assignments are looking to make a profit, and part of an assignment sale negotiation is agreeing on price. Your real estate agent can guide you on price, which will determine your profit (or loss).

Builder Approval and Fees

Remember that huge legal document you signed when you made an offer to buy a pre-construction condo? It’s time to take it out and actually read it.

Your Agreement of Purchase & Sale stipulated your rights to assign the contract. While most builders allow assignments, there is usually an assignment fee that must be paid to the Builder (we’ve seen everything from $750 to $7,000).

There may be additional requirements as well, the most common being that the Builder has to approve the assignment.

Marketing Restrictions

Most pre-construction Agreements of Purchase & Sale from Toronto Builders do not allow the marketing of an assignment…so while the Builder may give you the right to assign your contract, they restrict you from posting it to the MLS or advertising it online. This makes selling an assignment extremely difficult…if people don’t know it’s available for sale, how they can possibly buy it?

While it may be very tempting to flout the no-marketing rule, BE VERY CAREFUL. Buyers guilty of marketing an assignment against the rules can be considered to have breached the Agreement, and the Builder can cancel your contract and keep your deposit.

We don’t recommend advertising an assignment for sale if it’s against the rules in your contract.

So how the heck can I find a Buyer?

There are REALTORS who specialize in assignment sales and have a database of potential Buyers and investors looking for assignments. If you want to be connected with an agent who knows the ins and outs of assignment sales, get in touch…we know some of the best assignment agents in Toronto.

What are the tax implications of real estate assignment?

Always get tax advice from a certified accountant, not from the internet (lol).

But in general, any profit made from an assignment is taxable (and any loss can be written off). The new Buyer or Assignee will be responsible for paying land transfer taxes and any HST that might be due.

How much does it cost to assign a pre-construction condo?

In addition to the Builder assignment fees, you will likely have to pay a real estate commission (unless you find the Buyer yourself) and legal fees. Because assignments are more complicated, you can expect to pay higher legal fees than you would for a resale property.

How does the closing of an assignment work?

With assignment sales, there are essentially 2 closings: the closing between the Assignor and the Assignee, and the closing between the Assignee and the Builder. With the first closing (the assignment closing) the original purchaser receives their deposit + any profit (or their deposit less any loss) from the Assignee. On the second closing (between the Builder and the Assignee), the Assignee pays the remaining amount to the Builder (usually with the help of a mortgage), and pays land transfer taxes. Title of the property transfers from the Builder to the Assignee at this point.

I suppose it could be said that there is a third closing too, when the Buyer takes possession of the property but doesn’t yet own it…this is known as the interim occupancy period. The interim occupancy occurs when the unit is ready to be occupied, but not ready to be registered with the city. Interim occupancy periods in Toronto range from a few months to a few years. During the interim occupancy period, the Buyer occupies the unit and pays the Builder an amount roughly equal to what their mortgage payment + condo fees + taxes would be. The timing of the assignment will dictate who completes the interim occupancy.

Assignments vs. Resale: Which is Better?

We often get calls from people who are debating whether they should assign a condo they bought, or wait for the building to register and then sell it as a typical resale condo.

Pros of Assigning vs. Waiting

• Get your deposit back and lock in your profit sooner
• Avoid paying land transfer taxes
• Avoid paying HST
• Maximize your return if prices are declining and you expect them to continue to decline
• Lifestyle – sometimes it just makes sense to move on

Cons of Assigning vs Waiting

• The pool of Buyers for assignment sales is much smaller than the pool of Buyers for resale properties, which could result in the sale taking a long time, getting a lower price than you would if you waited, or both.
• Marketing restrictions are annoying and reduce the chances of finding a Buyer
• Price – What is market value? If the condo building hasn’t registered and there haven’t been any resales yet, it can be difficult to determine how much the property is now worth. Assignment sales tend to sell for less than resale.
• Assignment sales can be complicated, so you want to make sure that you’re working with an agent who is experienced with assignment sales, and a good lawyer.

Still thinking of assignment your condo or house ? Get in touch and we’ll connect you with someone who specializes in assignment sales and can take you through the process.

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Raj Singh says:

What can be things to look for, especially determining market value for an assigned condo? I’m the assignee.

Sydonia Moton says:

Y would u need a lawyer when u buy a assignment property

Gideon Gyohannes says:

Good clear information!

Who pays the assignment fee to the developer? Assignor or Assignee?

Thanks Gideon 416 4591919

Melanie Piche says:

It’s almost always the Seller (though I suppose could be a point of negotiation).

Fiona Rourke says:

If there are 2 names on the agreement and 1 wants to leave and the other wants to remain… does the removing of 1 purchaser constitute an assignment

Brendan Powell says:

An assignment is one way to add or remove people from a contract, but not the only way…and not the simplest. Speak to your lawyer for advice on what makes the most sense for your specific situation. For a straightforward resale purchase you could probably just do an amendment signed by all parties. If it’s a preconstruction purchase with various deposits paid, etc it could be more complicated.

Katerina says:

Depends on the Developer. Some of them remove names via assignments only.

Haroon says:

Is there any difference in transaction process If assigner or seller of a pre constructio condo is a non resident ? Is seller required to get a clearance certificate from cRA to complete the transaction ?

Nathalie says:

Hello , i would like to know the exact steps for reassignment property please.

Amazing info. Thanks team. I may just touch base with you when my property in Stoney Creek is completed in. 2020. I may need to reassign it to someone Thanks

Victoria Bachlowa says:

If an assignor renegs on the deal and refuses to close because they figured out they could get more money and the assignment was already approved by the builder and all conditions fulfilled what can the Assignee do. I have $33,000 dollars in trust in the real estate’s trust fund. They sent me a mutual release which I have not signed. The interim occupancy is Feb. 1 and the closing is schedule for Mar. 1, 2019. I have financing in place, was ready to move in Feb. 1 and I have no where to live.

Definitely talk to your lawyer right away. They’ll want to look at your agreement of purchase and sale and will be able to advise you.

With assignment sales, there are essentially 2 closings: the closing between the Assignor and the Assignee, and the closing between the Assignee and the Builder. With the first closing (the assignment closing) the original purchaser receives their deposit + any profit (or their deposit less any loss) from the Assignee. Can I assume that these closing happen at the same time? I’m not sure how and when I would be paid as the Assignor.

What happens to the deposits or any profits already paid if the developer cancels the project after an assignment?

Hi, Did you get answer to this? I did an assignment sale last year and now the builder is not completing apparently and they are asking for their money back. Can they do that? After legal transactions, the lawyer simply said “the deal didn’t go through”. Apparently builder and the person who assumed the assignment agreed on taking out the deal. What do I have to pay back after it was done a year ago

This is definitely a question for your lawyer – as realtors we are not involved in that part of the transaction. I would expect that just as the builder would have to refund your deposits, you would likely need to do the same…but talk to your lawyer. As to whether the builder can cancel a project, yes they always reserve that right (but the details of how and under what circumstances would be in your original purchase agreement). It’s one of the annoying risks in buying preconstruction!

I completed the sale of my assignment in Dec 2015 however the CRA says I should be reporting the capital income in 2016 when the assignee closed his deal with the developer in July 2016. That makes no sense to me since I got all my money in Dec 2015. Can you supply any clarification on that CRA policy please?

You’d have to talk to the CRA or an accountant – we’re real estate agents,so we can’t give tax advice.

Hassan says:

Hello, You said that there are two closings. The first one between the assignor and the assignee and the second one between the builder and the new buyer (assignee). My question is that in the first closing does the assignee have to pay the assignor the deposit they have paid and any profit in cash or will the bank add this to the assignee’s mortgage?

The person doing the assigning usually gets their money at the first closing.

Kathy says:

What is the typical real estate free to assign your contract with the builder ?

Hi Kathy While we do few assignments (as they are rarely successful, and builders do not make it easy), in past we have charged more or less the same as we do for a typical resale listing. While there are elements to assignments that should be easier than a resale (eg staging), many other aspects of assignments are much MORE time-consuming, and the risk much higher since attempts to find a buyer for assignments are often unsuccessful. It’s also important to note that due to the extra complication, lawyer’s fees to assign are typically higher than resale as well–although more $ for the purchase side vs the sale side.

Mitul Patel says:

If assignee has paid small amount of deposit plus the original 25% deposit that the assignor has paid to the builder and gets the Keys to the unit since interim possession has been completed, when the condo registration is done and assignee is getting mortgage from the Bank or Pays the remaining balance to the Builder using his savings and decides not to pay the Balance of the Profit amount to Assignor, what are the possibilities in this kind of scenario?

You’d need to talk to a lawyer to find out the options.

David says:

How much exactly do brokers get paid at sale of Assignment? i.e. Would the broker’s fee be a % of your assignment selling price or your home’s selling price? I’m really looking for a clear answer.

I am using this website’s calculator associated with selling your home in Ontario. But there is no information on selling assignments. https://wowa.ca/calculators/commission-calculator-ontario

Realtors set their own commission, so there is no set fee- that website is likely the commission that that agent offers. We often see commissions of 4-5% for assignments. The fee is a % of the price of the assignment – for example, you originally bought for $500K; you’re now assigning for $600K – commission would be payable on the $600K.

Candace says:

Question: if i bought a pre construction condo, can i sell it as soon as it closes or do i have to live in it for 1 year after closing in order to avoid capital gains taxes?

Or does the 1 year start as soon as you move in?

I would suggest you talk to your accountant re: HST credit implications and capital gains, but if you sell it for more than you paid for it, capital gains usually apply.

You mention avoid paying HST when you assign your property. What is the HST based on? It’s not a commercial property that you would pay HST. Explain. Thanks.

HST and assignments are complex and this question is best answered specific to your situation by your accountant and real estate lawyer. In some cases HST is applicable on assignment profits – more details can be found on the CRA website here:

https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/gi-120/assignment-a-purchase-sale-agreement-a-new-house-condominium-unit.html

If you are a podcast listener, the true condos podcast is also a great resource.

https://truecondos.com/cra-cracking-down-on-assignments/

heres one for your comment, purchase pre construction from builder beginning of 2021, to be finished end of 2021, (semi detached) here we are end of 2022, both units are now ready. Had one assigned but because builder didnt accept within certain time frame(they also had a 90 day clause wherein we couldnt assign prior to 90 less firm closing date (WHICH MOVED 4 TIMES). Anyrate now we have a new assinor but the builder says we are in default from the first one and wants 50k to do the assignment (the agreement lists the possibility of assigning for 12k) Also this deal would include us loosing our whole deposit and paying the 12k(plus fees) would be in addition too the 130k we are already loosing. The second property we are trying to close but interest rates are riducous, together with closing costs(currently mortgage company is asking that my wife be added to that one, afraid to even ask this builder. Any advice on how to deal with this asshole greedy builder? We are simply asking for assignment as per contract and a small extension for the new buyer(week or two) Appreciate any advice. Thank you

Dealing with builders/developers can be extremely painful, much worse than resale transactions in our experience. Their contracts are written to protect THEM. Unfortunately all I can say is follow the advice of your lawyer.

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Assignment of a Purchase and Sale Agreement for a New House or Condominium Unit

From: Canada Revenue Agency

Effective May 7, 2022, all assignment sales in respect of newly constructed or substantially renovated residential housing are taxable for GST/HST purposes. This publication will be updated to reflect this legislative change. For more information about the legislative amendment, refer to  GST/HST Notice 323, Proposed GST/HST Treatment of Assignment Sales .

GST/HST Info Sheet GI-120 July 2011

This info sheet explains how the GST/HST applies to the assignment of a purchase and sale agreement for the construction and sale of a new house.

The term "new house" used in this info sheet refers to a newly constructed or substantially renovated house or condominium unit. A house that has been substantially renovated is generally given the same treatment under the GST/HST as a newly constructed house. Extensive modifications must be made to a previously occupied house in order to meet the definition of a "substantial renovation" for GST/HST purposes. For a full explanation of the factors to consider in deciding if a substantial renovation has taken place, refer to GST/HST Technical Information Bulletin B-092, Substantial Renovations and the GST/HST New Housing Rebate .

In this publication, a house includes a single unit house, a semi detached house, a duplex, a rowhouse unit and a residential condominium unit (condo unit), but does not include a mobile home or floating home.

Where a person enters into a purchase and sale agreement with a builder for the construction and sale of a new house, the person may be entitled to assign their rights and obligations under the agreement to another person (an assignee). Generally, the result of the assignment is that the purchase and sale agreement is then between the builder and the assignee.

This publication addresses the situation where

• a purchaser (referred to as the first purchaser) enters into a purchase and sale agreement with a builder (Builder A) for the construction and sale of a new house, and
• the first purchaser subsequently assigns the agreement to an assignee (referred to as the assignee purchaser) before Builder A transfers possession or ownership of the house to the first purchaser and before any individual has occupied the house as a place of residence or lodging.

Generally, upon entering into an agreement for the construction and sale of a new house, the first purchaser is considered to have acquired an interest in the house. For GST/HST purposes, the assignment of the agreement to the assignee purchaser is normally considered to be a sale of the first purchaser's interest in the new house. The sale of an interest in a new house is generally taxable where the person selling the interest is a builder of the house.

For GST/HST purposes, the term "builder" is specifically defined and is not limited to a person who physically constructs a house. There are several instances in which an individual or other person is a builder for GST/HST purposes. For more information on persons who are included in the definition of "builder", refer to GST/HST Memorandum 19.2, Residential Real Property .

This info sheet addresses only whether a person is a builder as described in the following paragraph.

Primary purpose: selling the house or an interest in the house or leasing the house in certain circumstances

A builder includes a person who acquires an interest in a new house before it has been occupied by an individual as a place of residence or lodging for the primary purpose of selling the house or an interest in the house or leasing the house, other than to an individual who is acquiring the house otherwise than in the course of a business or adventure or concern in the nature of trade. When that person is an individual, the individual must acquire the interest in the course of a business or an adventure or concern in the nature of trade in order to be a builder described by this paragraph.

Even if a person is not a builder as described in the preceding paragraph, the person may be a builder based on one of the other definitions of the term as described in GST/HST Memorandum 19.2.

Assignment of a purchase and sale agreement by a person other than an individual

Where a person other than an individual (e.g., a corporation) is a builder as described in the section "Primary purpose: selling the house or an interest in the house or leasing the house in certain circumstances" and the person assigns a purchase and sale agreement for a new house, the person's sale of the interest in the house is subject to the GST/HST whether the sale takes place in the course of a business, an adventure or concern in the nature of trade, or otherwise.

Assignment of a purchase and sale agreement by an individual

If an individual enters into a purchase and sale agreement for one of the primary purposes described in the section "Primary purpose: selling the house or an interest in the house or leasing the house in certain circumstances", the sale of the interest in the house (or the house itself) is normally considered to be made in the course of an adventure or concern in the nature of trade or, depending on all of the surrounding circumstances, in the course of a business. If it is established that an individual is selling an interest in a new house in the course of a business or adventure or concern in the nature of trade, the individual is considered to have entered into the purchase and sale agreement for the primary purpose of selling the house or an interest in the house.

Whether the activity of acquiring an interest in a house, as a result of entering into a purchase and sale agreement, is done in the course of a business or an adventure or concern in the nature of trade is a question of fact. For more information on how to determine whether an activity is done in the course of a business or an adventure or concern in the nature of trade, refer to Appendix C of GST/HST Memorandum 19.5, Land and Associated Real Property .

Factors in determining the primary purpose

All of the relevant factors surrounding entering into a purchase and sale agreement should be considered in determining the primary purpose for a person's acquisition of an interest in a new house.

The following factors may indicate that, for GST/HST purposes, a person entered into a purchase and sale agreement for the primary purpose of selling an interest in the new house or the house itself. The factors are not listed in any particular order and there is no intent to weigh one more heavily than another.

• The person offers to sell their interest in the house or takes other actions to attract buyers before, or while, the house is under construction.
• The person finances the purchase of the house by a short-term mortgage, or an open mortgage that can be paid off without penalty, rather than by a long-term or closed mortgage.
• Financing of the house is beyond the person's means and that person is relying on the increased value and saleability of the house, or an interest in the house, in a rising housing market.
• The person is an individual and their stated intention to occupy the house as a place of residence is not supported by the circumstances of the case. For example, an individual has a family of four and enters into a purchase and sale agreement for a one-bedroom condo unit where they are not contemplating any changes in family circumstances.
• The person's pattern of activity is such that their occupancy of the house does not have the qualities or characteristics of being permanent. For example, the person purchases more than one house at or around the same time. This factor may be given extra weight where the person has previously entered into a purchase and sale agreement for purposes of selling the house or an interest in the house. There are no outward indicators to support a contrary primary intention (i.e., an intention contrary to an intention of resale). For example, an individual is selling a condo unit, one or more of the above factors are present, there are no physical actions or evidence that the individual's primary intention was to live in the condo unit, use it as a vacation home, or rent it to another individual for use as their place of residence, and no evidence that the sale of the condo unit was triggered by some unforeseen event.

In order for the acquisition of an interest in a new house to be for one of the primary purposes described in the section "Primary purpose: selling the house or an interest in the house or leasing the house in certain circumstances", the intention to sell the house or an interest in it, or to lease the house in the manner described in that section, must have existed at the time of acquiring the interest. Nonetheless, the intention at the time of acquisition may be demonstrated over a period of time.

If an individual acquired an interest in the house for the primary purpose of using it as a place of residence, the person is not considered to be a builder of the type described in this info sheet even if, at a later point in time, the person sells the house or an interest in the house. However, the person may still be a builder if the person meets one of the other definitions of that term as described in GST/HST Memorandum 19.2.

The following examples illustrate when a person may or may not be a builder of a new house.

Sarah, Francine, and Angela are roommates renting a three-bedroom house. They entered into a purchase and sale agreement with a builder in January 2010 for a one-bedroom condo unit in a new condominium complex that was to be built. The purchase price under the agreement was $300,000 and the closing date was July 31, 2013.

In March 2011, the fair market value of the new condo unit had increased by 50%. They entertained several offers for the sale of their interest in the condo unit before assigning it to James. No individual had occupied the condo unit as a place of residence or lodging when they sold their interest in the unit. They split the proceeds, which they each used as a down payment to buy their own homes.

As it would not be practical for the three individuals to live in the condo unit together, they considered several offers for their interest in the unit, and there are no indicators to support a contrary intention, Sarah, Francine and Angela are considered to have acquired their interest in the condo unit for the primary purpose of selling the unit or an interest in it. The sale is considered to be made in the course of a business or adventure or concern in the nature of trade. Accordingly, Sarah, Francine, and Angela are all builders of the condo unit for GST/HST purposes. As they are builders of the unit and the sale of their interest in the unit is not exempt, GST/HST applies to the sale of each of their interests.

Pascal and Chantal own a four-bedroom house where they live with their three children. This is the only home they have ever owned and lived in. They have never purchased any other real property.

In June 2009, they entered into a purchase and sale agreement with a builder for a 1-bedroom condo unit in a new high-rise condominium complex that was to be built. The purchase price under the agreement was $275,000 and the closing date was June 30, 2010. In May 2010, they sold their interest in the new condo unit for $400,000 before it had been occupied by any individual as a place of residence or lodging. They used the sale proceeds to build an addition to their current home.

Although Pascal and Chantal have no history of buying and selling real property, it would not be practical for their family of five to occupy the condo unit as their place of residence. Lacking evidence to support a contrary intention, their primary purpose in acquiring the interest in the condo unit is considered to be for the purpose of selling the condo unit or an interest in it in the course of a business or an adventure or concern in the nature of trade. Accordingly, they are builders of the new condo unit for GST/HST purposes. As the sale of their interest in the unit is not exempt, GST/HST applies to the sale of their interest.

Eric and Gina owned a 3-bedroom house where they lived with their 3 children. They entered into a purchase and sale agreement with a builder in October 2010 to purchase a new 4-bedroom house that was to be built. They intended to use the new house as their primary place of residence as it was located much closer to the children's school and to Eric and Gina's workplaces and had more space. The closing date is July 31, 2011.

Eric and Gina sold their current home in January 2011 and moved into a rented home they planned to live in until their new house was ready. However, in June 2011, Gina's mother became ill and moved in with them as she was no longer able to live on her own.

Eric and Gina decided that the new house would no longer be large enough and that they would now need a house with a granny suite. They sold their interest in the new 4-bedroom house so that they could buy a bigger home that would suit their changed needs.

Eric and Gina's sale of their original home and temporary move to a rented house during the construction of the new home and their choice to purchase a home located closer to school and work support that their intention in acquiring the interest in the new house was to use the house as their primary place of residence. Given this, and the fact that their only reason for selling the interest was due to a change in personal circumstance (i.e., the new house would no longer accommodate their family's needs), they are not considered to have acquired the interest in the house for the primary purpose of selling it. Accordingly, they are not builders of the new house for GST/HST purposes and the sale of their interest in the house is exempt.

Cindy entered into a purchase and sale agreement with a builder in November 2010 for a new house that was to be built. She intended to use the house as her primary place of residence. Her new home would be located within walking distance from her workplace and would be closer to her family than the apartment she is currently renting. The closing date for the purchase is September 30, 2011.

In July 2011, Cindy's employer announced that it was relocating to another city located three hours away. To keep her current job, Cindy had to move to that city. She sold her interest in the house to John.

Since Cindy had intended to use the house as her primary place of residence and her only reason for selling her interest in the house was due to work relocation, she did not acquire the interest in the house for the primary purpose of selling it. Therefore she is not a builder of the house for GST/HST purposes and the sale of her interest in the house is exempt.

Assignment fees

The consideration charged for the sale of an interest in a house generally includes amounts that a person paid to a builder (e.g., a deposit) and that the person wants to recover when assigning their interest in the house. The sale price for the interest may also include a profit, i.e., an amount over and above amounts the person had paid to the builder. If a person's sale of their interest to an assignee purchaser is taxable, the total amount payable for the sale of the interest is subject to GST/HST, including any amount the person paid as a deposit to the builder, whether or not such an amount is separately identified.

A first purchaser enters into a purchase and sale agreement for a new house with a builder (Builder A) and pays a deposit of $10,000 at that time. The first purchaser does not make any further payments to Builder A. The first purchaser subsequently assigns the agreement to an assignee purchaser for $15,000. If the sale of the interest in the house from the first purchaser to the assignee purchaser is subject to GST/HST, tax applies to the full $15,000. This is the case even if the assignment agreement identifies that the $10,000 is a recovery of the deposit that the first purchaser paid to Builder A.

The assignment of a purchase and sale agreement for a new house may be subject to the approval of the builder with whom the first purchaser originally entered into the agreement to construct and sell the new house. The agreement may list conditions related to the first purchaser's right to assign the agreement to an assignee purchaser and, in many cases, the builder charges a fee to the first purchaser for the assignment of the agreement to another person.

The fee charged by the builder in such circumstances is generally subject to the GST/HST.

Eligibility for a GST/HST new housing rebate and provincial new housing rebate (where applicable) where a purchase and sale agreement is assigned

The GST/HST new housing rebate, and where applicable, a provincial new housing rebate, may be available for a new house purchased from a builder and for owner-built new housing. Guide RC4028, GST/HST New Housing Rebate , sets out the eligibility criteria for both types of GST/HST new housing rebates and provincial new housing rebates.

If the first purchaser (the assignor) makes a taxable sale of an interest in a house, i.e., the first purchaser is a builder and assigns the purchase and sale agreement to an assignee purchaser, the first purchaser would not be eligible for either a GST/HST new housing rebate or provincial new housing rebate as they did not acquire the house for use as their primary place of residence. Even if the sale of the interest in the house by the first purchaser is not subject to GST/HST (i.e., in situations where the first purchaser is not a builder of the house), the first purchaser would generally not be eligible for either a GST/HST new housing rebate or a provincial new housing rebate as the conditions for claiming the rebates are not met (e.g., ownership of the house would not transfer to the first purchaser, but to the assignee purchaser).

The assignee purchaser, if an individual, may be eligible for a GST/HST new housing rebate, and where applicable a provincial new housing rebate, where the assignee purchaser receives an assignment of a purchase and sale agreement for a new house. The assignee purchaser would have to meet the eligibility conditions for the rebates as set out in Guide RC4028.

Where a purchase and sale agreement for a new house is assigned, there may be two builders of the house – the original builder (Builder A) and the first purchaser (the assignor). If that is the case, an assignee purchaser would generally have to pay the GST/HST to Builder A for the purchase of the new house and to the first purchaser for the purchase of the interest in the new house.

Claiming a GST/HST new housing rebate when there is more than one builder

In some cases, the builder of a new house pays or credits the amount of the GST/HST new housing rebate, and where applicable, a provincial new housing rebate, to the purchaser of the house. In this case, the builder credits the amount of the new housing rebates to the purchaser by reducing the total amount payable for the purchase of the house by the amount of the expected rebates.

Where this happens, the purchaser and the builder have to sign Form GST190, GST/HST New Housing Rebate Application for Houses Purchased from a Builder , and the builder has to send the form to the Canada Revenue Agency (CRA). As the purchaser receives the amount of the rebate from the builder, the builder may claim the amount as a credit against its net tax when it files its GST/HST return.

Only one new housing rebate application can be made for each new house. Therefore, an assignee purchaser cannot submit a rebate application through a builder (Builder A) for the tax paid to Builder A on the purchase of the house and submit a second rebate application through the first purchaser (the assignor), or directly to the CRA, for the tax paid to the first purchaser on the purchase of the interest in the house.

In such cases, the assignee purchaser may want to file their new housing rebate application directly with the CRA rather than through Builder A. In this way, the assignee purchaser can include in the new housing rebate application the tax paid to Builder A and the tax paid to the assignor in determining the amount of their GST/HST new housing rebate and, where applicable, a provincial new housing rebate.

This info sheet does not replace the law found in the Excise Tax Act (the Act) and its regulations. It is provided for your reference. As it may not completely address your particular operation, you may wish to refer to the Act or appropriate regulation, or contact any CRA GST/HST rulings office for additional information. A ruling should be requested for certainty in respect of any particular GST/HST matter. Pamphlet RC4405, GST/HST Rulings – Experts in GST/HST Legislation explains how to obtain a ruling and lists the GST/HST rulings offices. If you wish to make a technical enquiry on the GST/HST by telephone, please call 1-800-959-8287.

Reference in this publication is made to supplies that are subject to the GST or the HST. The HST applies in the participating provinces at the following rates: 13% in Ontario, New Brunswick and Newfoundland and Labrador, 15% in Nova Scotia, and 12% in British Columbia. The GST applies in the rest of Canada at the rate of 5%. If you are uncertain as to whether a supply is made in a participating province, you may refer to GST/HST Technical Information Bulletin B-103, Harmonized Sales Tax – Place of Supply Rules for Determining Whether a Supply is Made in a Province .

If you are located in Quebec and wish to make a technical enquiry or request a ruling related to the GST/HST, please contact Revenu Québec at 1-800-567-4692. You may also visit the Revenu Québec Web site to obtain general information.

All technical publications related to GST/HST are available on the CRA Web site at www.cra.gc.ca/gsthsttech .

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Assignments of Agreement of Purchase and Sale – An Overview

What is an assignment.

The assignment of an agreement of purchase and sale is a legal transaction whereby a party to a contract transfers their rights and obligations in that agreement and associated property, to another party. It is commonly used in Ontario real estate transactions as a means of selling a property before the original purchase agreement is completed. Assignments are often pursued by buyers or investors who wish to purchase a property for a lower price than the original purchase price or who seek to benefit from a changing market or financial circumstances. In an assignment, the original purchaser (the assignor) sells their rights and benefits under the agreement to a third party (the assignee) for a negotiated price.

Benefits, Disadvantages, and Uses of an Assignment Transaction

There are several benefits to pursuing an assignment. For the assignor, it may provide an opportunity to sell the property at a profit without having to close on the purchase themselves. It may also allow them to avoid closing costs and other fees associated with the purchase. For the assignee, an assignment can offer an opportunity to purchase a property at a lower price than the original purchase price, particularly if the market has changed or the original purchaser is in financial distress. However, there are also potential drawbacks to assignments, such as uncertainty regarding the closing date, tax implications, higher than anticipated closing costs and the potential for disputes between parties.

Assignment Process

The assignment process typically involves several steps. First, the assignor must find a willing assignee who is willing to purchase their interest in the property. They may need to advertise the property and assignment (provided this is permitted by the original vendor in a pre-construction transaction) and negotiate a price with the assignee. Once an assignee is found, the parties must draft an assignment agreement that outlines the terms of the assignment, including the purchase price, closing date, obligations of each party and other relevant details. The assignment agreement must be signed by both the assignor and assignee and may need to be registered with the relevant authorities, such as the Land Registry Office. Finally, the assignee assumes the rights and benefits of the original agreement and is responsible for completing the purchase on the closing date. Throughout the assignment process, it’s important to seek legal advice and follow the requirements outlined in the original purchase agreement.

Fees and Default

Assignment agreements generally include an ‘Assignment Fee’ payable by the assignee to the assignor in exchange for the right to acquire the property. It is important to determine when this fee is payable. If any funds are to be released to the assignor prior to the completion of the original transaction, it must be specified. Otherwise, the default is that they are to be held in trust by the assignor’s solicitor, until the completion of the original agreement of purchase and sale.

If a seller defaults on the original agreement (i.e. fails to close the transactions), the assignment becomes null and void. The funds are returned to the assignee, and the assignor is not liable for any expenses or losses incurred therefrom by the assignee. The assignor can commence legal proceedings against the seller for failing to close the transaction, however, the assignee has little to no such legal remedy available, even in the face of changing market conditions.

Other Considerations

On a final note, the tax implications of assignments can be complex, and it’s important for buyers and sellers to seek legal advice before pursuing an assignment. Depending on the circumstances, both the assignor and assignee may be subject to various taxes, such as capital gains tax, HST, or land transfer tax. For example, while the resale of a residential property is naturally not subject to HST and, accordingly, there is no HST payable on the assignment fee, extra steps must be taken to ensure the same result for new-build properties; the assignment agreement must include a provision stating that part of the consideration is attributable to the reimbursement of a deposit paid by the assignee to the builder. As with the Land Transfer Tax, it is payable by the assignment after the completion date of the original transaction, on the aggregate purchase price (including the assignment fee).

Assignment of agreements of purchase and sale are a common tool used in Ontario real estate transactions to transfer property ownership rights and benefits. They can offer benefits such as flexibility and financial gain but also carry risks and challenges. Understanding the legal, financial, and practical implications of assignments is crucial for anyone considering pursuing this approach.

If you have any questions about assignments of agreement of purchase and sale or real estate law generally, please contact  Jonathan at 289-220-3229 or  [email protected]

• Jonathan Dippolito
• 289-220-3229
• (905) 668-9737
• [email protected]

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• Legal Issues

Assigning an Agreement of Purchase and Sale

Martin Rumack | Jul 26, 2016 | 0 comments

At its essence, an assignment of an Agreement of Purchase and Sale – informally known as “flipping a home” – is a simple concept: A buyer of a new home allows someone else to take over the purchase contract, which allows that person to buy the home.

More specifically, the original buyer enters into a formal Agreement of Purchase and Sale with a builder, and then allows another person – who we will call the “new buyer” – to step into his or her shoes through what is legally known as an “assignment” of that original agreement or offer to buy. The new buyer pays the original buyer a higher price than what was set out in that original agreement; the difference is the original buyer’s profit. All of this takes place after the original buyer has agreed to buy from the builder, but before the deal closes; the original buyer never takes title to the property.

This arises primarily with homes: For newly built homes with typically long closing dates (often 18 months or more), an assignment is particularly attractive in situations where the builder has already sold all of the units in the development early on, but where there is still demand for soon-to-be-completed homes and new condominium units in the development.

The assignment of a new condominium unit is also interesting for similar reasons, although the time frame may be significantly longer depending on when the assignment occurs. This puts the original buyer in position to make a profit by inflating the new price well above what he or she agreed to pay the builder in the first place.

What is the benefit to the new buyer? There can be several:

• The new buyer may be able to buy into a desirable neighbourhood at a time when there are no more units available to be purchased directly from the builder;
• Even taking the original buyer’s profit into account, the assignment may give the new buyer a price advantage over other properties that are currently on the market; and
• Depending on the timing of the assignment, the new buyer may be positioned to choose finishes and make minor changes to the yet-to-be-built home.
• Whatever the respective motivations of the original and new buyer, the assignment of an Agreement of Purchase and Sale has many specific features – and just as many potential pitfalls.

When can an agreement of purchase and sale be assigned?

Unlike the standard Ontario Real Estate Association (OREA) agreements, many builders’ own (customized) Agreements of Purchase and Sale contain a clause that generally prohibits the assignment of the contract outright – or else allows it only with strict conditions and in exchange for a significant fee payable to the builder.

In fact, the vast majority of new home or condominium-purchase agreements do not allow the original buyer to assign the contract to someone else and stipulate that any attempt by the buyer to do so, or to list the home for sale on the MLS system or otherwise, or else list the property for rent, will put the original buyer in breach of the agreement. This triggers the builder’s right, with notice, to terminate the original agreement, keep the original buyer’s deposit and seek additional damages from him or her. (And in most cases, the original buyer’s agreement is “dead”; he or she cannot go back and try to complete the transaction as if no assignment had taken place).

All of this means that anyone who has agreed to purchase a home from a builder should give careful consideration to, and should seek legal advice prior to signing the agreement, or in the case of condominium units during the 10-day cooling-off period in order to determine whether it’s possible to assign the agreement in the first place.

This in turn involves a careful review of the clauses in that agreement.

Typical (and not-so-typical) provisions

As a practical matter, there are as many variations in these types of provisions as there are builders.

Many Agreements of Purchase and Sale will include a largely standard “no assignment” clause, which disentitles the original buyer from “directly or indirectly” taking any steps to “lease, list for sale, advertise for sale, assign, convey, sell, transfer or otherwise dispose of” the property or any interest in it.

A potential exception – and this is important – arises if the builder gives prior written consent, although in the more draconian version of these kinds of contract, that consent may be “unreasonably and arbitrarily withheld” by the builder, essentially on its whim. In other words, the buyer is not allowed to deal with the property, unless the builder pre-approves it in writing, but in many cases the builder has no obligation to give that approval and may withhold it for any reason whatsoever, including unreasonable and arbitrary ones.

(With that said, the “no assignment” clause in some agreements will allow for express exceptions or situations where the builder will not withhold consent, for example: a) assignments made to a member of the original buyer’s immediate family; or b) where the builder has determined that a sufficient and satisfactory percentage of the available units have already been sold).

The bottom line is that the basic clause in an Agreement of Purchase and Sale may or may not allow for the assignment of the agreement to a new buyer, and if it is allowed, it will be subject to specified conditions such as obtaining the builder’s written consent. Most agreements will embellish this basic clause by adding further written stipulations such as:

• Having both the original buyer and the new buyer sign an Assignment Agreement that has been drafted by the builder;
• Mandating the original buyer will not assign the agreement until the builder has managed to sell a certain percentage of the units in the overall development (for example, 85 or 90 per cent), and even then it must be with the builder’s written consent as usual;
• Requiring the original buyer to pay a fee to the builder of (for example) $5,000 plus taxes as part of obtaining the builder’s consent to the assignment;
• Requiring the original buyer to pay another fee plus taxes to the builder’s lawyer (ostensibly as a sort of “legal processing fee”);
• Getting the pre-approval of any lending institution or mortgagee that is providing funding to the builder for construction or otherwise;
• Assuming the builder agrees to the assignment in the first place, prohibiting any further assignments of the offer by the new buyer to any subsequent party;
• Confirming that the breach of any of the original buyer’s promises in relation to how and when an assignment can occur will be considered a breach of the whole agreement (and one that cannot be remedied); and
• Requiring the original buyer to confirm in writing that the property is not being purchased for short-term speculative purposes.

Note that even if the Agreement of Purchase and Sale does not expressly allow or provide for it in writing, some builders will permit an original buyer to make an assignment nonetheless. This is because it is always in the builder’s discretion to give up (usually for a fee) its right to technically insist on the purchase going ahead with the original buyer.

Getting the builder’s consent

It’s important to remember that, initially, the original buyer and the builder had a valid legal contract in place that obliged the buyer to purchase a home or condominium unit from the builder. That original buyer, for whatever reason – whether it’s a change of circumstances (such as a change in a marital situation, job transfer to another city, province or country; birth of children resulting in a home/condominium unit being too small for the buyer), cold feet, or simply the desire to make a profit – has subsequently decided to “sell” that right to buy to the new buyer.

To protect the builder, the assignment will contain clauses that are designed to safeguard the builder’s rights. The most important one is that, as discussed, the builder must give its written consent to the assignment. This will often involve specific builder-imposed requirements, fees and forms that must be completed.

Once consent has been obtained, there may be additional restrictions on the manner in which the original owner can market the property. For example, some builders will insist that the property is not to be listed on the MLS system (where it may be competing with the builder’s own listings for still-unsold homes and units in the same development); if the original owner does so nonetheless, it will be tantamount to a breach of the Agreement of Purchase and Sale, which could entitle the builder to damages, or rescission of the Agreement of the Purchase and Sale while retaining the deposits paid, as well as the monies paid for extras.

However, aside from any marketing/advertising restrictions that may be imposed, the original buyer must clearly indicate in any listing that it is an assignment of an Agreement of Purchase and Sale, not merely an ostensible sale from the original buyer.

Continuing liability after assignment

One key provision in the Agreement of Purchase and Sale – and one that is easy to overlook – may significantly impact whether an original buyer will want to assign his or her agreement at all.

Even though the original buyer has essentially transferred his or her right to buy the property to the new buyer, the original buyer is not fully off the hook. Rather, under the terms of the assignment document, the original buyer can remain liable to go through with the contract if the new buyer does not complete the transaction with the builder.

This written obligation appears in the original buyer’s Agreement of Purchase and Sale, and is couched in phrases that give the buyer continuing liability for the “covenants, agreements and obligations” contained the original agreement. But the net effect is that the original buyer remains fully liable should the agreement between the builder and the new buyer collapse. The agreement may also stipulate that the assignee, meaning the person receiving the benefit of the assignment (the new buyer) must sign an “assumption covenant”, which creates a binding contract between the new buyer and the builder.

(Incidentally, in contrast some builder’s agreements quite conveniently allow the builder itself to freely assign the agreement to any other builder registered with Tarion, which completely releases the builder from its obligations.)

The original buyer’s continuing liability under the Assignment Agreement is a major drawback in these types of arrangements. The original buyer always has to balance the risks and rewards inherent in this scenario.

Documenting the transaction

Assuming that the assignment of an offer is even permitted by the builder, then (as with all contracts) it must be documented to reflect and protect the legal right of the parties.

The technical aspects of an assignment require more than simply taking the original buyer’s Agreement of Purchase and Sale with the builder, scratching out his or her name, and replacing it with the new buyer. (Although, in some cases people do try to “squeeze in” assignment-of-offer terminology into a new Agreement of Purchase and Sale made out in the new buyer’s name – but this is definitely NOT recommended).

Rather, a properly documented transaction makes reference to the Agreement of Purchase and Sale between the original buyer and the builder, but adds a separate document called an “Assignment of Agreement of Purchase and Sale.”

OREA provides a standard form that can be used, although in many cases those builders who permit assignments will insist that the original buyer and the new buyer use the builder’s customized assignment forms, rather than the OREA standardized version.

The specifics of the deal – who pays what?

1) recouping the original buyer’s costs .

At the point where the assignment is being negotiated, the original buyer has typically paid a deposit to the builder, may have pre-paid for certain upgrades and extras and has a large balance owing. This means that in the course of striking a deal to achieve the assignment, the original buyer should give some serious thought to the various costs, fees, pre-paid deposits and tax repercussions of the deal, and how these should be reflected in the price that he or she will want the new buyer to pay under the Assignment Agreement. The timing of the payment(s) will also be a consideration.

For both original buyer and new buyer who are considering an assignment arrangement, here are some of the questions to ask:

• Does the price to be paid by the new buyer include any fee that the builder is charging in exchange for the original buyer’s right to assign the Agreement of Purchase and Sale?
• Does it include any deposits paid by the original buyer to the builder, after the agreement was signed? Does it include any interest that has been earned on those deposits?
• Does it clearly state that the new buyer will take over the entire contract, including the adjustments that are to be paid to the builder on closing? Or are those adjustments to be split between new and original buyer?
• Does the price include money paid by the original buyer for extras and upgrades?
• Are there any additional deposits that are still owing to the builder, under the original agreement?
• Who is responsible to pay the additional fee (the builder-imposed fee) in exchange for the builder giving consent? Usually this will be the original buyer, but the parties may negotiate otherwise.
• Does the new buyer agree to take on responsibility under the original agreement for making additional deposit payments until the final closing date (which may still be months or even years away)?
• Does the new buyer have a full understanding of the amount of all the adjustments that must be paid to the builder pursuant to the original agreement?
• If the original buyer has negotiated any special financial incentives into the Agreement of Purchase and Sale that has been reached with the builder, have these been addressed in terms of whether the new buyer will receive the benefit of them?

In any case, the final purchase price payable from the new buyer to the original buyer will typically be made up of:

• The outstanding balance owed to the builder by the original buyer, that will now be payable by the new buyer;
• The total deposits already paid by the original buyer to the builder;
• The total payments already paid by the original buyer to the builder for any upgrades and extras and
• The profit that the original buyer stands to make in the deal.

2) Deposits and interest on deposits

The treatment of deposits and the interest they may have earned merits a brief separate discussion.

Under virtually all Agreements of Purchase and Sale with builders, the original buyer will be required to pay a series of deposits to the builder, starting with the initial deposit paid when the agreement is signed and on a set payment schedule thereafter. The total of those deposits can be significant.

Once the agreement has been assigned to the new buyer, how those deposits are treated will form part of the negotiations. Typically, the original buyer will get those deposits back from the new buyer as part of the overall purchase price of the assignment transaction; he or she will usually receive them at the time the assignment agreement is entered into and the builder has consented to the assignment.

The potential problem with an Assignment Agreement is financing. The original buyer will want his deposit funds returned before closing, but if the new buyer does not have funds on-hand, he or she may find that financing is very difficult to obtain because banks do not advance mortgage funds at the time an Assignment Agreement is entered into; rather, the financial institution will provide funds only on final closing. This can serve as a roadblock to the new buyer’s ability to repay the deposits and potentially to embark on the transaction at all.

The question of who is entitled to the interest on any deposits pre-paid to the builder is also a topic for the original and new buyers to discuss. In many cases, the interest will be only a small amount (if any) and may be credited to the new buyer, rather than the original one. However, in cases where the original buyer has paid significant deposits over time, and where larger interest amounts have accrued, the parties may want to negotiate a different outcome.

3) Land Transfer Tax

When negotiating the deal, the original buyer and the new buyer must discuss the structure of the deal between them, to ascertain the exact selling price on which the Land Transfer Tax (and any Municipal Land Transfer Tax) should be payable; whether it is the original buyer’s price with the builder (net of HST and the HST New Housing Rebate, which is discussed below), or whether it’s the newly inflated price being paid by the new buyer under the assignment.

Generally speaking, it will be the latter, although in some assignment arrangements the parties have attempted to structure it so that they pay the Land Transfer Tax based on the lower initial price asked by the builder, while taking the position that difference between that and the increased price is merely the “fee” paid to acquire the original Agreement of Purchase and Sale entered into with the builder (thus avoiding having the tax calculated on the higher sale price).

In any case, once the Assignment Agreement is reached, it will be the new buyer who is obliged to pay Land Transfer Tax and any Municipal Land Transfer Tax on closing, not the original buyer.

4) HST and the HST New Housing Rebate 

The issue of how HST is to be treated in an assignment scenario is crucial, but is fraught with pitfalls.

The first issue is how HST on the transaction should be calculated. Because the new buyer’s price will inevitably be higher than the one the original buyer agreed to pay to the builder, there is an important issue as to whether the difference – meaning the original buyer’s profit – should be subject to HST (and if so, who will pay it in the transaction).

This determination hinges on whether the assignment is a “taxable supply” under the tax legislation and on whether the original buyer can be considered or deemed a so-called “builder” of the home for HST purposes. This, in turn, involves a number of complex legal concepts and factual findings – including the intentions of the original buyer as to whether the home is going to be a primary residence.

Next, there is the issue of the HST New Housing Rebate. In a typical scenario, the original buyer may have been entitled to the HST New Housing Rebate, based on meeting numerous qualifying requirements and stipulations. However, once he or she assigns the agreement, that eligibility is obviously lost because he or she is no longer taking title to the home on closing. Only one HST New Housing Rebate application per dwelling can be filed.

But once there has been an assignment, it is the new buyer’s circumstances that will determine whether the opportunity for an HST Rebate exists. He or she will have to meet the stipulated legislated requirements and may either apply directly to the Canada Revenue Agency (CRA), or arrange with the builder to have the rebate amount credited right at closing.

Note that the new buyer may want to take steps to protect his or her position in this regard. For example, when negotiating the Assignment Agreement, the new buyer should make the agreement conditional on receiving written confirmation from the builder that any HST New Housing Rebate will be credited to him or her on closing, assuming that the qualifying requirements are otherwise met. Otherwise, if this commitment is not in writing, the builder, being entitled to exercise its discretion on whether to credit the buyer with the rebate amount on final closing, can withhold it and force the new buyer to apply to CRA directly after closing. Obtaining this commitment in writing is especially important, given the likely lack of prior dealing between the builder and the new buyer.

Other things to consider:

1) who is responsible for the documentation.

In addition to ascertaining whether the original buyer or the new buyer will pay for certain items, it is also important to determine – in advance – which of them will take care of arranging the documentation. The questions to ask:

• Who will prepare the documents needed to achieve the assignment? And who will bear the cost?
• Will the builder’s lawyer prepare the builder’s needed consent to the assignment?
• Since the new buyer cannot renegotiate any of the provisions of the agreement that the original buyer entered into with the builder, are any of those terms objectionable, and if so, how will they be resolved and who will bear the cost?

As discussed, the Assignment Agreement will be conditional on the builder giving its consent. From the new buyer’s standpoint, it should also be made conditional on him or her giving close review to the original Agreement of Purchase and Sale (as signed by the original buyer), the Assignment Agreement, as well as any amendments, waivers, notices (and for condominium purchases, the Disclosure Statement). If for no other reason, it will give the new buyer a chance to consider the specific list of adjustments for which he or she will be responsible to pay on closing. Needless to say, this review should be undertaken with the guidance of an experienced lawyer.

Once the terms of the assignment are settled and the builder’s written consent has been obtained, the Assignment Agreement must be drafted and is attached to the original Agreement of Purchase and Sale that the original buyer entered into with the builder.

Incidentally, the builder may have certain requirements that must be incorporated into the process and accommodated as well. For example, the builder will require the new buyer to provide I.D. and will need confirmation that he or she has the financing required to close in place.

2) Tarion registration 

When negotiating the assignment arrangement, the original and new buyers must be aware of the impact of the New Home Warranty Program as administered by Tarion, particularly if the home being “flipped” is a condominium unit.

3) Financing

There may be financial issues for the new buyer to work out before the deal can go ahead.

As usual, the transaction may be conditional on financing, which will be arranged on the higher price that the new buyer has agreed to pay. However, since some mortgage brokers may be unfamiliar with financing an assignment transaction, getting approval for the new buyer’s purchase may be challenging. This is something that needs to be investigated long before the original buyer and the new buyer start their negotiations in earnest.

4) Commission

A final issue to be negotiated is who is paying the commission with respect to the Assignment Agreement transaction. This includes consideration of the specific commission rate, together with the details on how and when the commission gets paid.

While an Assignment Agreement can be beneficial to both the original and the new buyer – and even to the builder (in extra fees) there are many issues to be addressed and negotiated.

As an agent, make sure your client obtains legal advice prior to finalizing any agreement to assign the original Agreement of Purchase and Sale.

Be careful… be aware… and think!

• Agreement of Purchase and Sale

Toronto lawyer Martin Rumack’s practice areas include real estate law, corporate and commercial law, wills, estates, powers of attorney, family law and civil litigation. He is co-author of Legal Responsibilities of Real Estate Agents, 4th Edition, available at the TREB bookstore and at LexisNexis . Visit Martin Rumack’s website .

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Understanding the Assignment Clause Q & A: How It Works in Contracts and Agreements

• 24 July 2023
• 10 min read
• Assignee assignment clause Assignor Buying Property Buying Real Estate Contract modification Contractual transfer Knowing Your Property Q&A Real estate transaction
• Pre Constructions
• Understanding the Assignment C ...

In real estate transactions, an assignment clause is a contractual provision that allows one party (the “assignor”) to transfer their rights, interests, or obligations under the contract to a third party (the “assignee”). The assignment clause provides the framework for how such transfers can take place and outlines the conditions and terms for the assignment.

It’s important for both buyers and sellers in real estate transactions to be aware of the assignment clause’s existence in the purchase agreement. Properly understanding and complying with the assignment clause can facilitate a smooth and lawful transfer of rights or ownership in the property.

An assignment clause is a legal provision that can be found in contracts and agreements. It outlines the conditions under which one party (the assignor) can transfer their rights, duties, or obligations under the contract to another party (the assignee). Assignment clauses are commonly used in a variety of contracts, including leases, loans, and business agreements. Understanding this clause is important, as it can have significant implications for all parties involved.

An assignment clause, found in various contracts and agreements, delineates the conditions under which one party can transfer their rights, obligations, or benefits to another party. This clause is pivotal because it affects the dynamics of the contractual relationship.

Typically, an assignment clause stipulates whether assignment is allowed and, if so, whether it necessitates the consent of the non-assigning party. This consent can be absolute or subject to reasonable conditions. In some cases, contracts explicitly forbid assignment, while others differentiate between assigning rights (e.g., payment entitlements) and duties (e.g., service obligations).

Understanding the assignment clause is essential as it carries significant legal and financial implications. Assignors might still be held liable if the assignee fails to meet obligations, and financial obligations may shift hands. Parties should carefully review this clause to ensure compliance and consider seeking legal advice when necessary, as it can have a lasting impact on the contract’s execution and outcomes.

Questions & Answers (Q & A)

Q: What is an assignment clause in a contract?

A: An assignment clause is a contractual provision that allows one party to transfer or “assign” their rights, benefits, and obligations under the contract to a third party, known as the “assignee.” This provision outlines the conditions and terms under which such transfers can occur.

Q: How does an assignment clause work?

A: When one party to the contract wishes to transfer their rights and obligations to another party, they must review the assignment clause to determine if it permits such transfers. In many cases, the assignor (the party making the assignment) must obtain the written consent of the other party to the contract before proceeding. Once the assignment is completed and the assignee assumes the rights and duties, the assignor is usually released from further obligations under the original contract.

Q: What are the key elements of an assignment clause?

A: The key elements of an assignment clause include:

• Clearly defining the parties involved (assignor and assignee).
• Stating the conditions under which assignments are allowed.
• Specifying the procedures for seeking consent and providing notice.
• Outlining the liabilities and obligations of the assignee after the assignment.

Q1: What are the typical conditions for assignment?

A1: The conditions for assignment can vary based on the specific contract and the intentions of the parties involved. Some common conditions include obtaining the consent of the other party, providing written notice of the assignment, and ensuring the assignee has the necessary qualifications to fulfill the obligations under the contract.

Q2: What are the requirements for making an assignment under the clause?

A2: The specific requirements for making an assignment under the clause are typically outlined in the contract. They may include obtaining the consent of the other party, providing written notice of the assignment, or complying with any conditions set forth in the clause. It is essential for the assignor to adhere to these requirements to ensure a valid and enforceable assignment.

Q3: Why are assignment clauses included in contracts?

A3: Assignment clauses are included in contracts to provide flexibility and allow parties to transfer their rights and obligations under the contract when needed. They can be beneficial in situations where a party wants to sell or transfer their interests in a project, business, or real estate property without entirely terminating the contract.

Q4: Are there any restrictions on assignments?

A4: Yes, some contracts may include restrictions or prohibitions on assignments. These restrictions are typically in place to protect the interests of the parties involved. For example, contracts involving personal services or unique skills may restrict assignments to ensure the intended parties are directly involved.

Q5: What happens if an assignment is not allowed or improperly executed?

A5: If an assignment is not allowed or not executed according to the terms of the assignment clause, it could result in a breach of contract. The party attempting to make the assignment may face legal consequences, and the other party may seek damages or take legal action to enforce the original contract.

Q6: Can an assignment clause be modified or negotiated in a contract?

A6: Yes, like any other contractual provision, the assignment clause can be negotiated and modified between the parties before the contract is finalized. Parties may choose to include specific language or conditions regarding assignments to suit their particular needs and interests.

Q7: What happens to the original party after the assignment is made?

A7: Once the assignment is completed and the assignee assumes the rights and obligations, the original party (assignor) is generally released from any further duties under the contract. The assignee becomes the new party responsible for fulfilling the terms of the agreement.

Q8: Should legal advice be sought before making an assignment?

A8: Yes, seeking legal advice is highly recommended before making an assignment or responding to an assignment request. An attorney can review the contract, assess the implications of the assignment, and ensure that all legal requirements are met to avoid potential disputes or breaches of contract.

Q9: What is the significance of the assignment clause in a real estate contract, and why is it crucial for both buyers and sellers to be aware of its implications?

A9: The assignment clause in a real estate contract outlines whether the buyer can transfer their rights and obligations to another party. It is crucial for both buyers and sellers to understand this clause as it can impact the transaction’s dynamics. For sellers, it can determine if the buyer can assign their purchase agreement to another party. Buyers need to know if they have the flexibility to assign their contract to someone else. Being aware of the assignment clause’s implications ensures all parties involved in the transaction are on the same page and that the process proceeds smoothly.

Q10: In what situations might a buyer or seller want to exercise their rights under the assignment clause, and how does this affect the real estate transaction?

A10: Buyers might want to exercise their rights under the assignment clause if they are unable to complete the purchase themselves, perhaps due to a change in circumstances. Similarly, sellers might allow the assignment if they are open to selling to another party. The key is to understand that the assignment clause can lead to a change in the buyer, which could affect the deal’s terms or timeline. Both buyers and sellers should assess the potential impact of an assignment on the transaction and decide if it aligns with their goals.

Q11: Can real estate brokers play a role in helping clients navigate assignment clauses, and how can they assist in this regard?

A11: Real estate brokers can certainly play a valuable role in helping clients understand assignment clauses. They can explain the clause’s terms, implications, and its importance. Brokers can facilitate communication between buyers and sellers regarding assignments and help negotiate terms that are acceptable to both parties. Their expertise in contract interpretation and negotiation can be instrumental in ensuring that the assignment process, if it occurs, is conducted smoothly and in compliance with the contract.

Q12: What are the potential legal and financial risks involved with assignment clauses in real estate transactions, and how can these be mitigated?

A12: Legal and financial risks in real estate assignments can include potential disputes, unexpected liabilities, or financial implications. To mitigate these risks, it’s essential to have clear and well-defined assignment terms within the contract. Engaging a real estate attorney to review the assignment clause can help ensure its legality and enforceability. Additionally, conducting thorough due diligence on the assigned party and their financial capacity can reduce financial risks.

Q13: How does the presence or absence of an assignment clause affect the marketability and flexibility of a property in the real estate market?

A13: The presence or absence of an assignment clause can impact a property’s marketability and flexibility. Properties with more flexible assignment clauses might appeal to a broader range of potential buyers, including those who might consider an assignment. On the other hand, properties without an assignment clause might appeal to buyers seeking more control over the transaction. It’s essential for sellers to work with their real estate brokers to determine the right approach for their property, considering market demand and their own preferences.

Q14: How can real estate professionals, such as brokers and agents, help clients draft or negotiate assignment clauses to better protect their interests?

A14: Real estate professionals can collaborate with clients to draft or negotiate assignment clauses that protect their interests. They can ensure that the language is clear and specific, addressing the conditions under which assignments are allowed and any consent requirements. Brokers and agents can also help clients define any limitations, timeframes, or potential consequences related to assignments. The goal is to create an assignment clause that aligns with the client’s objectives and provides legal protection.

Q15: In the context of real estate investments, how does understanding and effectively using assignment clauses contribute to a more flexible and profitable investment strategy?

A15: For real estate investors, understanding and effectively using assignment clauses can enhance investment flexibility and profitability. Investors can use assignment clauses to capitalize on market opportunities by allowing the transfer of purchase agreements to other investors or entities. This flexibility can help investors quickly exit deals or capitalize on changing market conditions. However, it’s crucial to navigate assignment clauses with a clear understanding of the legal and financial implications to maximize profitability while minimizing risks.

Q16: What potential challenges or disputes might arise regarding assignment clauses in real estate transactions, and how can these be resolved or prevented?

A16: Challenges or disputes in real estate transactions related to assignment clauses can arise when one party wishes to assign the contract, and the other party disagrees or when the terms of the assignment are unclear. To prevent or resolve such issues, it’s crucial to have a well-drafted assignment clause that clearly outlines the process and conditions. Communication between all parties is essential to avoid misunderstandings. If disputes do occur, mediation or negotiation might be used to reach a resolution, and in some cases, legal action may be necessary. The best prevention, however, is to have a well-crafted contract that anticipates and addresses potential issues.

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A Guide to Pre-Construction Assignment Transactions

The process of “assigning” an interest in an agreement of purchase and sale is a relatively new concept in Waterloo Region and it is quickly gaining traction. The problem is that the average purchaser does not understand the intricacies of what is involved in order to successfully assign an interest in an Agreement with minimal tax implications. A further problem is that the form of the Assignment Agreement is quite complex. The purpose of this article is to break down an assignment transaction into a scenario that is frequently encountered by real estate lawyers and agents. 

In 2016, John (the “Assignor”) signs an Agreement of Purchase and Sale (the “Agreement”) to purchase a new condominium unit from Builder X (the “Builder”). He purchases this unit for $300,000.00 and, over the course of a year, he puts down a $45,000.00 deposit. The unit is scheduled to be completed in 2020. John predicts, that by the time the unit is built, it will be worth more than the $300,000.00 he originally paid. In 2019, John notices that the housing market in Waterloo Region is changing dramatically, that the Region has gained attention as a real estate hot spot and that John could stand to make a large profit if he sold his unit to a third party. Acting on these circumstances, John “assigns” his interest in the Agreement to Bob (the “Assignee”) for $380,000.00. In this process, Bob effectively steps into John’s shoes as the purchaser under the original Agreement with the Builder. 

John needs assistance to ensure that he assigns his unit properly. John, being a prudent purchaser, asks his real estate lawyer to review the original Agreement between John and Builder X to confirm whether the Agreement contains specific language which prohibits or restricts John from assigning the Agreement to Bob, and whether John can assign the Agreement without obtaining prior written consent from Builder X. Spoiler alert: most pre-construction agreements contain this prohibition. In fact, most pre-construction agreements will contain wording to the effect that consent may be “unreasonably and arbitrarily withheld” by the builder or consent may be “at the builder’s sole and unfettered discretion”. In the event that written consent is provided, the builder will likely collect a fee for authorizing the assignment, prohibit any subsequent assignments and insist that the original buyer remain on the hook until final closing if the Assignee, Bob in this case, fails to complete the transaction with the Builder.

It is fortunate that John engaged his real estate lawyer prior to finalizing his transaction with Bob. John has discovered that Builder X will charge John a fee of $5,000.00 to authorize the assignment.

John’s lawyer has also flagged another concern: John’s initial deposit AND his profit may be taxable by the Canada Revenue Agency (“CRA”). Let’s explore why John’s lawyer believes the assignment transaction is taxable. Whether an assignment is taxable or exempt from HST turns on the status of the Assignor as a “builder” for HST purposes. If the Assignor (in this case, John) is considered to be a “builder”, the Assignor will be required to collect and remit HST on the markup earned through the assignment (in this case, $80,000.00). Exactly how does the CRA make this determination? The CRA looks at intention. In investigating the Assignor’s intention, it is necessary to look at the Assignor’s circumstances at the time the original Agreement was signed. 

The CRA will look at several factors in determining John’s intentions. Here are a few:

• Is the Assignor a corporation?
• Does the Assignor take action to attract buyers while the property is under construction?
• How is the Assignor financing the purchase?
• Has the Assignor entered into multiple Agreements to purchase multiple units at around the same time?
• Is the Assignor’s stated intention to occupy the residence supported by his/her circumstances?
• Is the Assignor’s pattern of activity such that occupation of the property demonstrates that his/her use will not be permanent?
• Was the assignment triggered by an unforeseen and intervening event?

John’s lawyer determines that John’s primary purpose of purchasing the unit was to sell his interest in the unit to a third party.  John lives and works in Toronto and is married with 4 children. The condominium unit he agreed to purchase from Builder X is in the heart of Uptown Waterloo – a stunning 600 Sq Ft studio. While John did not construct the unit, for GST/HST purposes, he is considered to be a builder as he was “intending to sell the property or an interest in it or to lease the property”. John doesn’t see how he can alter his circumstances to support an alternative intention. John is second guessing whether he should proceed with this assignment transaction as his profit margin is quickly declining. 

Fortunately, John’s lawyer has a solution. John’s lawyer recommends to John that the assignment agreement should be worded such that HST is “in addition to” the assignment price as the transaction is subject to HST. John’s lawyer also adds a clause into Schedule “A” of the assignment agreement to confirm John’s intent to sell or lease the property. John is happy again.

Let’s revisit our scenario and think about what we’ve just discovered. The initial deposit is $45,000.00. John wants Bob to reimburse him for the deposit paid to Builder X. John also wants $80,000.00 (the “Assignment Fee”) from Bob in exchange for Bob taking John’s place as purchaser under the Agreement with Builder X. The total consideration is therefore $125,000.00 and all of it (yes, all of it – not just the profit but the deposit as well) is subject to taxation. Now Bob is unhappy.

Bob is concerned about HST. Bob engages his own lawyer. Bob’s lawyer reconfirms the HST implications in relation to the Assignment Fee and informs Bob that the Assignment Fee does not reflect his total financial obligation as the Assignee. Bob is a player in two distinct transactions:

• Transaction #1 = Bob’s Assignment from John
• Transaction #2 = Bob’s Purchase with Builder X

Bob’s lawyer reminds Bob that by entering into an Assignment Agreement, he is stepping into the shoes of John as the purchaser. Bob is assuming the original purchaser’s financial obligations under the Agreement with Builder X, however, Bob has no opportunity to renegotiate any of the terms of the original Agreement. Bob’s lawyer wants to review the original Agreement, any amendments and notices to the Agreement and Builder X’s disclosure package. Bob’s lawyer brings the various closing adjustments to Bob’s attention. Bob will be on the hook for another $37,200.00 in adjustments to Builder X according to his lawyer’s estimations. 

That’s not all. Bob’s responsibility to pay Land Transfer Tax (“LTT”) is also increased. In addition to paying LTT on the original purchase price of $300,000.00, Bob will also have to pay LTT on the Assignment Fee under the Assignment Agreement. Now Bob is very unhappy.

Bob’s lawyer has a recommendation for Bob. He suggests that Bob take advantage of the HST New Housing Rebate (“New Housing Rebate”). Bob already knows about this rebate. Bob is aware that under most new construction agreements it is assumed that the purchaser qualifies for the rebate and therefore the purchase price is listed as inclusive of the rebate for marketing purposes. In doing so, the builder fronts the rebate as a credit to the purchaser and applies to CRA following closing in order to recover the rebate from CRA. What Bob does not know is that if he submits a rebate application after completing his purchase with Builder X (as opposed to in conjunction with the transaction with Builder X), he will be able to claim the rebate over the Assignment Fee as well. If the Assignee meets the qualifications of the New Housing Rebate, the Assignee can recover from CRA a rebate for up to $24,000.00.  Bob’s lawyer also tells him that only one New Housing Rebate application can be filed per dwelling. 

To qualify for the New Housing Rebate, the applicant must: 1. Intend to acquire the property as a primary place of residence; 2. the property must never have been occupied prior to title transfer; and 3. the applicant (or their relative) must occupy the property continuously for a minimum of one year.

Bob’s lawyer concludes that Bob would benefit from applying for the New Housing Rebate on his own following the completion of the purchase transaction. Bob would be eligible for a rebate of $22,243.35 on the original Agreement price of $300,000.00. However on $380,000.00, the Assignment price, Bob’s rebate would increase to the maximum amount available: $24,000.00. Bob will recover an additional $1,756.65 if he applies for the rebate on his own. Bob is happy again! 

As lawyers, it is important to ask our clients detailed questions prior to waiving a “lawyer review” condition in an agreement. Here is a list of questions a prudent lawyer would ask when presented with an assignment agreement:

• Has the Assignor provided the Assignee with the builder’s written consent to authorize the assignment agreement? 
• Have the parties determined who will be responsible to pay any assignment fees if such are due to the builder?
• Is the Assignor’s deposit with the builder in good standing? 
• If not, has the Assignor made arrangements to bring the deposit into good standing including any applicable NSF charges?
• Has the Assignor contracted with the builder for any upgrades to the property that have not yet been paid as of the date of entering into the Assignment Agreement?
• Is the Assignee permitted to contract for any additional upgrades with the builder?
• Does the Assignment Fee include the cost of the upgrades contracted for to date? 
• Does the Assignment Fee include the cost of any “incentives” offered by the builder to the Assignor under the original Agreement? Are these incentives transferrable to the Assignee?  
• Has the Assignee reviewed the disclosure statement and original Agreement? Has the Assignee noted the additional adjustments that may be payable to the builder upon final closing and is the Assignee aware that such adjustments are the Assignee’s responsibility?
• Has the Assignor provided the Assignee with all amendments, waivers and notices as provided by the Vendor?
• Has the Assignee ensured with its lender that the Assignee will qualify for financing to complete the transaction? 
• Has proof of the Assignee’s financing been provided to the Assignor and to the Vendor?
• Does the Assignee qualify for the New Housing Rebate?
• Has the Assignee obtained confirmation from the builder that the Assignee will be credited with the New Housing Rebate on the builder’s statement of adjustments if the Assignee qualifies for rebate? 
• Is it in the Assignee’s best interest to collect the New Housing Rebate through the purchase transaction?
• Have the parties agreed when the Assignment Fee will be paid by the Assignee to the Assignor? Will it be at completion of the purchase transaction or at the time the Assignment Agreement is accepted?

So, what happens to John, Bob and Builder X? After conferring with their respective lawyers and after serious negotiation, the parties agree as follows: Bob will purchase John’s interest in the unit for $380,000.00 + HST as further set out in Schedule “A” of the Assignment Agreement. John agrees to assume responsibility for HST on the deposit to be recovered ($45,000.00) from Bob. Bob agrees to remit HST on the $80,000.00 Assignment Fee. As Builder X has had little dealing with Bob to date, Builder X is happy to add the potential rebate amount ($22,243.35) back into the sale price of the unit ($300,000.00). Out of caution, Builder X’s consent to permit the assignment continues to hold John liable to complete the transaction in the event that Bob fails to do so. Bob completes both transactions and applies for the New Housing Rebate post-closing. 

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Assignment Sale in Ontario: Definition & How It Works

An assignment sale is a unique transaction in the real estate market where the property’s original buyer (assignor) transfers their rights and obligations under a purchase contract to a new buyer (assignee) before the property’s completion. Particularly common in pre-construction projects in Ontario, this type of sale offers flexibility for investors and those whose circumstances may have changed. This article explores the definition, legal framework, and process of assignment sales in Ontario, providing essential insights for buyers and sellers engaged in these transactions.

What is an Assignment Sale?

What do the terms assignor and assignee mean, who pays hst on assignment sale, is builder’s consent required for assignment sale, how we can help.

An assignment sale is a transaction in the real estate market where the original purchaser of a property, known as the assignor, transfers their rights and obligations under a purchase agreement to another party, called the assignee, before the completion of the property. This type of sale is usually associated with pre-construction homes or condos that are yet to be built or are under construction at the time of the sale. The assignee takes over the rights and obligations of the original buyer, including any remaining payments to the developer and all other terms originally agreed upon in the contract.

The primary benefit of an assignment sale is its flexibility. It provides an exit strategy for buyers willing to complete the purchase. It offers potential for profit or entry into a property that might otherwise have been unavailable on the open market. For the assignor, it can be a way to liquidate their investment without waiting for the property to be completed. It can be particularly advantageous if their financial situation changes or market conditions favour such a move. Meanwhile, assignees can purchase a new property without waiting for a new phase of development to be launched, potentially benefiting from price appreciation since the original sale.

The assignor is the person or entity that originally purchased a property and holds the rights and responsibilities under the initial purchase agreement. This individual or entity may have entered into a contract to buy a property before its construction but decided to transfer this agreement to another party before the property was completed.

The assignee is the person or entity who accepts the transfer of the property purchase agreement from the assignor. By assuming the assignor’s agreement, the assignee agrees to fulfill the original contract’s terms, including any payments to the developer and adherence to any conditions specified in the agreement.

When a property is sold through assignment, the assignor is responsible for paying the Harmonized Sales Tax (HST) on the sale price, which includes the original price and any profit made on the transaction. To ensure clarity and avoid any legal issues, it is recommended that a Real Estate lawyer prepare the assignment agreement with all necessary information.

The builder’s consent is usually a requirement for assignment sales. The builder’s contract will specify if it is allowed and under what conditions. This clause is necessary because it lets the builder maintain control over who is becoming a part of the development and ensures that the assignee has the financial capability to complete the purchase.

Acquiring the builder’s consent can come with additional fees, and approval procedures can vary depending on the developer. Some builders may charge a flat fee, a percentage of the sale price, or a combination of both to grant permission for the contract assignment. Additionally, the builder may have specific requirements that must be met before approving the assignment, such as the construction status or payment of a certain percentage of the original purchase price. It is advisable to review the terms of the original agreement carefully and prepare for any financial or procedural requirements that obtaining such consent might entail.

It is often possible to obtain a builder’s consent to assign an agreement, even if such consent was not included in the original contract. Many builders will waive the clause prohibiting assignment from the agreement, provided that certain criteria and forms are followed and any required fees are paid. The builder’s sales office can determine if consent is possible and under what conditions. Different builders have varying processes for property assignment.

Assignment sales involve complex legal and financial considerations requiring thorough understanding and careful handling. Potential participants in assignment sales should consult with real estate professionals and legal advisors to navigate the process effectively and ensure compliance with all relevant legal requirements.

Insight Law Professional Corporation is a real estate law firm located in Toronto. If you need more information on real estate transactions, contact us today and learn how a  real estate lawyer  can help you.

The information provided above is of a general nature and should not be considered legal advice. Every transaction or circumstance is unique, and obtaining specific legal advice is necessary to address your particular requirements. Therefore, if you have any legal questions, it is recommended that you consult with a lawyer.

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Demet Altunbulakli

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Assignment Sale

What is an assignment sale in ontario.

If you have purchased pre construction properties in Ontario, chances are you have come across the term “assignment sale”. So what exactly is an assignment sale?

An assignment sale is when the original purchaser of a pre-construction property assigns their original purchase agreement to another party before taking ownership of the unit. The new purchaser then takes on all the obligations of the original contract and completes the transaction with the builder.

Assignment sales are prevalent in new construction condo buildings. This is because many purchasers who buy pre-construction condos do so with the intention of flipping the unit for a profit before taking possession.

The Importance of an Assignment Clause in Pre Construction Condo Purchase

A purchase and agreement of a new construction property may include an assignment clause. This assignment clause gives the purchaser the right to assign their contract to another party, subject to the approval of the developer. An assignment fee and their lawyer’s legal fees are typically charged by the builder.

If you are planning to assign your pre-construction purchase, it is essential to have a real estate lawyer review the contract beforehand to make sure the important assignment agreement clause is included and that you understand all the terms and conditions. Assignment sales can be complex transactions with many different stakeholders involved.

Does Land Transfer Taxes Apply in Assignment Sales?

If you are the seller of the assignment, then you are not required to pay a land transfer tax. However, if you are the buyer of an assignment sale, you will be required to pay a land transfer tax on the assignment purchase price. Be sure to factor in these additional closing costs when considering an assignment sale.

HST on Profit

On April 7, 2022, the Government of Canada unveiled Budget 2022: A Plan to Grow Our Economy and Make Life More Affordable. As a result, GST will be added to all assignment sales of newly constructed properties as part of the government’s effort to curb housing speculation. These tax implications are important to take into consideration when contemplating an assignment sale.

As of  May 7, 2022, under the Excise Tax Act, every individual assignor of residential real estate would have to collect GST/HST on their assignment profit and remit it to the CRA. For example, if you originally purchased a pre-construction condo for $500,000 and assigned it for $700,000, you would be required to remit GST/HST ($23,008.96) on the profit to the CRA. For greater understanding, it is important that you consult a tax specialist.

Factors to Consider When Purchasing on Assignment

It is important to have a lawyer review the contract to ensure that the important clauses are included and that you understand all the terms and conditions before considering an assignment sale.

There are a number of closing costs associated with purchasing a pre-construction condo unit. These costs can include but are not limited to development levies, meter installation fees, real estate lawyer fees, and land transfer taxes. As part of the assignment agreement, these will all need to be paid by the new purchaser.

An assignment deal can be a great way to get into the real estate market. However, it is important to do your homework and understand all cost involves. If you have any questions, be sure to speak with a real estate lawyer.

Right to Lease During Occupancy

An interim occupancy period occurs when a purchaser takes possession of their new condo unit before the building has been officially registered. In return, the purchaser will pay the builder monthly occupancy fees which include the property tax, maintenance fees, and interest on the outstanding balance owed to the builder. These occupancy fees are payable until the project is registered and the title has been transferred to the purchaser.

If you are planning to purchase a pre-construction condo unit with the intention of renting it out, it is important to ensure that the contract includes a clause that allows for interim occupancy with the right to lease. This is typically only allowed with the permission of the developer and would be at their discretion. If you are planning on leasing the unit, it is important to make sure that you will be able to do so before signing a purchase and sale contract.

What are the Legal fees for an Assignment Sale?

If you are planning on selling your condo unit before taking occupancy, it is important to factor in the real estate lawyer fees associated with an assignment sale. These fees can range from $1000 plus disbursements and are typically paid by the seller. As an assignment is not a typical sales transaction, it is important to ensure that you have both a real estate lawyer and a real estate agent who is experienced in handling these types of transactions.

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April 18th - 2016

What consumers need to know about assignments: RECO

Assignments in real estate have been the focus of media attention recently. The Real Estate Council of Ontario (RECO) answers questions about this type of transaction.

Q: What is an assignment?

A: An assignment is a sales transaction where the original buyer of a property (the “assignor”) allows another buyer (the “assignee”) to take over the buyer’s rights and obligations of the Agreement of Purchase and Sale, before the original buyer closes on the property (that is, where they take possession of the property). The assignee is the one who ultimately completes the deal with the seller.

In other words, an assignment clause allows the buyer of a home to sell the place before they take possession of it. In Ontario, assignments are more common in pre-built homes and condos than on re-sale properties, but they are possible on any type of trade.

Q: Are assignments legal, and why do they happen?

A: When done properly, assignments are legal and can be a useful tool for buyers and sellers. An example of this would be a situation where a buyer’s financial or personal situation changes before closing. Assigning allows them to pass along the contract to another buyer, without backing out of the deal with the seller.

For instance, someone could buy a condo that is still under construction and might not be ready for a couple of years. The buyer’s work or family situation could change during that time, causing them to change their mind about living in the condo they purchased. Another example may be where a buyer runs into financial difficulties to close on an existing house and wants to find another buyer rather than risk the financial penalties that might come with having to try to back out of the deal.

Q: Why is there so much attention surrounding assignments at this time?

A: Recent media reports out of British Columbia suggest that some real estate professionals in that province may have been using assignments to make more money on the deal without telling their seller clients about what they are doing. When there is a registered real estate professional involved in a transaction, they have a number of obligations to their client. Some of those obligations involve disclosing if they have a personal interest in the transaction that goes beyond the commission they stand to earn on the transaction.

The assignment situation in Vancouver appears to be a localized issue, and we haven’t seen evidence of it being prevalent in Ontario. However, we are monitoring closely. If consumers are aware of questionable practices, RECO wants to know about it so we can investigate. Our complaint form can be found here .

Q: What are the obligations of real estate professionals when it comes to assignments in Ontario?

A: Ontario has rules requiring real estate professionals to disclose any personal interest in a purchase or sale. There would also be disclosure obligations if the same brokerage were representing both the buyer and the seller in a transaction and the buyer intended to assign the purchase to another buyer. In this case the brokerage would have to inform the seller. The seller could then make an informed decision about whether to include an assignment clause in the Agreement of Purchase and Sale.

In Ontario, all registered real estate professionals have an obligation to act with fairness, honesty and integrity when dealing with others in a real estate transaction, while protecting and promoting the best interest of their clients. The seller’s representative is expected help the seller weigh the pros and cons of giving the buyer the ability to assign the property to another buyer.

Q: What is RECO doing about assignments in Ontario?

A: RECO is continuing to monitor this issue, and if a registered real estate professional breaches the rules, they would be pursued to the full extent of the law. In addition, RECO has asked its inspection team to watch for anything unusual related to assignments.

If you work with a registered real estate professional and feel like they did not look out for your best interests, you can file a complaint with RECO and we will investigate the situation.

Q: What about the tax implications of assignments?

A: RECO advises anyone participating in an assignment to seek the advice of a tax specialist. Generally, assignors can expect to pay tax on any profits they realized from the assignment. Land transfer taxes are paid by the assignee, as they are only due when the sale closes (that is when the property actually changes hands).

Q: How can home buyers and sellers protect themselves?

A: As with any contract, it’s crucial for buyers and sellers to know what they’re signing. Real estate contracts are legally-binding, so getting legal advice can be a smart idea. It’s important to know what each clause means and how it will affect you. Buyers and sellers are encouraged to ask their real estate professional to explain the clauses in the contract.

Beyond contracts, RECO encourages buyers and sellers to do their homework. That means interviewing several salespersons, getting several comparative market analyses to understand what their home is worth and having realistic expectations about timelines, pricing and how the process will work.

For more details, visit www.reco.on.ca .

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Ontario Real Estate Association

Jean-Adrien Delicano

Manager, Media Relations

[email protected]

416-445-9910 ext. 246

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Renovate before reselling? Some tips from RECO

If your clients plan to renovate before selling their home, they should remember that upgrades and repairs cost time and money. RECO provides tips to protect consumers and their pocketbooks.

Multiple offers pose unique challenges

December 22, 2015

A multiple offer situation requires attention to detail and due diligence on a number of fronts, no matter where the property is located. The EDGE newsletter spoke to three REALTORS® in different cities about how they handle competing offers.

What kind of REALTOR® superhero are you?

All REALTORS® are superheroes. Take part in a fun and interactive quiz to learn what kind of superhero you are.

Ontario government close to allowing doubling of land transfer taxes

The Ontario government has indicated it will make home buying even harder by giving all municipalities authority to levy a municipal land transfer tax (MLTT).

Call for Candidates – Foundation

Get your home ready for winter: ibc.

Short, dark days and colder temperatures are a reminder to start preparing your home for winter. The Insurance Bureau of Canada lists some steps to prepare for the arrival of those sub-zero days.

Legal Beat: Wet basement a reminder of buyer beware precedent

In this case, the buyers discovered a leak in the basement after moving into a house, and the concept of buyer beware played a key role in the court decision.

Miss Real Estate Manners: Protect your clients

Safety and compliance should be top of mind when you conduct a real estate showing. Read the latest installment of tips from the London and St. Thomas Association of REALTORS® (LSTAR).

Offer handling a common complaint: RECO

A high proportion of complaints to RECO pertain to the handling of offers. Make sure the process and your conduct are fair, ethical, open and transparent.

November 23, 2015

The Ontario Real Estate Association (OREA) has developed a fun and interactive quiz that asks what kind of superhero you are. Play the game now.

Condo challenges: The particulars of the condominium market

Learn about the peculiarities of the condominium market from two REALTORS® who have been selling condos for 25 years or more. They share insights and experiences to help you navigate a market that is different from other residential real estate.

Romancing the real estate brokerage

Starting a career in real estate is like a new romance. Treat it like a budding romance to find yourself in wedded bliss rather than divorce court, advises one Ottawa Realtor.

Looking for volunteers on OREA committees

Joining a committee or task force is a great way to meet colleagues and contribute to the real estate profession. Serve your profession and enhance your knowledge by volunteering for a committee.

Legal Beat: Get your BRA signed

Getting a Buyer Representation Agreement (BRA) signed at the beginning would have prevented problems and a lawsuit in this commercial case.

Comic video highlights generation gap

A funny new video about a millennial client and her older REALTOR® exposes a generation gap in language.

Miss Real Estate Manners: Know your limits

Don’t overstep your bounds or give advice beyond your own level of expertise. Read the fifth installment of tips from the London and St. Thomas Association of REALTORS® (LSTAR).

Child's play: Working with young families

October 18, 2015

Showing properties is a crucial step in selling a home, but special challenges exist when young children are involved. Three REALTORS® talk about their approach to ensuring that everything runs smoothly.

REALTOR® value the focus of ad campaign

Television and billboard ads that promote the value of using a REALTOR® are running this fall across Ontario. The ads are part of the REALTORS® we do the homework campaign.

Don’t fear the heritage property

Heritage properties need not be a source of fear if you work in real estate. They are a substantial part of many markets across the province and one expert predicts their numbers will only increase over time.

RECO: Registrant fails to check zoning

The registrant in this transaction promoted a property as having two units, highlighting the rental potential with no mention of zoning restrictions. Read the decision from the Real Estate Council of Ontario after a complaint was submitted.

Come to one or more events this fall to keep you on the cutting edge of technology in real estate and hone your skills. Sign up for an event as part of Emerge: Moving You Forward with the tools for Tomorrow.

Legal Beat: Brokerage sale leads to debate over turnkey operation

In this transaction, the owner sold her brokerage to buyers who later argued it was supposed to be a turnkey operation – a business already set up and ready to go with no changes needed. A lawsuit ensued.

Miss Real Estate Manners

Courtesy and common sense are vital ingredients for a successful real estate career. Read the fourth installment of tips and advice from the London and St. Thomas Association of REALTORS® (LSTAR).

Motorcycle ride a success

Sunny skies warmed the riders at this year’s Motorcycle Ride for Charity, who completed a successful ride from Toronto to Ottawa for a good cause. This year marked the 10th anniversary of the ride organized by the Ontario REALTORS Care® Foundation.

College wins prestigious award

The OREA Real Estate College has won a prestigious educational award for its blended learning curriculum from the Real Estate Educators Association, beating out hundreds of other programs across North America.

Mentorship in real estate

September 22, 2015

The guidance of experienced professionals can help you grow in your career and personal life. Mentorship takes different forms, from one-on-one sessions to group meetings or formal training. Three REALTORS® talk about how mentoring has helped them.

Complaints service helps at stressful time

It can be stressful to learn that you are the subject of a complaint to the Real Estate Council of Ontario. A service created by the Ontario Real Estate Association helps you navigate the process and know what to expect at a challenging time.

Serving buyers in the pre-construction phase

When a property is not yet built, ask many questions and use due diligence to prevent surprise and disappointment for your buyers, advises one Toronto REALTOR®.

Ad campaign promotes REALTOR® value

Television and billboard ads that promote the value of using a REALTOR® will be running this fall across the province. They are all part of the REALTORS® we do the homework campaign.

Video and webinar explain new form

A short video and web tutorial help you understand Form 801, the new document created to help comply with legislation to prevent phantom offers.

Fall technology events

Dates and locations are now confirmed for fall tools and technology events as part of Emerge: Moving You Forward with the Tools for Tomorrow. Find out about upcoming events in your region of the province.

Legal Beat: When you don’t have a crystal ball

The seller took legal action against her REALTOR®, claiming she was misled by flawed advice to sell her property at a price below market value.

Consumer confidence in local markets growing

More Ontarians have a favourable opinion of the real estate market in their local city or town, according to new research released in an index produced by the Ontario Real Estate Association.

Courtesy is paramount in the real estate industry, according to the latest installment of tips and advice on professional behaviour in real estate from the London and St. Thomas Association of REALTORS®.

Handling stress in real estate

August 22, 2015

Real estate can be a stressful career. Erratic hours, stiff competition and an uncertain income all contribute to the stress. Three seasoned REALTORS® talk about how they cope with stress and share their tips.

Electronic signatures now allowed for agreement of purchase and sale

July 1, 2015

Legislation is now in place to allow electronic signatures to be used for the agreement of purchase and sale (APS) in real estate transactions.

New form deals with law to prevent phantom offers

A new form is available to help you comply with legislation aimed at preventing phantom offers. The Ontario Real Estate Association has created Form 801, an offer summary document that satisfies the conditions of Bill 55, The Stronger Protection for Consumers Act.

RECO: Registrant switches brokerages and changes lawn signs

The registrant moved to a new brokerage and changed the lawn signs on properties for clients whom he had represented through his old brokerage. Read the decision from the Real Estate Council of Ontario after complaints were submitted.

Get organized and stay organized

Managing your time in the demanding real estate profession can be a challenge. REALTOR® Eric McCartney of York Region shares some of his insights into getting – and staying – organized.

Fall into technology events

July 18, 2015

If you want to stay on the cutting edge of technology in real estate, come to one or more events this fall around the province as part of the series called Emerge: Moving You Forward with the Tools for Tomorrow.

Consumers show confidence in local markets: Index

What do Ontario consumers really think about the current real estate market? Learn more in the newest results from the Ontario Home Ownership Index research study.

Legal Beat: Lack of electricity a reminder that REALTORS® must verify facts

The registrant was selling two vacant rural lots and his signs and advertisements stated that the properties were “fully serviced” by an electricity source on the road at the edge of the property. A court case ensued when the buyer learned that electricity service was lacking.

Miss Real Estate Manners: Do unto others

Treat your colleagues, customers and clients the way you would like to be treated. Read the second installment of tips and advice from the London and St. Thomas Association of REALTORS® (LSTAR).

Miss Real Estate Manners: Show courtesy

June 7, 2015

Courtesy, communication and common sense are the three “C”s that real estate brokers and salespeople should follow in doing business. The London and St. Thomas Association of REALTORS® shares some tips from its “Miss Real Estate Manners” summary of good behaviour.

Motorcycle ride for charity celebrates 10th anniversary

June 5, 2015

The rubber meets the road on Wednesday, July 8 in this year’s Motorcycle Ride for Charity. Take part in the ride or sponsor a rider to support the many shelter-related charities that benefit from the ride organized by the Ontario REALTORS Care® Foundation.

Avoid advertising pitfalls

June 8, 2015

Make sure your real estate advertisements follow the provincial guidelines to prevent complaints and fines for false or misleading advertising. The industry regulator, the Real Estate Council of Ontario, outlines some of the most common mistakes spotted in real estate ads.

Wired Office: Big data is key to real estate service

June 6, 2015

Big data is everywhere, and more consumers are doing at least some online searches of their own before contacting a REALTOR®. Find out how big data can help you give a better service to your clients and customers even in today’s wired world.

Legal Beat: Buyers will find out eventually

June 4, 2015

The sellers in this case experienced water damage at their property, a fact not disclosed during the real estate transaction. A lawsuit was launched after the buyers learned from their new neighbours about previous water and mould problems at the house.

Awards honour volunteers, milestones

June 3, 2015

OREA training video popular

June 1, 2015

A video blog post on how to give clear classroom instructions has found popularity on YouTube. It is just one in a series of instructional videos for trainers that help facilitate classroom sessions.

June 2, 2015

Many REALTORS® help families find the perfect home, but they also do a great deal of volunteer work to support charities that give shelter to the homeless and others in need. The Ontario REALTORS Care® Foundation honoured various individuals and groups for their charity work.

Four tips for a hassle-free move: RECO

The Real Estate Council of Ontario (RECO) has published tips to help consumers select the best mover. Share these tips from Consumer Protection Ontario with your clients and customers.

Hone your negotiation skills

May 6, 2015

Even a flock of chickens can be the subject of dispute in a real estate transaction. Negotiation is vital in this line of work, and the more you hone your negotiating skills, the more successful your career will be. Read more about negotiating skills and the art of the deal from three Ontario REALTORS®.

Developing your brand

May 5, 2015

Branding in real estate yields tangible results. A pair of REALTORS® learned this after asking some tough questions in the process of developing their brand. Find out how an Ottawa team achieved lasting recognition by developing its brand.

Rules vary for basement apartments, second suites

Be cautious in your approach to properties with basement apartments, second suites or in-law suites. That’s because the laws vary across the province and can be a legal minefield.

President’s Message from Patricia Verge

May 4, 2015

The president of the Ontario Real Estate Association notes that change is the new normal in today’s business world. Patricia Verge discusses the challenges and changes in real estate today.

RECO decision: Memory fails registrant who conveys wrong price

A registrant’s mistaken price presentation leaves the sellers out of pocket and the buyers out of luck following this transaction, which leads to a RECO complaint.

Legal Beat: Saturday closing leads to lawsuit

May 2, 2015

A closing that was scheduled for a Saturday in an agreement of purchase and sale (APS) led to legal issues in an Ontario property transaction.

Unveiling the OREA Real Estate College alumni program

A graduate’s connection to his or her college should not end on graduation. That’s why the OREA Real Estate College has launched a new alumni program.

Snapshot of OREA members revealed

May 3, 2015

A new survey of members of the Ontario Real Estate Association (OREA) provides valuable information and helps create a profile of members across the province. Find out more about the age, language, locations, and type of real estate transactions conducted by members.

Motorcycle ride for charity

This year’s Motorcycle Ride for Charity organized by the Ontario REALTORS Care® Foundation will take place on Wednesday, July 8. Riders depart from the OREA headquarters in Don Mills, with several stops on the way to Ottawa.

Annual report now available

May 1, 2015

An interactive version of the 2015 annual report of the Ontario Real Estate Association is now posted to the OREA website, with electronic links to bring you more information on the products and services provided by OREA.

Bridging the generation gap in real estate

It has never been more important for young and old to work together. In an industry that is constantly evolving, both new and seasoned REALTORS® must collaborate and share knowledge, argues one Ontario broker.

The board of directors of the Ontario REALTORS Care® Foundation for 2015 was officially installed at the annual OREA conference.

RECO website refreshed

The Real Estate Council of Ontario recently unveiled its new website. The site has been revised to better serve the needs of both consumers and real estate professionals.

The importance of repeat business and referrals

April 4, 2015

Word-of-mouth advertising is a vital way to build your business. Referrals and repeat business are crucial to your success in real estate. In this feature article, three Ontario REALTORS® talk about the strategies they use to get referrals and generate repeat business.

REALTOR® value advertising campaign continues

April 3, 2015

An ad campaign designed to promote REALTOR® value to the public will continue until the end of 2018. That decision is the result of a vote on a special levy to fund the extension of the campaign at the annual general meeting of the Ontario Real Estate Association (OREA).

The benefits of volunteering in real estate

April 1, 2015

Many personal and professional benefits come from volunteering, as the president of a local real estate association learned after a year in office.

REALTOR® Quest the largest show of its kind

April 2, 2015

On May 6 and 7, thousands of real estate professionals will gather at the Toronto Congress Centre for Canada’s largest REALTOR® trade show and conference, featuring seminars, learning opportunities and up to 240 exhibitors.

Personal real estate corporations the focus of bill

A bill introduced recently at Queen’s Park aims to change legislation to allow real estate salespeople in Ontario to incorporate. The Tax Fairness for Realtors Act would bring Ontario in line with six other Canadian provinces.

Legal Beat: Use forms properly and fill in the blanks

A contract became null and void after forms were not completed properly and a notice waiving conditions was not delivered personally to the seller.

Technology and real estate the focus of event

RETechTalks is a conference with a focus on technology and real estate, described as a day to learn from the very best people in Toronto real estate.

OREA News: New board of directors for 2015

The Ontario Real Estate Association officially installed its new president and board of directors at the annual meeting in Toronto on March 11.

Market Watch: Housing affordability slips nationally

Solid increases in Ontario home prices were key to the slight erosion in housing affordability across Canada, according to a housing trends report.

Surviving the busy spring season

March 26, 2015

Although springtime means sunshine and flowers in bloom, it represents the busiest time of year in real estate. Three experienced Ontario REALTORS® share their ideas and insights on how to cope and thrive during the industry’s busiest season.

Green real estate conference

March 19, 2015

The business case for environment-friendly buildings has never been stronger. Learn more at the upcoming Green Real Estate Conference on April 23 at the Metro Toronto Convention Centre.

Women’s hockey star and IBC promote road safety

Drive according to weather conditions. That’s the message of a new road safety video produced by the Insurance Bureau of Canada (IBC) featuring Canadian women’s hockey star Kelly Terry. Watch the video here.

RECO: Agreement to lease doesn’t show that tenant would rent to students

March 22, 2015

In this RECO decision, the registrant was disciplined after the owner of a property discovered that her property had been turned into a rooming house for students.

Remind consumers to hire contractors who work safely

March 24, 2015

Renovation work done by the wrong contractor can create expensive problems. The Ontario Ministry of Government and Consumer Services has crafted tips to help consumers select contractors who work safely.

Legal Beat: Installation of ATM the focus of commercial dispute

March 25, 2015

The landlord and tenant in this commercial dispute disagreed over the installation of an automated teller machine (ATM) on the property. The court case drained cash at a pace that rivalled that of the dispensing machine itself.

New advertisements released in REALTOR® value campaign

March 20, 2015

An exciting new slate of advertisements is being released March 2 to promote REALTOR® value to consumers across Ontario.

OREA website refreshed

A bold new look and feel is evident on the OREA website, making it quicker and easier for you to get what you need to succeed in your real estate career.

News: Call for volunteers

Joining a committee or task force is a great way to meet real estate colleagues and make a contribution to your profession. The deadline to apply is March 20.

Welcome to the digital EDGE

February 22, 2015

OREA is pleased to launch an all-electronic version of The REALTOR® EDGE newsletter, full of useful news and information to help you in your real estate business.

Safety first should be motto for REALTORS®

Safety is highly important for those working in real estate. Three REALTORS® share their experiences and talk about the importance of taking precautions when showing properties or hosting an open house.

Broader export demand predicted: RBC

Canada’s economy is expected to see higher export growth in 2015, despite the recent decline of oil prices, says a new report.

Housing outlook for 2015 shows modest gains

Most regions posted modest gains in average prices of residential homes despite increased inventory in many of Canada’s housing markets, according to a recent report from RE/MAX.

Levy recommended to fund REALTOR® value ad campaign

For two years OREA has promoted the value of REALTORS® via a mass advertising campaign. Delegates to the OREA AGM in March will be asked to vote on a special levy to continue to fund the campaign.

Ontarians feel better about economy, real estate markets

Six out of 10 Ontarians surveyed say the state of their city’s economy is good, up from 53 per cent last year, according to a research study commissioned by OREA and Ipsos Reid.

Embracing the growing heritage market

The heritage market is growing swiftly thanks to a boom in home renovations. Conservation expert Robert Hulley shares his insights for REALTORS® who want to capitalize on the opportunities.

Legal Beat: Plaintiff in commercial case has great expectations

An executive seeking to develop commercial condos spent nearly $100,000 on marketing then sued his brokerage for reimbursement after the relationship soured.

Save the date

It's time to jot down the date for the Ontario Real Estate Association’s Annual Assembly Meeting and REALTORS Care® Foundation Annual General Meeting.

Joining a committee or task force is a great way to meet colleagues and make a contribution to the real estate profession. Serving your profession in this way works to enhance your knowledge of and connections to the field.

The EDGE goes green

January 22, 2015

Starting next month, The REALTOR® EDGE newsletter will be delivered in an electronic format only. This month's issue is the last print edition, marking the end of an era - and a new beginning - for the highly popular newsletter produced by the Ontario Real Estate Association.

Real estate couples: Sold on partnerships

Many couples find that working together at the same real estate brokerage strengthens both their marriage and their business, as well as drawing on complementary skills.

Backing up your data

If you haven’t backed it up, then you don’t have it. So goes the rule about copying and archiving your computer data. If your files - documents, photographs, videos, music etc. - are not backed up in at least one secondary place, then they’re as good as gone.

Buyers’ regrets reported: RECO

Almost half (45%) of first-time buyers and 41% of home owners wish they had done something differently during the transaction, says a survey from the Real Estate Council of Ontario.

Modest overvaluation of housing prices: CMHC

A modest amount of overvaluation was observed by the Canada Mortgage and Housing Corporation (CMHC), meaning that house prices in the country are slightly higher than what underlying factors suggest they should be.

Condominium living means following rules

This case focused on ongoing issues between a condominium corporation and one of its unit owners who continued to defy restrictions at the property.

It's time to jot down the date for the Ontario Real Estate Association’s Open Forum, Annual Assembly Meeting and REALTORS Care® Foundation Annual General Meeting.

Jam raises funds

Music, dancing and jamming were all for a good cause at the Jam with a Past President held in conjunction with OREA’s recent Political Affairs Conference (PAC) in Toronto.

Books and ideas to ring in the New Year

December 28, 2014

A new year offers a fresh start and a chance to embrace change. The EDGE newsletter spoke to REALTORS® from across the province who shared their thoughts about books and ideas to ring in 2015.

President's message

OREA President, Costa Poulopoulos, reports on the latest advocacy work being undertaken by the Ontario Real Estate Association on issues that matter to REALTORS® and real estate in his winter message.

The OREA Real Estate College has won an educational programming award from the Learning Resources Network (LERN), the world’s largest association devoted to continuing education and lifelong learning.

December 21, 2014

Interested in running for a position on OREA’s 2015 board of directors? The following positions are up for election: four Provincial Directors (made up of one each from the Western, Northern, Eastern and Central Ontario Areas), and two Directors-at-Large.

Interested in running for a position on OREA’s 2015 board of directors? The following positions are up for election: four Provincial Directors

Driving in my car: REALTORS® and their vehicles

Driving is a big part of our jobs. Having been raised by a REALTOR®, I learned that fact early on.

Helping your clients deal with form overload

Real estate transactions involve pages and pages of forms, and a key part of your job is to help consumers navigate their way through them.

Hotsheet: Household safety tips from IBC

The short, dark days at this time of year provide an opportunity to turn your attention to household safety.

Joining a committee or task force is a great way to meet colleagues and make a contribution to the real estate profession.

Market Watch: Green real estate conference

The business case for green buildings has never been stronger. Market interest in greening new and existing buildings is at an all-time high.

OREA wants your input

Join OREA’s research panel and your valuable opinions will help to guide policies, develop educational opportunities and evaluate OREA services.

Stay safe while you’re on the job

Pay attention to safety issues and develop good habits to ensure that you keep safety in mind at all times when working in real estate.

Updates to forms and clauses

The Standard Forms Committee of the Ontario Real Estate Association (OREA) has approved the revisions and creation of new forms and clauses for 2015.

Breaking up is hard to do: Dumping a client

November 20, 2014

Dumping a client does not happen often, but over the course of your real estate career a breakup or two is bound to occur.

Tips to avoid a client breakup

Pre-qualify buyers. Sometimes they are not realistic. Everything comes down to qualifying. Sort out wants, needs and “must haves” and make sure that the money for a purchase is actually available.

Jobs, economic activity threatened by land transfer tax

A significant loss of jobs and economic activity in Mississauga, London, Hamilton, Ottawa and Thunder Bay will occur if a municipal land transfer tax is imposed in those cities

Hotsheet: Index Home Buyers’ Plan: CREA

The Canadian Real Estate Association (CREA) has launched a call to action to REALTORS® to urge the government to index the Home Buyers’ Plan (HBP) to inflation.

Market Watch: Businesses rely more on mobile technology

Reco decision: advertisement causes problems.

The following decision from RECO Discipline and Appeals Hearings has been condensed and all names have been changed.

Ad campaign to promote REALTOR® Value continues

Promoting the value of using a REALTOR® to the public has been the focus of a recent advertising campaign by the Ontario Real Estate Association (OREA), and the message is getting through.

Legal Beat: Deception over fire leads to lawsuit

One of the buyers of a property had respiratory problems. Before making a purchase, the buyers instructed their real estate representative to ask whether a fire had ever occurred in that house.

Political Affairs Conference in November

The Ontario Real Estate Association will hold its 2014 Political Affairs Conference (PAC) from Nov. 23 to 25 at Toronto’s Park Hyatt Hotel, 4 Avenue Road.

Interested in running for a position on OREA&rsquo;s 2015 board of directors?</strong> The following positions are up for election: four Provincial Directors

Call for candidates - Foundation

Interested in running for a position on the Foundation’s 2015 board of directors? The following positions are up for election: three REALTOR® Directors

Reaping rewards from rental sales

October 23, 2014

Many buyers today are looking for investment properties like apartment buildings or vacation homes that they can rent out.

Budgeting most important strategy for home buyers: Research

Ontarians planning to buy a home in the next two years cited various financial strategies to save for a down payment

RECO decision: Sales rep enters property without permission

Hotsheet: tips to prevent house fires.

Fires claim lives and cost millions of dollars in damage every year. To prevent these tragedies, the Insurance Bureau of Canada offers tips for preventing house fires and saving lives.

Market Watch: Employment growth looks brighter for late 2014

A rebound in economic growth recently and expectations for future solid growth bode well for employment prospects, according to a new report.

The Ontario Real Estate Association will hold its 2014 Political Affairs Conference (PAC) from Nov. 23 to 25 at Toronto’s Park Hyatt Hotel, 4 Avenue Road.

Train for success with new online course

Real Estate Professionals at Work is a new online professional development course designed for REALTORS® to apply the principles of professionalism in their day-to-day practices.

Legal Beat: Caught in a “net-net” of confusing language

The commercial tenant in this case had a three-year lease that was renewed for two years and then for a further two years.

Second video produced in OREA series

A new video aimed at helping you to connect with consumers has been produced by the Ontario Real Estate Association (OREA).

Technology and strategy the focus of events

Boosting your technology skills and enhancing your strategic approach to your real estate business are the focus of a series of events offered this fall by the Ontario Real Estate Association.

Gimme five: The deposit and five business days

September 23, 2014

Once an offer is accepted by both parties in a real estate deal, the buyer’s deposit must be delivered to the brokerage in accordance with the terms outlined in the Agreement of Purchase and Sale (APS).

Quiz: Deposit and five business days

Here’s a quiz to test your knowledge. In all of these instances, assume that the offer has been accepted by both parties to an APS and that the deposit in question has been delivered in accordance with the terms of the APS. T

Index reveals consumer perceptions of market

What do Ontario consumers really think of the current real estate market?

Hotsheet: New RECO mobile app

A new mobile app was launched by the Real Estate Council of Ontario (RECO) this summer.

Market Watch: Price surges in big cities mask temperate national market

Home prices are expected to increase steadily in Canada for the remainder of 2014, with the average price of a home in Canada rising between 3.9 and 5.2 per cent in the year’s second quarter, according to a new report.

Serving as a resource and a mediator

The consumer perception of what we do in our line of work is very different from the reality of my daily activities.

Legal Beat: Structure is aerodrome, not boathouse, owner argues

The purchaser of this Ontario recreational property was a long-time developer.

Association wins diversity award

The Ontario Real Estate Association (OREA) has won an award for its efforts on workplace diversity.

New and improved student handbook

An updated and enhanced student handbook produced by the OREA Real Estate College is now available.

Good riding weather helped to ensure the success of this year’s Motorcycle Ride for Charity.

Dollars and sense: Managing your money

August 23, 2014

Starting out in real estate can be financially challenging, especially given the initial lack of income and the volume of upfront expenses.

Technology events across the province

Keep your technology skills sharp by attending one or more in a series of events offered by the Ontario Real Estate Association in the coming months.

Hotsheet: Global property market the focus of conference

The 9th annual Global Property Market is a targeted opportunity for Canadian institutional investors, real estate income trusts, real estate operating companies and private equity funds.

Market Watch: Manufacturing sector continues to be sluggish

Manufacturers in Canada recently signalled the slowest improvement in overall business conditions in four months, largely reflecting a further moderation in output growth,

Etiquette and best practices for real estate showings

July 27, 2014

Security is important to consumers and it’s one of the reasons they choose to use a REALTOR®.

Legal Beat: Choose words carefully in commercial documents

The listing agreement in this case stipulated that: a commission will be paid if the property is sold; the commission will be paid after the sale is completed;

Index to track consumer opinions

The Ontario Home Ownership Index is an exciting new initiative from the Ontario Real Estate Association (OREA) to help you learn more about the public’s views on the real estate market across the province and at a more local level.

Video promotes value of REALTORS®

A new video aimed at helping you to connect with consumers has been produced by OREA.

Running a real estate brokerage

June 22, 2014

While many real estate salespeople focus on serving consumers who are buying or selling properties, a broker of record serves a different clientele -- the REALTORS® themselves.

Municipal land transfer tax costs Toronto billions

The municipal land transfer tax (MLTT) in Toronto is responsible for a massive loss of economic activity and a corresponding loss of thousands of jobs, according to new research by the Ontario Real Estate Association (OREA).

Hotsheet: Support the Motorcycle Ride for Charity

Revving up their engines, REALTORS® from across the province will be participating in this year’s Motorcycle Ride for Charity.

Market Watch: Financial planning crucial for persons with disabilities

A financial plan can play a pivotal role in easing financial stress for the 3.8 million Canadians with a disability and those caring for them, according to a new report.

Wired Office: Making your home smarter with technology

It used to be that in order to turn a light on or off, you walked over to it and flicked a switch. Since then we have progressed to timers, so if you aren’t home, you can set the lights to go on and off at predetermined times.

Legal Beat: Commercial tenant alleges breach of good faith

Is there a duty at common law to bargain in “good faith”? Various courts in the United States have replied that there is. However, most Canadian courts have responded that there is not.

Technology events in 2014

If you want to stay on the cutting edge of technology in real estate, come to one or more in a series of events offered in the months ahead by the Ontario Real Estate Association.

Foundation announces new name and logo

Cross-cultural competency is good business

May 26, 2014

The ability to work with people of different cultures and backgrounds is not only a good interpersonal skill, but it can also help your business.

Hotsheet: Heart trumps head among buyers - RECO

The heart often overrules the head when it comes to buying a home, according to a new study into the behaviour of Ontario’s home owners released by the Real Estate Council of Ontario (RECO).

Market Watch: CMHC to increase mortgage insurance premiums

Following the annual review of its insurance products and capital requirements, CMHC is increasing its mortgage loan insurance premiums for home owners and rental properties of one to four units, effective May 1.

Campaign launched to stop spread of tax

Preventing the spread of municipal land transfer taxes (MLTT) is the focus of a new advocacy campaign at the Ontario Real Estate Association.

Goal setting in real estate

With the arrival of spring, we are often filled with a sense of renewal. This is an ideal time to assess our business plan and set new goals.

Government examines electronic signatures legislation

Electronic agreements of purchase and sale will mean faster and more convenient transactions for REALTORS® and consumers.

Legal Beat: Signed agreement facilitates payment of commission

The sellers in this case initially tried to sell their home in Ancaster, Ontario by themselves. They subsequently listed it with the REALTOR® on May 6. The commission was 5 per cent and there was a 60-day holdover period.

Find out what your association has been doing for you over the past year. A new annual report from the Ontario Real Estate Association (OREA) outlines the products and services available to you, as well as summarizing association activities over the past year.

Take part in new technology events

If you want to stay on the cutting edge of technology in real estate, come to one or more in an upcoming and popular series of events offered by the Ontario Real Estate Association.

Sponsors contribute to conference success

The OREA 2014 Annual Conference at Toronto’s Westin Harbour Castle Hotel in March was a great success.

Guiding first-time home buyers

April 22, 2014

Buying a home can be a highly emotional experience, and REALTORS® who work with first-time buyers often find themselves tempering their clients’ dreams with a dose of reality.

Hotsheet: NAR conference and expo

Registration opens on May 7 for the 2014 REALTORS® Conference and Expo organized by the U.S.-based National Association of REALTORS® (NAR).

Market Watch: Financial services show progress on women’s issues

Eighty-five per cent of Canadians feel that the financial services industry has made progress in addressing women’s issues, but more work needs to be done.

OREA website engages viewers

A dramatic increase in mobile traffic to the website of the Ontario Real Estate Association (OREA) has occurred over the past year, according to a new report.

Being thorough in your real estate transactions

Thoroughness takes time - a commodity often in short supply in our line of work. The demands on our time, from client meetings and office work to family commitments, can make it difficult for REALTORS® to be thorough.

Legal Beat: Dispute over amount of parking leads to lawsuit

This case deals with the amount of parking provided to a commercial tenant in a shopping mall. The tenant, Farm Boy Inc., operates grocery stores in the Ottawa area and leased space in a mall.

OREA board of directors for 2014

The Ontario Real Estate Association officially installed its new President and Board of Directors at the Annual Assembly Meeting and Leadership Conference from March 4 to 6 in Toronto.

Foundation board of directors for 2014

The REALTORS Care Foundation officially installed its new President and Board of Directors for 2014 at the OREA Leadership Conference in Toronto.

Younger Ontarians value owning home

Home ownership is important to the younger residents of Ontario, according to a new survey conducted by Ipsos Reid for the Ontario Real Estate Association (OREA). In the research, 79 per cent of those surveyed in Generation X

Commercial real estate offers challenges, opportunities

March 21, 2014

REALTOR shows buyers a commercial buildingWalk through any town in Canada and you’ll undoubtedly see signs on lawns and billboards promoting local brokerages.

Flexible remuneration a positive change

REALTOR workingBrokerages will now be able to give consumers more options on how to pay for real estate services.

Hotsheet: CanTech Conference in April

The Canadian Real Estate Technology Conference will take place on Thursday, April 10 at the Metro Toronto Convention Centre, South Building.

Market Watch: Seller’s market predicted in large cities

Conditions for the real estate market across Canada continue to be strong and increasing prices are predicted for the spring market, a new report states.

Customer Service Centre lends a helping hand

If you’ve ever had a question about courses you need or continuing education you wish to pursue in real estate, the Customer Service Centre at the OREA Real Estate College is there to respond.

Legal Beat: Seller’s remorse occurs after rumours of demolition

The house owner in this case sold her property for $1.7 million and then changed her mind. Her major complaint was that she learned that the buyer might demolish the house.

Home inspectors should be regulated

The Ontario home inspection industry should be regulated, according to the Ontario Real Estate Association.

Thunder Bay board turns 100

The Thunder Bay Real Estate Board is celebrating its 100th birthday in 2014.

Leave emotions out of negotiations

February 21, 2014

Negotiating in real estate can be difficult when emotions get in the way.

Campaign boosts public perception of REALTORS®

Realtor shows professional man a property on left side of campaign posterAn exciting new ad and media relations campaign has enhanced the public perception of REALTORS®, recent surveys reveal.

Hotsheet: Land and development conference in Toronto

The 10th annual Land & Development Conference will take place on May 13, 2014 at the Metro Toronto Convention Centre, North Building.

Market Watch: Canada to benefit from a strengthening U.S. economy

Canada’s economy is expected to perk up in 2014, supported by an increase in exports and strengthening business investment, according to a new report.

Estimating the value of a heritage property

Valuing a heritage home requires certain specialized skills.

Legal Beat: Prove you took reasonable steps to fulfill terms

A typical OREA conditional clause may include the following words: “Unless the buyer gives notice in writing delivered to the seller personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule

Optimism about market, economy

Ontarians seem hopeful about the provincial real estate market, according to new research conducted by the polling firm of Ipsos Reid for the Ontario Real Estate Association (OREA).

The Ontario Real Estate Association’s Open Forum, Annual Assembly Meeting and REALTORS Care Foundation Annual General Meeting will take place on Wednesday, March 5 at the Westin Harbour Castle Hotel in Toronto.

Stressed out: Managing workplace stress

January 26, 2014

In today’s go-go-go world, where wireless connections allow for instant communication any time of day or night, no-one is immune to stress from the fast pace of life.

STRESS BUSTING TIPS:

Be aware of your stressors and take the following preventative steps:

Tools and technology series a hit

The demand for skills and knowledge of tools and technology in real estate continues to grow, according to organizers of a new series of events offered this past fall by the Ontario Real Estate Association.

Carbon monoxide detectors to be mandatory in homes

The Ontario legislature recently passed a bill to make carbon monoxide detectors mandatory in homes across the province.

Market Watch: Tighter inventory for commercial property

While unprecedented levels of demand were reported for commercial real estate in key Canadian markets in 2013, a shortage of available product continues to hamper sales activity virtually across the board,

Wired Office: Out with the old, in with the new

Interested in earning some quick cash (or gift cards)? It’s as easy as gathering up your old technology and selling it or trading it in.

Legal Beat: Words matter in agreements and can lead to litigation

Updates to forms and clauses for 2014.

The Standard Forms Committee of the Ontario Real Estate Association (OREA) has approved the revisions and creation of new forms and clauses for 2014.

Time management in real estate

December 7, 2013

In the fast-paced world of real estate, time management is more important than ever.

Time management technology tips

Take a basic computer course to learn more about how to operate your system. If something goes wrong, there’s a greater likelihood that you’ll have some idea of what to do.

Lobbying for personal real estate corporations

In Ontario, real estate salespeople are among the few regulated professions that are not permitted to incorporate under current laws.

Hotsheet: Green real estate conference

Although robust economic conditions have not yet returned across North America, market interest in greening new and existing buildings is at an all-time high.

Market Watch: 2014 housing starts to remain stable: CMHC

Canada Mortgage and Housing Corporation (CMHC) expects total housing starts to be stable in 2014, as fundamentals such as employment growth and migration continue to support the Canadian housing market.

Building a client base in real estate

As a REALTOR®, I am always thinking about my client base – how to build it and how to maintain it.

Legal Beat: Two sets of buyers leads to court case

In this case that took place in the United States, an Ohio couple wanted to buy a house.

Call for candidates - OREA

Interested in running for a position on OREA’s 2014 board of directors? The following positions are up for election

Interested in running for a position on the Foundation’s 2014 board of directors? The following positions are up for election

Amendments: Second thoughts on the APS

November 12, 2013

An amendment – a change to one or more terms in an agreement – is a tool commonly used in real estate.

Media successes in REALTOR® value campaign

This fall marks the launch of an exciting new campaign to promote the value of REALTORS®.

Hotsheet: Conversations before living together

Moving in together is a big step in any relationship, and RE/MAX has provided some suggestions of discussions that couples should have before taking the plunge.

Market Watch: Online is where it's at for small business

Canadians choose small businesses based largely on how those firms use technology, according to a survey by TD Canada Trust.

Wired Office: Sharing is caring with social media

Social media is many things. It is about conversations, storytelling and relationship building through the sharing of useful content. This column focuses on how to share content.

Legal Beat: Driving log would add evidence to tax appeal

In this case, the appellant is a self-employed residential REALTOR® working with RE/MAX who was remunerated on a commission basis.

The Ontario Real Estate Association will hold its 2013 Political Affairs Conference (PAC) from Nov. 26 to 28 at Toronto’s Courtyard Marriott Hotel.

Dealing with difficult clients

October 11, 2013

Dealing with challenging clientsDifficult clients can drain you of time and energy and compromise other transactions.

An exciting new advertising campaign to promote the value of REALTORS® has been launched by the Ontario Real Estate Association.

Record property damage claims after summer flood

More than $850 million in insurance claims have been filed following property damage caused by the intense record rainfall and flash floods in Ontario that occurred on July 8, the Insurance Bureau of Canada (IBC) reports.

Market Watch: U.S. foreclosures down from last year

Foreclosure inventories fell 32 per cent in July compared to the previous year, another sign that the foreclosure crisis in the U.S. may finally be over, according to the latest foreclosure report released by CoreLogic and posted to the newsroom of the National Association of REALTORS® (NAR).

RECO: Unsupervised access to seller’s home

Legal beat: increase in development fees passed on to buyer.

Ontario municipalities charge builders and developers fees for things such as building permits and development costs.

The Ontario Real Estate Association will hold its 2013 Political Affairs Conference (PAC) from Nov. 26 to 28 at Toronto&rsquo;s Courtyard Marriott Hotel.

Learn more about social media

If you want to learn more about using social media, you can take part in a free webinar series hosted by the Ontario Real Estate Association (OREA) and the Toronto Real Estate Board (TREB).

Take part in technology events

If you want to stay on the cutting edge of technology in real estate, come to one or more events being offered this fall by the Ontario Real Estate Association.

FINTRAC compliance: Know your responsibilities

September 9, 2013

Enduring a FINTRAC audit takes time and effort, but failure to comply can have serious consequences for you and your brokerage.

First anniversary of service for OREA members

A new service was launched a year ago for members of the Ontario Real Estate Association (OREA) who are the subject of a complaint to the industry’s regulator, the Real Estate Council of Ontario (RECO).

Canadian Apartment Investment Conference

Investors, developers, managers and owners may be interested in the 2013 Canadian Apartment Investment Conference happening on Tuesday, Sept. 24 at the Metro Toronto Convention Centre.

Market Watch: Baby boomers look to downsize

A majority of REALTORS® say their clients between the ages of 48 and 67 are searching for smaller properties, according to a June survey.

Take part in new technology events across Ontario

If you want to stay on the cutting edge of technology in real estate, come to one or more in a series of events offered this fall by the Ontario Real Estate Association.

iCollege courses: Affordable and informative

How much do REALTORS® know about the Buyer Representation Agreement, the Listing Agreement, and the National Do Not Call list?

Legal Beat: Verbal agreement doesn't hold up in court

Should the courts allow parol evidence in the context of a written agreement?

Watch for ad campaign

The value of using a REALTOR&reg; is at the heart of an exciting new advertising and media campaign being launched by the Ontario Real Estate Association (OREA).

Motorcycle riders put the rubber to the road this past July to raise funds for the REALTORS Care Foundation.

Enrol in leadership workshop

You can earn two Continuing Education credits by enrolling in a Leadership 200 workshop being offered in class on Friday, Sept. 27 at the Ontario Real Estate Association (OREA) office in Don Mills.

Misleading advertising and how to avoid it

August 9, 2013

Advertising matters in real estate -- it can be a powerful tool to attract clients.

Summer energy saving tips for home owners

Take steps to make your home or cottage cool, comfortable and sustainable this summer since energy efficiency is always in style, says Phil Dorner, president of the Ontario Real Estate Association.

Gen Y still wants to own homes

Generation Y -- those individuals born between 1980 and 1994 -- still want to own a home despite the challenges, according to a survey.

Market Watch: Six in 10 GTA home owners plan to buy again

Real estate prices continue to rise, but a new poll says that hasn’t damaged home owners’ belief in the market in the Greater Toronto Area.

Wired Office: Useful apps for real estate professionals

Most people with smartphones and tablets take advantage of their devices by installing apps that provide them with up-to-the-minute weather and news reports, improve productivity or just for fun. Admittedly, some apps are more useful than others.

Legal Beat: Faulty valve leads to breach of contract and lawsuits

The parties entered into an agreement of purchase and sale on this high-end B.C. property with a closing date no later than Oct. 20, 2008.

Leadership Now e-newsletter

July 5, 2013

If you’d like to learn more about volunteering and leadership, check out the new electronic newsletter produced by the OREA Centre for Leadership Development.

Our graduates speak for themselves

Listen to what our graduates are saying about their experiences at the OREA Real Estate College and why it is a great place to learn.

Watch for fall OREA events

Stay on the cutting edge of technology in real estate by attending a series of events being organized this fall by the Ontario Real Estate Association.

Support the Motorcycle Ride for Charity

It’s not too late to pledge your support for this year’s Motorcycle Ride for Charity.

Website improvements at OREA

The Ontario Real Estate Association (OREA) website continues to evolve to meet the needs of our students and members.

Safety is paramount for swimming pool owners

June 5, 2013

Ten seconds is all it takes for someone to drown.

Tips for owners of backyard pools

Vigilance - Never leave a child alone near water, not even for a second. Don’t be distracted by a ringing phone, doorbell, task or another child.

In the swim: Pools and real estate

If you’re selling a home with a swimming pool, be sure your buyer is aware of the risks and responsibilities as well as the benefits.

Housing starts moderate: CMHC

Monthly housing starts in Canada totalled 182,754 units compared to 188,369 a month earlier, according to a news release from the Canada Mortgage and Housing Corporation.

Market Watch: Low interest, flattening prices support market

Canada’s housing market is being supported by an unprecedented combination of low interest rates, flattening house prices and a strengthening economy, according to a recent survey.

RECO decision: Illegible document leads to complaint

Merger of two boards announced.

Two Ontario real estate boards have announced their merger following a membership vote on April 17.

Legal Beat: Disclosing presence of sexual offender in neighbourhood

Questions sometimes arise in real estate about how to deal with the sale of a property in the neighbourhood of a convicted sex offender.

Electronic real estate transactions

The Ontario Real Estate Association (OREA) successfully advocated for a legislative amendment to the Electronic Commerce Act, 2000, that would facilitate faster, smoother real estate transactions.

Attention to detail crucial at open houses

May 5, 2013

First impressions can apply to property as well as people.

Enhancing electronic real estate transactions the goal of lobby efforts

Electronic agreements of purchase and sale save time and money for consumers and REALTORS®.

NAR conference and expo

Registration opens on May 6 for the 2013 REALTORS® Conference & Expo organized by the U.S.-based National Association of REALTORS® (NAR).

Market Watch: First-time buyers still a force

Four in 10 Canadians who plan to enter the housing market in the next two years are first-time buyers, according to a new poll.

Wired Office: Tell your story visually with infographics

Example of a word cloudA picture is worth a thousand words, which helps explain the growing popularity of infographics (information + graphics).

Marijuana grow-op registry supported by OREA

The creation of a province-wide registry of homes that were former marijuana grow operations or clandestine drug laboratories is the goal of a bill introduced in the provincial legislature and supported by the Ontario Real Estate Association (OREA).

Research provides snapshot of REALTORS®

A new survey by the Ontario Real Estate Association (OREA) offers a snapshot of the association&rsquo;s members across the province.

Legal Beat: Confusion over condo boundaries leads to decade of litigation

The buyer in this case bought a condominium unit in Toronto. She was under the impression that the unit comprised three floors, from the basement floor up to the ceiling of the third floor of a townhouse complex.

Find out what your association has been doing for you over the past year.

Stay connected with OREA app

Get up-to-the-minute news on the real estate industry that you can easily share through the free OREA application for iPhone and iPad.

Single parenting a challenge in real estate

April 5, 2013

Working in real estate is a challenge at the best of times, but combining it with single parenthood is even more daunting.

Foundation supports worthy causes

Many people are not aware of all of the charitable work and volunteer time that REALTORS&reg; contribute to worthy causes.

Many boomers don‘t plan to downsize: survey

Despite the perception that aging baby boomers may create a glut of traditional single-family homes as they downsize into smaller residences, a new survey shows that demand for suburban detached homes remains strong among those born between 1947 and 1966.

Market Watch: Housing starts show moderation

Housing starts in Canada totalled 195,087 units in February, revealing a moderation in demand for housing that means builders are adjusting accordingly, according to a recent news release from the Canada Mortgage and Housing Corporation.

Taking your website from static to standout

Taking your website from static to “standout” was the subject of a talk I heard recently in New York. Nicole Nicolay (@nik_nik), founder of Agent Evolution, spoke about ways to transform your website from the same old static venue into something that stands out from the rest and helps generate more business leads.

Legal Beat: Plenty of blame to go around in RECO case

This situation involved two salespeople who worked at the same brokerage.

New OREA 2013 board of directors

The Ontario Real Estate Association officially installed its new President and Board of Directors at the Annual Assembly Meeting on March 6.

Duty of care to clients and customers

March 5, 2013

The difference between a client and a customer is a crucial one in real estate.

RECO announces changes to mandatory continuing education

The Real Estate Council of Ontario (RECO) recently announced changes to the way that mandatory continuing education is delivered to real estate registrants in the province, effective Aug. 1.

Shoe cover dispensers keep floors clean

If you want floors and carpets to stay clean at open houses, an automatic shoe cover dispenser may interest you.

Market Watch: Brief mild correction forecast

Fewer homes are expected to trade hands in the first half of 2013, which should slow the pace at which home prices rise, according to a new survey.

My first steps as a REALTOR® and working mom

When I started working as a real estate administrator, I was 19 years old, didn&rsquo;t own property and definitely didn&rsquo;t have kids. I had a nine-to-five job and was ready to take on the world.

Tax credit supports accessibility for seniors

A tax credit for modifications to help Ontario seniors make modifications in their homes to improve accessibility is now available.

Legal Beat: Property tax dispute leads to appeal court

The owner of a Toronto apartment building appealed his property tax assessment. Before the city made a decision on the taxes, he sold the property.

Items can be viewed before voting

Members of the Ontario Real Estate Association who wish to examine proposed amendments to the OREA By-law prior to the Annual Assembly meeting can access the material on the OREA website.

OREA events in March

The OREA Open Forum, Annual Assembly Meeting and REALTORS Care Foundation Annual General Meeting will take place on Wednesday, March 6.

OREA website a hit

The OREA website continues to attract more viewers with features that make it faster and easier to find what you need.

Winter's tale: When the money isn't coming in

February 18, 2013

If you’re used to a regular paycheque, working for commission can be a big adjustment.

REALTORS® are home owners too

Most REALTORS® (88 per cent) surveyed for recent OREA research own their own homes.

Market Watch: Fewer mortgages in arrears: CMHC report

As a result of prudent mortgage lending practices, the number of mortgages in arrears in Canada has been trending downward, according to a report released recently by Canada Mortgage and Housing Corporation (CMHC).

App provides easy access to OREA services

iPhone with OREA appA dynamic new mobile application has been launched by the Ontario Real Estate Association.

Wired Office: Pinterest for business

Pinterest is a virtual bulletin board that lets you organize and share all the beautiful things you find on the web.

Legal Beat: Home renovation not substantial enough for rebate

After being denied a tax rebate for a home renovation, this Quebec taxpayer appealed. He had applied for a GST rebate through a program that enabled home owners to recoup some costs for work on a new residential complex or one that had undergone substantial renovation.

The OREA Open Forum, Annual Assembly Meeting and REALTORS Care Foundation Annual General Meeting will take place on Wednesday, March 6, 2013.

Leadership podcasts available

Gain valuable insights into leadership in just five minutes. Podcasts featuring a variety of renowned speakers and authors are now available for you to hear in short segments via the Ontario Real Estate Association website.

Thriving Young Professionals Network

The Young Professionals Network (YPN) at the Ontario Real Estate Association continues to grow.

Preparing for the booming seniors' market

January 24, 2013

The baby boom generation forms a demographic bulge that has reshaped society as it passed through.

Stopping the municipal land transfer tax

Municipalities in Ontario are gearing up to force the province to grant them the authority to charge a municipal land transfer tax (LTT) on home buyers.

Insuring a heritage home can be challenging

The market for heritage homes – although not as frenetic as the condo boom -- has rapidly gained interest in recent years.

Tablet ownership on rise

Almost half of REALTORS® (47 per cent) own a tablet computer, and nearly 62 per cent said they plan to buy one within the next two years.

MarketWatch: Slight improvement in affordability

Canada’s housing market became more affordable as a result of modest declines in home prices and further gains in household incomes, according to a new report.

Ontarians want to know home’s grow-op history

An overwhelming majority of Ontario residents (93 per cent) want to know if the home they plan to buy was once a marijuana grow-op or clandestine drug lab, a new survey reveals.

Legal Beat: Document in commercial case means what it says

The owners of a hotel first listed their property for sale with a RE/MAX brokerage, where Angelo Muraco worked as their REALTOR®. Although several potential buyers expressed interest, no sale occurred.

The OREA Open Forum, Annual Assembly Meeting and REALTORS Care Foundation Annual General Meeting will take place on Wednesday, March 6 at the Sheraton Centre Hotel, 123 Queen Street West, Toronto.

Motorcycle ride supports charity

The Motorcycle Ride for Charity organized by the REALTORS Care Foundation has now raised more than $30,000.

Video promotes volunteering

A new video to help your real estate board recruit new volunteers has been developed by the OREA Centre for Leadership Development.

Foundation brochure highlights good work

A new brochure has been published highlighting the good work of REALTORS® in fundraising for charities and shelters in Ontario.

Warning signs of potential real estate fraud

December 5, 2012

It may be as simple as falsifying information on a mortgage application.

New videos promote REALTOR® value

Two videos that promote the value of using a REALTOR® have been created by the Ontario Real Estate Association (OREA).

Entrepreneurs plan to hire

More Canadian entrepreneurs are planning to hire employees this year, according to a new survey.

MarketWatch: Prices up but sales fall

Canadian prices have edged up but the number of house sales has fallen compared to the same period last year, according to a recent survey.

Lifestyle marketing: The next big thing

When we sell a property, our product is not just four walls and a roof.

Identity theft hits real estate professional

User-friendly upgrade for webforms®.

Ontario real estate salespeople and brokers who use WEBForms® should watch for upgrades to this product in the new year.

Value for your OREA dues

The $110 per year that you pay to the Ontario Real Estate Association (OREA) enables you as a member to receive products and services that are most important to you.

Legal Beat: Failure to communicate leads to botched deal

This Ontario deal was supposed to close on July 27, but the transaction failed to close. The seller resold the property and sued the buyer for losses of $28,000.

Updated forms and clauses will soon be available on the Ontario Real Estate Association website.

Last call: It’s our birthday and you get the gifts

The OREA Real Estate College is offering every member a free nine-credit bundle of Continuing Education online courses.

Is anyone there? Vacant possession and the APS

November 15, 2012

Vacant possession & the APSThe concept of vacant possession is sometimes glossed over by real estate practitioners, but you ignore it at your peril.

Sellers want to understand market and legal processes

Beyond worrying about the state of the real estate market, Ontarians are most concerned about understanding the process and legal documents when selling a home, a new survey reveals.

Preparing for severe weather

Severe weather and hurricanes can have a devastating impact on communities and homes, according to the Insurance Bureau of Canada, which follows developments related to severe weather across the country.

MarketWatch: Farmland prices reach new heights

The value of Canadian farmland continues to reach new heights, according to the RE/MAX Market Trends Report, Farm Edition 2012.

Wired Office: Tips to keep your online passwords safe

We often hear that “strong” passwords are an important part of keeping our online transactions safe.

Join research panel for chance to win $1,000

Share your voice and let us know what the Ontario Real Estate Association can do for you.

New OREA mobile app to be launched

A dynamic new mobile application is being developed by the Ontario Real Estate Association.

Legal Beat: Multiple representation and the dangers of duality

While working on Legal Forum, I received the following question from a REALTOR® on an issue related to multiple representation, formerly known as dual agency.

Call for candidates – Ontario Real Estate Association

Interested in running for a position on OREA’s 2013 Board of Directors?

Call for candidates - REALTORS Care Foundation

Interested in running for a position on the Foundation’s 2013 Board of Directors?

National customer service week

The Ontario Real Estate Association joined thousands of companies around the world to participate in National Customer Service Week.

Political affairs conference

The Ontario Real Estate Association is holding its Political Affairs Conference (PAC) this month.

It’s our birthday and you get the gifts

Csae volunteer award.

Dinaz Garda, CAE, manager, executive office operations at OREA, has been honoured with the 2012 President’s Award from the Trillium Chapter of the Canadian Society of Association Executives (CSAE).

Form frenzy: Waivers mistakenly used over fulfillments

October 12, 2012

In the heat of real estate deals, changes to documents often happen quickly in a flurry of pen strokes.

Buyers prize safety, value, location

Safety, perceived value and a location close to shopping or transportation are the most important factors Ontarians consider when buying a home, according to a new survey.

Rookie mistakes by first-time buyers

The majority of buyers say they would have done some things differently after purchasing a home, according to a new survey.

MarketWatch: National housing market at tipping point

The average price of a home in Canada increased year-over-year between 3.3 and 5.5% in the second quarter of 2012, according to The Royal LePage House Price Survey and Market Survey Forecast.

Political affairs conference focuses on three issues

November is fast approaching, and so is OREA’s Political Affairs Conference (PAC).

RECO decision: Absence of seller leads to problems

Podcasts on leadership available to members.

Podcasts on leadership available to OREA membersYou can gain valuable insights into leadership in just five minutes.

Legal Beat: No deal and no commission without clear title

In a typical real estate transaction, the sellers must provide clear title on closing. The OREA agreement of purchase and sale (APS) says:

New service for OREA members

A member of OREA who is the subject of a RECO complaint can now speak with OREA lawyer Diana Russo, who will provide legal information on the RECO investigative and adjudicative process.

Foundation gala supports good cause

The REALTORS Care Foundation will host a gala on Saturday, Oct. 20 at the Premiere Ballroom & Convention Centre in Richmond Hill, north of Toronto.

Charity golf tournament raises $8,000

Local REALTORS® from the Rideau-St. Lawrence Real Estate Board raised more than $8,000 in a golf tournament that they donated to five food banks in the area.

Married to it: Real estate spouses must juggle schedules

September 4, 2012

When her husband started his real estate career, Elaine Rocca recalls that he worked most evenings and was often out until 1 and 2 a.m. presenting offers and getting established in the field.

Movement toward mergers in some real estate boards

Real estate in cottage country often attracts more attention in warmer months, but this year several areas piqued the interest of more than just consumers -- real estate professionals were watching closely too.

New registrar announced by RECO

The Real Estate Council of Ontario (RECO) announced the appointment of Joseph (Joe) Richer as its next registrar, effective Sept. 17.

Focus on global property investment

The seventh annual Global Property Market Conference offers a unique, targeted opportunity for strategic information and networking on investment and development around the world.

Market Watch: Canadians support small business: survey

An overwhelming majority of Canadians (94 per cent) believe small businesses play a crucial role in the economy’s growth and almost nine in 10 view them as vital job creators, according to a new survey.

Legal Beat: Once it's sold, it's sold

The law indicates that on the date the bank signs an unconditional agreement of purchase and sale with a buyer, the original borrower has no further legal right to pay off his mortgage.

Political affairs conference in November

The Ontario Real Estate Association will hold its 2012 Political Affairs Conference (PAC) from November 20 to 22 at Toronto’s Courtyard Marriott Hotel.

Watch for upcoming YPN events

Several events are being planned this fall by the Young Professionals Network (YPN) at the Ontario Real Estate Association.

Motorcycle riders braved extreme heat this past July to participate in the Motorcycle Ride for Charity that left from the Ontario Real Estate Association’s Don Mills headquarters.

It's our birthday - and you get the gifts

Kwar celebrates 75th anniversary.

The Kitchener-Waterloo Association of REALTORS® (KWAR) is celebrating its 75th anniversary this year. Formed in 1937, the association now represents more than 1,200 real estate professionals and is the 15th largest real estate association in Canada.

Respect the client relationships of other brokerages

August 8, 2012

Do unto others as you would have them do unto you.

Interview with outgoing RECO registrar

After 10 years as registrar at the Real Estate Council of Ontario (RECO), Allan Johnston is retiring at the end of July.

Market Watch: Renters may make cottages affordable

A recent Royal LePage national survey shows that potential cottage buyers and those already in the market have different plans for generating income.

Ride the waves at 2012 RealREIT

The 2012 RealREIT (Real Estate Investment Trust) Conference takes place on Sept. 19 in Toronto.

Wired Office: Pin your hopes on Pinterest

Even if you aren’t yet a user of Pinterest, you’ve likely heard of it. Similar to a corkboard or bulletin board, this electronic locale allows you to “tack” or “pin” visuals and text to view and share with others online.

It’s our birthday -- and you get the gifts!

Celebrating OREA's 90th BirthdayThe OREA Real Estate College is offering every member a free nine-credit bundle of Continuing Education online courses.

Legal Beat: Buyer presented no evidence of water problem

The action arose after a house was purchased by the plaintiff, Ms. H. Graham in the City of West Quinte in 2002.

Letter to the editor

I really liked the article, “Keep clothing professional” that appeared in REALTOR® EDGE’s June issue. I’d like to add a couple of points:

Proposal supports electronic transactions

A private member’s bill that would facilitate the use of electronic agreements of purchase and sale for real estate transactions was introduced recently in the provincial legislature, and the concept has been endorsed by the Ontario Real Estate Association (OREA).

Newmarket brokerage wins team spirit award

For the fourth consecutive year, the Newmarket Century 21 Heritage Group has won the team spirit award for the Heart & Stroke Foundation’s York North BIG Bike fundraiser.

The Young Professionals Network (YPN) at the Ontario Real Estate Association has hosted several successful events recently, and more are scheduled in the future.

REALTOR® value videos win more awards

Two OREA videos that highlight the value of using a REALTOR® have won several awards recently.

June 11, 2012

Image of scales of justiceLegal Forum, one of the most popular features on the Ontario Real Estate Association’s website, has received its 5,000th question.

Keep clothing professional even in summer

As the weather warms up, hemlines seem to get shorter, necklines get lower and toes begin to make public appearances.

Commercial real estate conference in Ottawa

Discover what’s new in the commercial real estate industry at BOMEX, the Building Owners and Managers Association annual conference and exhibition, to be held Sept. 11 to 13 at the Westin Ottawa Hotel.

Market Watch: Ontarians positive about housing market

A house or condo is a good investment, according to nine out of 10 Ontarians, who show more confidence in real estate than those surveyed in other Canadian regions, according to the 19th annual RBC Homeownership Poll.

Find your unique value proposition in real estate

In order to stand out in the real estate industry, you need to find your UVP.

Legal Beat: Buyers ignored red flags, judge rules

The buyers did not have enough money on the closing date of July 6, 1999, to complete their deal. Their REALTOR® lent them $74,500.

REALTOR® value videos win prestigious award

Two OREA videos that highlight the value of using a REALTOR® won a silver medal from the Canadian Public Relations Society (CPRS) recently.

Electronic workshops offered to OREA members

If you’d like to take some professional development on leadership but are short on time or travel funds, a new eWorkshop format may be right for you.

Call volume up over last year

The volume of phone calls into the Customer Service Centre at OREA is up about 11 per cent over the same quarter last year, according to recent figures.

Motorcycle ride for charity leaves from OREA

Registration is now taking place for the Motorcycle Ride for Charity organized by the REALTORS Care Foundation.

RECO online transfers and terminations

The Real Estate Council of Ontario has launched a new service that allows online transfers and terminations.

OREA achieves national green status

May 6, 2012

The Ontario Real Estate Association has been awarded a prestigious national designation for outstanding environmental efforts.

Ask questions about UFFI in real estate transactions

Although the number of homes containing UFFI (urea formaldehyde foam insulation) has declined greatly in recent years, many real estate documents still take into account the existence of this controversial substance.

On the Markets: Optimism over economy declines, says survey

Ontarians were among the most optimistic in the country about the national economy two years ago, but their outlook has been sliding and they are now among the least optimistic, according to a recent survey.

Check water damage coverage, IBC urges

With warmer-than-normal temperatures occurring in many regions over the past winter, the Insurance Bureau of Canada (IBC) is encouraging Canadians to ensure that they have adequate water damage protection on their home insurance policies.

Market Watch: Continued higher house prices predicted

Ontario’s economic prospects for the next three years include moderate growth and continued high unemployment as government spending is cut and businesses expand carefully.

RECO Decision: Early birds break the rules

Legal beat: telephone discussion not an agreement, judge rules.

In this case, a REALTOR® sued for $1.25 million for commission related to undeveloped land sold for $29 million following the death of a farmer and landowner.

Annual report distributed around Ontario

The new annual report of the Ontario Real Estate Association has been published and distributed to real estate boards across the province.

Motorcycle ride for charity in July

Oreapedia adds new topic.

A new topic, Respect Client Relationships, has now been posted to OREApedia.

Fans of Facebook

More than 2,500 people now “like” the OREA Real Estate College Facebook page, the college reported.

Do your homework when choosing a mover

April 3, 2012

For some consumers, the most daunting aspect of the buying or selling process is the move itself.

Tapping into a trillion dollar boomer market

The baby boomers are flexing their demographic muscle once again.

New website dedicated to commercial title insurance

Canada’s largest insurer of commercial titles, First Canadian Title, recently launched a website designed specifically for the commercial real estate market.

Market Watch: Steady as she goes in year ahead

Housing markets are expected to remain steady in 2012 and 2013, according to the latest Canada Mortgage and Housing Corporation (CMHC) Housing Market Outlook.

Legal Beat: Trans-Atlantic meeting leads to lawsuit

The original meeting took place in England, where an Ontario real estate professional was participating in an emigration fair.

New board of directors at OREA

A new board of directors was installed for 2012 at the annual OREA leadership conference in Toronto.

Change of address for RECO

The Real Estate Council of Ontario (RECO) has moved office locations, as of March 26.

RECO candidates invited to OREA area meetings

Candidates running for a seat on the RECO board of directors are invited to attend an upcoming OREA area meeting.

The ABCs of prospecting techniques

March 4, 2012

In Glengarry Glen Ross, a movie based on the play by David Mamet, motivational salesperson Blake confronts the employees of a Chicago real estate office about their less than stellar performances.

OREA celebrates 90th anniversary

Back in 1922, a loaf of bread cost 12 cents and a pound of butter set you back about 70 cents.

Wired Office: Google+ your business

A few months ago, here in the Wired Office column in REALTOR® EDGE, you read about Google+, which is yet another social media platform that enables people to connect on the Web.

Land and development conference in May

Learn about development strategies, challenges, opportunities and risks as well as where land values in the Greater Golden Horseshoe are heading at the Real Estate Forum’s Land and Development Conference on May 1 at the Metro Toronto Convention Centre.

Market Watch: Price correction unlikely: report

House prices are expected to continuing going up across the country despite some high-profile reports to the contrary, a new survey reports.

Young Professionals Network invites members of all ages

More than eight out of 10 REALTORS® in the province are 40 years of age or older, according to a recent survey by the Ontario Real Estate Association.

Legal Beat: Advertising should be current and reflect reality

The developer in this Alberta case marketed land that was not yet subdivided.

Call for RECO board nominations

Members of the Real Estate Council of Ontario who are interested in serving on its 2012 board of directors are required to submit their nomination forms by Monday, April 2 no later than 2:00 p.m.

New price index launched by CREA

The Canadian Real Estate Association has launched the MLS® Home Price Index, in partnership with: the Toronto Real Estate Board, Real Estate Board of Greater Vancouver, Fraser Valley Real Estate Board,

Leadership education ranked outstanding

The OREA Centre for Leadership Development is the only one of its kind in North America, providing comprehensive, phased-in training to volunteer association leaders.

Slow seasons in real estate call for business plan

February 7, 2012

It’s a field known for seasonal ups and downs and market shifts.

Holdover clause is an ounce of prevention

Although many OREA standard clauses are designed to protect your clients, the holdover clause in a listing agreement was specifically created to protect REALTORS® by ensuring that you receive the commission you’ve earned if a house sells.

Conference focuses on going green

The Real Estate Forum’s Green Real Estate conference will examine the economics, benefits and value of green buildings.

Market Watch: Stable resale market predicted

Ontario housing demand is expected to slow in the coming months due to fewer first-time buyers and a modest pace in economic and job growth, says a recent CMHC report.

On the Markets: Retiring baby boomers may generate activity

Forty per cent of baby boomers in Ontario plan to move for their retirement, but many are waiting to sell their homes in the hope that values will increase, according to a recent report.

RECO: Registrant fails to check status of listing

The following decision from RECO Discipline and Appeals Hearings has been condensed. All names have been changed.

Legal Beat: Case illustrates how not to represent a buyer

This case involved the sale of a Niagara Falls motel. The registrant, Neelam Bhalla and her brokerage, Sutton Group Results, acted in a multiple representation (dual agency) situation in the sale of the motel by Surma, the seller, to the buyers.

Donation to human rights museum

Ontario REALTORS® have made a significant contribution to human rights with a donation of $55,000 to the Canadian Museum of Human Rights in Winnipeg, Manitoba.

Assembly Meeting open to members

All members are invited to attend the OREA Annual Assembly Meeting on Wednesday, February 29 at Toronto’s Sheraton Centre Hotel, 123 Queen Street West.

Foundation Meeting open to members

Immediately following the OREA Annual Assembly Meeting (see previous item) on February 29 will be the first REALTORS Care Foundation Annual General Meeting and elections for the foundation board of directors,

Leadership speakers featured at conference

The 2012 OREA Leadership Conference takes place from Feb. 28 to March 1 and features various motivating speakers at the event at Toronto’s Sheraton Centre Hotel.

Whose side are you on anyway? Multiple representation is a complex scenario

January 7, 2012

Representing more than one party in the same deal is a challenging scenario in real estate.

Advertising guidelines simplified by RECO

Issues related to advertising in real estate were among the most common complaints about registrants to the Real Estate Council of Ontario over the past year, according to the council’s 2010-2011 annual report.

New and revised forms for 2012 from OREA

Standard forms produced by the Ontario Real Estate Association play an important role in the day-to-day business of brokers and salespeople across the province.

Legal Beat: Use appropriate forms to avoid litigation

This case raises the issue of whether a real estate brokerage is entitled to a portion of the commission from the listing brokerage after a commercial sale when a Confirmation of Co-operation and Representation (OREA Form 320) has not been signed.

Mortgage broker re-licensing education

Licensed mortgage brokers or agents in Ontario will need to take an approved re-licensing (RE) course in order to renew their licenses by March 31, 2012.

Market Watch: Farmland prices on the rise

Rising agricultural values and tight inventory have pushed the price of Ontario farmland up significantly in the past year, according to RE/MAX Ontario-Atlantic Canada.

Immediately following the OREA Annual Assembly Meeting (see item above) on February 29 will be the first REALTORS Care Foundation Annual General Meeting and elections for the Foundation board of directors, with real estate boards being the voting members.

Become a better salesperson by honing your skills

December 3, 2011

You knew this going in – you need certain skills to be a successful real estate salesperson.

A new and better website at OREA

The Ontario Real Estate Association website has undergone a major renovation.

Wired Office: What to look for in an e-Reader

The wind is howling and the snow is falling. Safe and cozy indoors with a warm fire roaring in the fireplace, you are curled up in your favourite chair, happily reading your… ebook.

Home Ownership Matters campaign a success

The Ontario Real Estate Association hit the campaign trail during this fall’s provincial election with the Home Ownership Matters initiative.

Customer service the focus of accessibility law

Did you know that, as of January 1, 2012, a new law takes effect? The Customer Service Standard of the Accessibility for Ontarians with Disabilities Act (AODA) is part of a goal to make Ontario completely accessible for persons with disabilities by 2025.

Market Watch: Real estate professionals anxious over future

Canadian real estate professionals are increasingly anxious about prospects for the next year, as a sector that has led the country’s economic recovery shows signs of slowing along with the broader world economy.

RCMP launches grow-op strategy

Addresses of Canadian homes containing dismantled marijuana grow-ops will now be listed on the RCMP website as part of the National Grow Initiative.

Legal Beat: Title insurance can be a deal saver

A typical Ontario Agreement of Purchase and Sale (APS) requires that the sellers provide clear title on a property, subject to the stated matters that buyers accept.

OREApedia a terrific resource

January 3, 2011

Fifty-four real estate topics are now posted to OREApedia.

Handling stress in the field of real estate

November 3, 2011

Experiencing stressStiff competition, erratic hours, and an uncertain income are just a few of the reasons that a career in real estate can be stressful.

Reaching an agreement: Learn the essentials of the APS

One of the most important forms used in real estate on a regular basis is the Agreement of Purchase and Sale (APS).

RECO Decision: Marijuana grow-op not disclosed

On the markets: house prices rally due to low rates, stable economy.

The average price of a home in Canada increased between 5.7 and 7.8 per cent in the third quarter of 2011, compared to the previous year, according to a recent Royal LePage report.

LEGAL BEAT: Students in townhouse complex violate family provisions

A North Bay condominium corporation brought an application against the owners of townhouse units to enforce the terms of the declaration and bylaw registered many years ago.

Commercial real estate investment conference

The 2011 Real Estate Forum promises a hard-hitting and information-packed two days.

MARKET WATCH: Canadian real estate outperforms in developed world

Canada’s housing market stands out among developed world nations for its resilience and longevity, according to a recent report by Scotia Economics.

Interested in running for a position on OREA’s 2012 Board of Directors?

In February 2011, the voting members of the REALTORS Care Foundation passed the revised REALTORS Care Foundation Bylaw.

Break out of the mould: Watch for mould and water damage in homes

October 3, 2011

It’s a scenario you dread: You’re showing your clients the home of their dreams. Every room is better than the last and they’re falling in love with the place, when suddenly they recoil in horror and beat a hasty path to the door. The culprit? The harsh spectre of mould.

Doing business under the Do Not Call legislation

In a profession that relies on cold calls and consumer contacts, the national Do Not Call List may seem like an impossible roadblock for real estate professionals.

Ontarians moving more often

Seven out of 10 repeat home buyers in Ontario (71 per cent) are moving to larger or more luxurious homes and many are doing so earlier than originally planned.

MARKET WATCH: Outlook positive for commercial real estate

Canada’s top real estate executives are predicting a bright future for commercial real estate.

ON THE MARKETS: Resale housing market to stabilize by 2012

Fewer buyers and more listings will result in a more balanced resale housing market in Ontario over the next year, according to the third quarter Housing Market Outlook by Canada Mortgage and Housing Corporation (CMHC).

RECO Decision: Tenant had no right to sell

Legal beat: time well spent explaining buyer representation agreements.

A real estate brokerage sued for its commission under a signed Buyer Representation Agreement (BRA).

OREA volunteer leadership training in demand

The leadership training that has been developed by the OREA Centre for Leadership Development is in demand from other outside organizations.

“Like” us on Facebook

More than 2,000 people “like” the OREA Real Estate College Facebook page.

OREA leader elected chair of CSAE

Ed Barisa, chief executive officer of the Ontario Real Estate Association, was elected chair of the Canadian Society of Association Executives (CSAE) at the society’s annual conference in Saskatoon in September.

Emotions can hinder sale of matrimonial home after a marriage breakdown

September 1, 2011

You’ll encounter many different situations over the course of your real estate career, but one that can be particularly tricky is the sale of a matrimonial home following a marriage breakdown.

You’ve got mail: New clause offers added choice for electronic transmission

Sending documents by email and through the internet is becoming increasingly common in business, including real estate.

Energy retrofit program renewed

The federal government has renewed the popular ecoENERGY Retrofit - Homes program. Until March 31, 2012, homeowners can receive grants up to $5,000 to make their homes more energy-efficient and save energy costs

MARKET WATCH: More moderate housing market predicted

An unusually rapid recovery in the Canadian housing market played an important role in ensuring that Canada’s recession, although sharp, was also short, according to Bank of Canada Governor Mark Carney.

WIRED OFFICE: Why all the fuss over Google+?

Google has recently launched a new social media platform called Google+ (plus).

RECO Decision: Buyer faces host of problems with basement apartment

The following decision from RECO Discipline and Appeals Hearings has been condensed and all individual and corporate names have been changed.

LEGAL BEAT by Merv Burgard: Shedding light on storage facility’s lakeside location

An unexpected municipal work order required the sellers to move a lakeside storage shed away from the shoreline.

Charity motorcycle ride a success

This year’s Motorcycle Ride for Charity was a great success, with organizers anticipating that funds raised to support the REALTORS CARE Foundation may total more than $50,000 once all pledges are in.

OREA embraces social media

The Ontario Real Estate Association is at the forefront of new technologies by strategically developing a dynamic social media presence.

Let’s make a deal: Offers, counter-offers and the acceptance of offers

July 1, 2011

Success in real estate – as in hockey – is all about playing your best and maximizing your strengths to try to beat your opponents.

Working the farm: Prospecting and farming skills are vital for new salespeople

You’ve finished your real estate courses and you’re eager to get started, but how can you build a client base to grow your business?

Future of green building is focus of conference

The green building market is booming and is expected to reach $173.5 billion (U.S.) by 2015.

MARKET WATCH: Housing market drives economic optimism

Although Canadians are still coping with the recession’s effects, they feel more optimistic about their personal finances and the housing market is playing a key role, a survey in Consumerology Report reveals.

ON THE MARKETS: Buyers bullish on recreational properties

Warmer weather often turns people’s thoughts to getting away from it all, and a recent survey reveals that many Ontarians love their cottages.

RECO Decision: Restaurant listing never posted into system

The following decision from RECO Discipline and Appeals Hearings has been condensed. All individual and corporate names have been changed.

LEGAL BEAT: Do your homework on owner’s equity before listing property

When you meet your sellers, go over their financial position and ask some basic questions and confirm their answers. Here are some suggested questions to ask them before listing.

OREA blog launched

A new and exciting way to shop for tools to help you in your career is now available to students and members of the Ontario Real Estate Association.

College develops online store for students and members

Online exam option.

The OREA Real Estate College has introduced an online exam option for both the admissions test and the examination for the first pre-registration course, Real Estate as a Professional Career.

Buyer Representation Agreements: Make sure buyers understand what they’re signing

June 1, 2011

The most common complaint to the Real Estate Council of Ontario (RECO) is from consumers who say they didn’t understand what they were signing when they entered into a Buyer Representation Agreement.

RECO revises website

A new website design has recently been launched by The Real Estate Council of Ontario (RECO).

MARKET WATCH: Conventional mortgages still popular

Canadians are surprisingly conservative on the mortgage front despite a decade of low interest rates, according to a survey commissioned by ING DIRECT.

Advertising in real estate: Beware of pitfalls and know the rules

Advertising can be a powerful tool to attract potential clients, whether it’s through flyers, newspaper ads, billboards or blogs.

WIRED OFFICE: Secret codes or marketing tool Have you seen any white squares containing black dots and geometric lines lately?

Materializing with increasing frequency in magazines and on flyers, business cards, billboard ads and websites, these boxes with funky designs are known as Quick Response or QR codes.

LEGAL BEAT: Clients can and do make all kinds of claims after a loss

The buyer sued the sellers, the home inspector and her REALTOR® after water infiltration and basement flooding occurred in her Saskatchewan home.

Student handbook available online

A revised online version of Your Career in Real Estate: A Student Handbook has recently been released by the OREA Real Estate College.

Motorcycle ride stops at various boards

Pledge forms are still available for the Motorcycle Ride for Charity organized by the REALTORS Care Foundation.

Campaign College focuses on election

Members of the Ontario Real Estate Association from across the province came to Toronto in April for Campaign College, which took place over two days and gave members the tools and information they need to prepare for this fall’s provincial election.

Multiple choice, multiple opportunities: Helping your clients deal with multiple offers

May 4, 2011

In a seller’s market, multiple offers are common, but they can also happen in a balanced or buyer’s market.

New salespeople advised to hit the ground running for real estate success

Ask any REALTOR® to recall their first day on the job and most will tell you it was overwhelming.

Old woman in the shoe ad promotes REALTORS®

A television commercial featuring a modern day retelling of the Mother Goose fable of The Old Woman Who Lived in a Shoe is the latest addition to CREA’s national ad campaign.

MARKET WATCH: First-time buyers strive to get ahead of higher interest rates

Driven by the potential of higher interest rates in the future, first-time buyers are contributing to a strong upward momentum in residential housing markets across the country, according to a recent RE/MAX report.

ON THE MARKETS: Ontario economy set to grow in 2011

Ontario’s economy has picked up and posted its best performance since 2002, according to the latest Provincial Economic Outlook report by RBC Economics.

RECO Decision: Registrant fined for falsifying documents

Legal beat: license to sell - registration protects public by supervising mortgage brokers.

Mr. Guido and his company worked to assist people with marketing and financing.

OREA News: Volunteerism awards recognize outstanding contributions

The efforts of volunteers were recognized at the 2011 OREA Annual Conference at Toronto’s Westin Harbour Castle Hotel.

Motorcycle Ride for charity takes place in July

Registration and pledge forms are now available for the Motorcycle Ride for Charity organized by the REALTORS Care™ Foundation.

Show me the money: The fate of the deposit if the deal falls through

April 1, 2011

You’ve worked hard to seal the deal and to get the buyer and seller to come to an agreement. But what happens to the deposit if the deal fails to close?

Video on home buying and HST released by OREA and provincial government

A video that explains to prospective buyers the facts about the Harmonized Sales Tax (HST) and the housing market was recently released by the Ontario Real Estate Association (OREA) and the provincial government.

Land and development conference coming up

Find out which market factors and dynamics are affecting land acquisition and development in the Greater Golden Horseshoe (GGH) at the 2011 Land and Development Conference on May 5 at the Metro Toronto Convention Centre.

MARKET WATCH: Improved housing sales predicted

Canadian home sales for 2011 are expected to be better than previously predicted, thanks to improving consumer confidence which will partly offset the anticipated negative impact of interest rate hikes, The Canadian Real Estate Association (CREA) reports.

WIRED OFFICE: Personal branding - What it is and why it’s important

Lately, a new term has crept into business lingo -- “personal branding.” According to Wikipedia, personal branding is “the process whereby people and their careers are marked as brands.

RECO Decision: Registrant fails to disclose financial interest in property

Legal beat: what’s in a name get personal signature on buyer representation agreement.

The buyer and the REALTOR® had maintained a casual friendship and occasional business relationship for 15 years before the events that occurred leading to this action.

The OREA 2011 Annual Conference at Toronto’s Westin Harbour Castle Hotel in March was a great success.

Campaign College focuses on provincial election

OREA staff members are busy finalizing the details for the 2011 OREA Campaign College scheduled to take place April 18 and 19 at the Sutton Place Hotel in downtown Toronto.

Jam with a Past President

Once again this year, the REALTORS Care™ Foundation has organized a Jam with a Past President event. Brian Walker, OREA’S President in 2007, hosts the annual event, which will be held during Campaign College (see item above).

March 1, 2011

The February issue of REALTOR® EDGE contained incorrect information in an article about power of sale.

Fascination with history plays role in appeal of heritage properties

Although Henry Ford famously remarked that “history is bunk,” people with a love of all things historical would disagree with the renowned automaker.

The price is right: Learning to price properties with confidence

Accurately pricing a property and listing it reasonably close to market value so that it’s not overpriced is an important aspect of a REALTOR®’s job.

New real estate mobile app launched by CIBC

CIBC recently introduced the Home Advisor App to give home buyers access to helpful information, tools, and advice right from their iPhone or BlackBerry while they’re out house hunting.

MARKET WATCH: Survey uncovers trends among single home buyers

Although conventional wisdom suggests that most singles would rather live in an urban setting, a survey conducted by Coldwell Banker revealed that the majority of single homeowners (52 per cent) chose suburbia.

ON THE MARKETS: Canadian resale market to have a soft landing in 2011

Fears of a U.S.-style housing crash in Canada were unfounded and the resale market in this country has landed safely, according to a recent report by TD Economics.

RECO Case: Buyer’s experience dampened by water leakage and undisclosed multiple representation

The following decision has been condensed from RECO Complaints, Compliance and Discipline Hearings and Appeals. All names have been changed.

LEGAL BEAT: Fixture or chattel? Arguments focus on status of motel sign

A large commercial sign situated on a piece of property in western Ontario is at the centre of this dispute.

Volunteer now and make a difference

Joining a committee or task force at OREA is a great way to serve your profession while enhancing your leadership skills.

Call for nominations for RECO 2011 election of directors

Members of the Real Estate Council of Ontario who are interested in serving on its board of directors are required to submit their nomination forms no later than 2:00 p.m. on Friday, April 1.

Campaign College advances real estate issues during election

To prepare member boards and associations to advance REALTOR® issues during provincial election years, OREA is hosting a two-day Campaign College.

Power of sale property must sell in “as is” condition

February 1, 2011

First you see that the lawn has not been cut and the weeds are taking over. Then you notice that the newspapers and mail are piling up on the front porch. The windows look dirty, and the house looks forlorn and neglected.

Vision for future of real estate technology unveiled

Giving a competitive edge to REALTORS® is the goal of several new technology innovations being developed by the Canadian Real Estate Association’s MLS® and Technology Council (MTC).

Growth of social media in U.S. real estate shown

Eighty per cent of REALTORS® in the United States use social media, according to the National Association of REALTORS® (NAR) technology survey for 2010.

MARKET WATCH: Strong housing market predicted for early 2011

News of a strengthening economy and low interest rates may result in a stronger-than-expected housing market for early 2011.

WIRED OFFICE: Etiquette on the web: Always be polite

Canadians are enthusiastic users of the internet. Perhaps the long, cold winters push us towards our internet interfaces.

RECO Case: Failure to disclose commission agreement proves costly

The following decision has been condensed from RECO Complaints, Compliance and Discipline Hearings and Appeals. All names of individuals, brokerages and other businesses have been changed.

LEGAL BEAT by Mervin Burgard: Deal not dead if parties agree to another document

The buyer signed an Agreement of Purchase and Sale (APS) for a pre-sale unconstructed condominium unit that she wished to own. The document contained a condition that stated:

OREA Annual Assembly Meeting open to members

New mobile application for hand-held house hunting.

A mobile application of REALTOR.ca for Windows® Phone 7 is now available to help consumers check out houses while they’re on the go, CREA announced.

MARKET WATCH: More balanced 2011 market predicted for homes

The market for resale homes in Canada was firmer for a third straight month in October 2010, suggesting a soft landing for the once red-hot sector and stable market conditions for the next two years, according to industry reports.

Uncertain forecast for commercial markets in 2011

Wishing they had a crystal ball, many commercial real estate experts expressed uncertainty about 2011 market prospects in the North American and global economies at the Annual Global Property Market and Toronto Real Estate Forum.

New year’s sales tips from the experts

The new year often inspires people to make a fresh start, spurring a rush to the self-help section of bookstores everywhere.

ON THE MARKETS: Canadians wary of household debt risks

Canadians are very cognizant of the dangers of excessive debt leverage, according to a special report by Scotia Economics.

RECO Case: Unsuspecting buyers get less than they bargained for

The following decision from RECO Complaints, Compliance and Discipline Appeals has been condensed.

LEGAL BEAT by Mervin Burgard: Disclose the fact that suicide took place

A question was asked about whether a builder was obligated to disclose to a buyer that an intruder broke into a house and committed suicide just before the sale closed.

OREA NEWS: OREA Annual Assembly Meeting open to members

All OREA members are invited to attend the Annual Assembly Meeting on Wednesday, March 2, 2011 at the Westin Harbour Castle Hotel in Toronto.

OREA office applying for LEED status

The Ontario Real Estate Association has applied to the Canada Green Building Council for LEED status for its renovated headquarters in Don Mills.

Looking for volunteer leaders

Two new topics posted to oreapedia.

REALTORS® can check out the two new topics posted to OREApedia recently.

Podcast offers tips for home staging

December 12, 2010

BMO (Bank of Montreal) has added the Happy Homeowner to its First-Time Homebuyers series of podcasts.

MARKET WATCH: Nine-in-ten Ontario boomers plan to downsize

For their next move, Ontario boomers are looking to downsize to smaller homes.

What does the CREA competition consent agreement mean to REALTORS®?

Now that an agreement has been reached between CREA and the Commissioner of Competition does that mean the public can list properties on the MLS® System? Not without a REALTOR® they can’t.

Over half of Ontarians confused about HST and resale homes

A full 56 percent of Ontarians mistakenly believe that the new Harmonized Sales Tax (HST) applies to the full purchase price of a resale home, according to an Ipsos Reid survey commissioned by the Ontario Real Estate Association (OREA).

WIRED OFFICE: iPads and PlayBooks and Slates, oh my!

With the holiday season coming there has been much ado about a new breed of technology currently being referred to as the digital tablet.

REALTOR® trademark is a valuable asset

One of the benefits of being a member of organized real estate is the right to call yourself a REALTOR®.

LEGAL BEAT: Take care when drafting exclusions

The sellers had serious legal disputes with their neighbours Ms. Belzberg and Mr. Knechtel about restrictive covenants. That went to court and the sellers lost.

Looking for leaders

If you’ve ever thought of serving your profession, why not sign up for an OREA committee?

Public Career Night a success

The first-ever educational open house aimed at promoting real estate as a career was a great success for the OREA Real Estate College.

Leadership courses presented at NAR conference in U.S.

At a recent meeting of the National Association of Realtors (NAR) in New Orleans, two volunteer leadership training courses developed by the OREA Centre for Leadership Development were presented to participants at the U.S. meeting on request from the Americans.

TD targets young Canadians with online budgeting tools

November 12, 2010

In a recent TD Poll, which compared investment attitudes of Gen X (born between 1965 and 1976) and Gen Y (born after 1980), Gen Xers said saving more each month, paying off debt, and opening an RSP are the top financial decisions they would make differently if they were 25 again.

MARKET WATCH: Canadian Housing activity hit $307 billion

The value of housing activity related to new home construction, as well as the rental, sale and renovation of existing homes in Canada reached $307 billion in 2009, or more than one-fifth of Canada’s total gross domestic product, according to Canada Mortgage and Housing Corporation’s (CMHC) latest Canadian Housing Observer report.

Many OREA Standard Forms revised for 2011

A new Seller Commission Agreement form will help protect the commission of co-operating brokers in situations where they are dealing directly with the seller. This new form was created for 2011 and a large number of existing forms have been revised.

New financial tools available to help REALTORS® help clients

REALTORS® have the opportunity to help first time home buyers make their dream of home ownership come true.

ON THE MARKETS: Ontario's economic confidence and housing affordability slide

Ontarian's economic confidence slipped 18 points (from 97 to 79 points) over the previous quarter, the highest of all regions across Canada -- according to the latest RBC Canadian Consumer Outlook. Just 57 per cent of Ontarians believe the state of the economy is good, down nine points from June and compared to 60 per cent nationally.

RECO Case – The price is right

The following RECO Complaints, Compliance and Discipline Appeals decision has been condensed and can be viewed in its entirety on the RECO website at www.reco.on.ca.

LEGAL BEAT: Consider tax allocation for tenants

This case concerns the interpretation of a commercial lease. It asks how the contribution the tenant is to make in respect of property taxes is to be calculated.

Stay current and connected

The OREA Real Estate College has launched two new initiatives to help you stay up-to-date with College news and events.

Calling all candidates!

Interested in running for a position on OREA’s 2011 Board of Directors?

Mandatory home energy audits stopped

October 10, 2010

The Ministry of Energy has decided not to proceed with plans to introduce mandatory home energy audits on real estate transactions.

MARKET WATCH: Survey shows consumers confused about HST

A recent survey by Royal LePage shows that consumers in Ontario and British Columbia have misconceptions about how the Harmonized Sales Tax (HST) affects real estate transactions.

Bubble or no bubble? Two studies show conflicting opinions

Is the Canadian real estate market in a bubble about to burst or not?

REALTORS® have a duty to disclose defects

Basement flooding, cracks in the foundation, mould – what do sellers need to disclose and what do REALTORS® need to find out?

WIRED OFFICE Which smart phone is best for you?

Gone are the days of sitting around in your office waiting for an important call or for that essential email to arrive.

Learn how to stay safe on the job

Real estate is definitely a people business and, as a REALTOR® you meet lots of people on the job.

LEGAL BEAT: Material defect costs commission on 1.2 million dollar deal

The buyer sees a house in Carlisle, Ontario that meets his needs.

Shop for courses 24/7

Enrolling in OREA Real Estate College courses is a whole lot easier thanks to the “web self-serve” functionality on the www.orea.com website.

OREA Government Relations department wins CSAE Award

For its successful campaign against the Ontario government’s proposed mandatory energy audits, OREA was awarded the CSAE’s 2010 Associations Make a Better Canada Award in the Public Affairs/Government Relations category.

OREA celebrates excellence in customer service

At the Ontario Real Estate Association (OREA) we are proud to be participating in National Customer Service Week (October 4 - 8, 2010), and wanted to take this opportunity to thank you for being a "customer" of OREA. We value and appreciate your business.

Commercial real estate sustainable?

September 10, 2010

A new report finds the Canadian commercial real estate industry is playing catch-up with respect to environmental, social and governance (ESG) issues when compared to international peers.

MARKET WATCH: Homeowners are more financially fit

Homeowners are in the best shape when it comes to financial fitness in Canada. Sixty five per cent of homeowners pay off their credit card balances each month, vs. 48 per cent of non-homeowners.

Clauses should clarify terms of agreement between buyer and seller

Get it in writing…and get it right. A good clause in an Agreement of Purchase and Sale (APS) exists to make sure that the requests of both parties are accurately reflected.

“My REALTOR® had all the answers”

A new television commercial promoting the value of REALTORS® began airing across Canada at the end of August.

ON THE MARKETS: Lending rate hike won’t greatly impact real estate market

When the Bank of Canada (B of C) raised its overnight lending rate by 25 basis points in July, it sent fear into the hearts of many would be home buyers.

RECO Decision: Stolen identity, misrepresentation punished

The following RECO Discipline decision has been condensed and can be viewed in its entirety on the RECO website at www.reco.on.ca.

LEGAL BEAT: How to save your client’s money

I act for a builder buying several lots from a developer on which individual homes will be built.

Real Estate as a Professional Career is now offered in class

The OREA Real Estate College now offers the classroom method of course delivery for Real Estate as a Professional Career, the introductory course to The Salesperson Registration Education Program.

Defects and the Importance of Disclosure

Knowing the types of defects to look for and what information needs to be disclosed to your clients is part of the REALTOR®’s duty.

Be the REALTOR® every client wants

A new one-credit, online, CE course, Be the REALTOR® Every Client Wants, is now available!

RECO elects directors

August 10, 2010

Following the Real Estate Council of Ontario’s Annual Meeting in June, the Board of Directors elected George Lavallee as Chair and Keith Tarswell as Vice-Chair for 2010 – 2011.

MARKET WATCH: Housing activity will stabilize

Housing starts rebounded in the second half of 2009 and early 2010 and will stabilize over the next two years, according to Canada Mortgage and Housing Corporation’s (CMHC) second quarter Housing Market Outlook Canada Edition.

Expand your knowledge of clauses and conditions

Real estate transactions are loaded with issues that require carefully worded clauses and conditions to keep the deal on track. OREA Standard Clauses are used by members on a daily basis.

Dealing with the complaints process

What if a complaint is filed against you with the Registrar? What can you expect? How long is the process going to take?

WIRED OFFICE: Privacy and Social Media

Conduct an internet search on yourself by entering your name in a search engine (e.g., Google, Bing, etc.).

RECO Decision: REALTOR® fails to include all owners in listing agreement

Legal beat: power of sale.

The lender started Ontario Power of Sale proceedings and sued the mortgagor-owner who defended on several grounds. None were found in the owner's favour.

OREA exam replaces CAAT for admissions

Applicants to OREA’s Salesperson Registration Education Program can now write the OREA Real Estate College’s own real-estate focused Admissions Test to comply with the Private Career Colleges Act, 2005 mandated ‘Grade 12 or equivalent’ admissions requirement to our program.

Perceived viability of real estate industry shifts: survey

More brokers today feel that the viability of the real estate industry is in jeopardy, according to the 2010 Broker Viability study.

Homeowner emergency response plan starts

June 16, 2010

Residents and businesses in disaster-stricken communities across Ontario will be able to recover and rebuild more quickly, thanks to a plan launched in May by the Ontario Association of Fire Chiefs and The Home Depot Canada.

MARKET WATCH: First time buyers willing to pay more for location

A Bank of Montreal (BMO) survey released in April says among current homeowners and future first-time homeowners, location is the main reason they would consider offering more than the asking price for a home.

Applying the HST: REALTOR®tips

The new harmonized sales tax (HST) takes effect July 1st. Ontario REALTORS® need to prepare for the changes now.

RECO can no longer obtain criminal record checks

To become registered or renew registration with the Real Estate Council of Ontario (RECO), applicants not only have to have the appropriate real estate education, they must also be able to prove financial fitness and disclose any criminal charges against them.

ON THE MARKETS: Canadian economy’s growth will slow

Almost halfway through the year and the recovery in the Canadian economy is strong, but to what extent is this recovery the real thing and to what extent is it sustainable at the current rate?

Real estate brokerages need a plan to ensure a safe and healthy workplace to protect workers

Bill 168, Ontario’s new workplace violence and harassment legislation, will require every real estate brokerage to take specific steps to comply with the new law which comes into effect on June 15, 2010.

LEGAL BEAT: Standard form saves commission

The brokerage sued their buyer client for $21,774.50 under an Ontario Buyer Representation Agreement (BRA).

Timeline reminders

The OREA Real Estate College has started two campaigns to remind students of the time restrictions for completion of the Salesperson Registration Education Program.

REALTORS® ride to help provide shelter

Show your support for the REALTORS Care Foundation’s fifth annual REALTOR® ride for charity, a motorcycle ride in support of shelter-related charities.

No new applicants for ecoENERGY program

May 5, 2010

Effective March 31, 2010, the ecoENERGY Retrofit program that provided grants of up to $5,000 to Canadians who make their homes more energy efficient, stopped accepting new bookings for pre-retrofit evaluations.

MARKET WATCH: Mortgage rates on the rise

Canada’s big five banks have begun raising rates on certain fixed mortgages, including the benchmark five-year mortgage.

Real Estate Assignment Sales

Understanding Assignment Sales in Ontario's Pre-Construction Market

An assignment sale, in essence, is the transfer, or “assignment,” of a contract to buy a suite in a pre-construction condominium. This type of sale is typical for condominiums that are pre-construction and not yet registered, meaning the actual unit can’t be owned just yet—only the contract for purchase can be transferred.

When you buy a unit in a pre-construction condo in Ontario, the contract typically includes an assignment clause or right. This allows you the option to sell your ‘assignment’ before the construction of the condominium is completed.

In an assignment sale, the Assignee (or Buyer) isn’t directly purchasing property from the Assignor. Instead, they are acquiring the “right” to obtain property from a third party, typically the builder. The Assignor transfers their interest and rights in the original agreement made with the builder or original seller, along with their interest in the initial deposit. The Assignee, in turn, agrees to take on all obligations under the original agreement.

The actual transfer of ownership happens once the building is constructed and registered by the city. Until then, the transaction is essentially the sale of a contract. As we will explore, there are numerous benefits for both buyers and sellers in such sales.

In this article, we delve deeper into the concept of assignment sales, their uses, the transaction process, and how rights can be transferred.

Our goal at Meta Realty Inc. is to arm you with extensive knowledge about the pre-construction market in Ontario. With this information, you can make a more informed decision about whether an assignment sale is the right investment for your future.

Assignment sales offer potential advantages for both buyers and sellers, making them a unique and often lucrative aspect of the Ontario real estate market.

Need Help Selling Your Assignment?

Exploring an assignment sale through a hypothetical scenario.

To better understand the dynamics of an assignment sale in Ontario’s pre-construction real estate market, consider this fictional but illustrative example:

• Initial Purchase: In 2020, Emily Brown decides to buy a suite in a pre-construction condo from Maple Leaf Developers for $500,000. She pays a 15% down payment, totaling $75,000. The project’s estimated completion date is set for 2025.
• Change in Circumstances: By 2023, Emily’s situation changes drastically. She needs to relocate for a new job opportunity. Holding onto her pre-construction condo while purchasing a new home in another city becomes financially challenging.
• Utilizing the Assignment Clause: Emily’s contract includes an assignment clause, a common feature in pre-construction agreements. This clause allows her to transfer her contract to another buyer without significant financial penalties.
• Finding a New Buyer: Emily finds a buyer, David Lee, interested in her condo contract. Thanks to the real estate market’s growth, her realtor Jake is able to negotiate a sale price of $600,000 for the assignment.



Assignment Agreement Details:

• Original Purchase Price: $500,000
• Assignment Sale Price: $600,000
• Realtor Jake Stenman Fee: $30,000
• Assignor (Original Purchaser): Emily Brown
• Assignee (New Purchaser): David Lee

Emily’s Profit: $70,000, on her initial $75,000 deposit after 3 years, or a whooping 24.6% IRR!

• Interim Occupancy Phase: As 2025 arrives and the building is ready for interim occupancy, David steps in. He pays occupancy fees to the developer, which act as a placeholder until the official closing and registration of the building.



Completion of the Assignment:

• When the city officially registers the building, the title is transferred from Maple Leaf Developers to David.
• David completes the payment of the remaining balance, amounting to $500,000.
• He now fully owns the suite, with all the rights and responsibilities of a traditional real estate owner.

Why Opt for Assignment Sales in Ontario's Pre-Construction Condos?

Further Considerations in Assignment Sales

The scenario provided offers a fundamental understanding of an assignment deal in Ontario’s condo market. However, it’s important to recognize that this is a simplified overview. Real-life assignment sales can involve more intricate details, such as specific mortgage rules and other contractual nuances.

For a deeper dive into this topic, or to discuss specific situations, feel free to reach out to our team. We’re passionate about condos and always eager to share our expertise! Remember, each assignment sale comes with its own unique set of rules, terms, and conditions.

If you’re considering buying or selling a pre-construction assignment, we strongly recommend seeking advice from a specialized real estate agent, a knowledgeable lawyer, and a tax accountant. This is crucial because assignors might face tax implications on any profits made from the sale.

It’s noteworthy that most builders in Ontario are open to assignment sales, and you can often find such listings on platforms like REALTOR.ca. However, it’s essential to be aware of and adhere to the rules set out in the original purchase agreement. Assignment sales are more complex than standard real estate transactions, mainly because a mortgage can only be secured after the building’s registration, not at the closing of the transaction. Other considerations, such as the terms of occupancy, reimbursement of the seller’s deposits, and various legalities, also play a significant role in these deals.

Evaluating the Benefits of Buying an Assignment in the GTA Condo Market

Are assignment purchases in the GTA condo market a worthwhile investment? The answer leans towards a resounding yes, especially for those looking for exceptional deals. Assignment sales are often overlooked, making them a less competitive and more advantageous option for buyers.

A significant factor contributing to this scenario is the lack of awareness among many real estate agents and lawyers about the nuances of assignment sales. This lack of familiarity can lead to fewer advertised listings, providing savvy buyers with unique opportunities. In the bustling resale market, the intense demand often sparks bidding wars, escalating prices and leading buyers to potentially overpay for their chosen units. Opting for an assignment sale circumvents this competitive frenzy, usually resulting in more favorable pricing compared to resale units.

Assignment sales are mutually beneficial in nature. Sellers gain the flexibility to list their units before the completion of the building, while buyers can enjoy potential savings in both time and money.

A standout advantage for buyers is acquiring a brand-new suite, complete with the seven-year Tarion Warranty Program. This assurance of quality, coupled with the likelihood of moving in sooner – often bypassing the usual 3 to 4-year wait – adds to the appeal of assignment sales.

Key Advantages for Buyers in Assignment Sales

• Diverse Options: A larger pool of choices, especially beneficial when listings are scarce.
• Reduced Competition: Fewer buyers targeting these listings means less likelihood of bidding wars.
• Cost Savings: Avoid overpaying in competitive bidding situations.
• VIP Perks: Inherit incentives like the Tarion Warranty and other builder offers such as credits, upgrades, and capped development charges.
• Customization Potential: Depending on the construction stage, there may be flexibility in selecting finishes and upgrades.
• Negotiation Leverage: Sellers often need to liquidate their equity, giving buyers an edge in negotiating prices, deposits, and closing dates.
• Accelerated Ownership: Gain access to your new unit faster than in standard pre-construction contracts, often just months away from occupancy.
• Tax Advantages: Potential savings on taxes like GST and HST.

The Perks of Selling an Assignment 
in the Ontario Housing Market

In the traditional real estate scenario, owners of pre-construction units had to patiently wait, often for months or years, until the final closing date to officially list their suites for sale. This waiting period typically involved substantial expenses in terms of occupancy fees and closing costs.

Assignment sales, while not a novel concept in Canada, are less understood here compared to countries with a longer history of condominium development. This lack of widespread knowledge spans across sellers, buyers, real estate agents, lawyers, and even financial institutions. However, sellers who have invested time in understanding the assignment sale process have found it to be a lucrative strategy, allowing them to save time and maximize profits.

The trend of assignment sales is gaining momentum, akin to a form of condominium flipping. It enables sellers to transfer their property rights either during or before the interim occupancy phase, helping them avoid significant carrying and closing costs. This process is particularly beneficial as it allows sellers to recover their deposits more efficiently.

Most developers in the condo market are open to assignment sales, though they typically have specific rules that need to be adhered to. Despite these regulations, sellers still have viable options for managing their property investments.

Key Benefits for Sellers in Assignment Transactions

• Financial Flexibility: Assignment sales act as a safety net, allowing sellers to release their equity and withdraw from the agreement if their circumstances change and they no longer need the unit.
• Avoidance of Carrying Costs: Sellers can sidestep ongoing expenses, such as occupancy fees, which in some cases can extend for up to two years.
• Elimination of Closing Costs: There’s no need to secure a mortgage or bear any other closing costs typically associated with property transactions.

For those considering the sale of their pre-construction unit in Ontario, understanding and leveraging the advantages of assignment sales can offer a practical and financially beneficial alternative to traditional real estate transactions.

Assignments

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Building Type: Condo

Y and S Condo

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492 Eglinton Ave E

292 Dundas St W

Tribute Communities

Willow Bridge Homes-Middleton

95 Auckland avenue

Willow Bridge Homes

Emerald Crossing

Hwy 10 / Dufferin Rd

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Time and Space

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350 Adelaide St W

Articles & Resources

An Assignment of an Agreement of Purchase and Sale is when an original purchaser under an Agreement of Purchase and Sale permits a different party to take over the contract. New homes, condominiums and even re-sale properties can be assigned.  

Purchasers usually assign their Agreement of Purchase and Sale with the view of making a profit. 

For example, if the original purchaser signed the Agreement of Purchase and Sale at $100,000.00 but they are now transferring the contract to the third party for $150,000.00 they have profited $50,000.00.

Other reasons?

• Keep in mind, when a purchaser signs the contract, closing may not take place for another year or longer;
• They no longer want the home (i.e. they’ve found something better);

Does this mean that the original purchaser walks away free after the Assignment Agreement has been signed? No.

Most, if not all, Assignment agreements will have a clause to the effect of “(original) buyer assumes continuing liability for the “covenants, agreements and obligations” contained the original agreement”

What is the benefit to the new buyer?

• The new buyer may be able to buy into a desirable neighborhood at a time when there are no more units available to be purchased directly from the builder;
• Even taking the original buyer’s profit into account, the assignment may give the new buyer a price advantage over other properties that are currently on the market; and
• Depending on the timing of the assignment, the new buyer may be positioned to choose finishes and make minor changes to the yet-to-be-built home.

Common Terms

Assignor: Original Buyer

Assignee: New Buyer

Vendor: Builder

Consent: Permission from the Builder to transfer the contract to the Assignee. Absolutely Necessary. 

Can an Agreement of Purchase and Sale be assigned?

Most Agreement of Purchase and Sales state that the Agreement of Purchase and Sale cannot be assigned without the Vendor’s consent which may be withheld arbitrarily. What this means is that the Builder has the ability to deny any requests for assigning the APS at its sole discretion. 

However, at times, the Assignor may have already signed an Amendment to the Agreement of Purchase and Sale permitting one Assignment of the APS. In these circumstances, there may be little to no barrier in assigning the APS. In any event, reference will still need to be made to the APS to make sure that there are no conditions to an assignment [i.e. 90% of units have to be sold (if condo) before an Assignment will be permitted]. 

Responsibility to Obtain Consent:

Clause 15 in the Assignment of Agreement of Purchase and Sale sets out that the responsibility to obtain consent remains with the Assignor and all costs are to be paid for by him/her. However, costs can be split by modifying Schedule A.  

“ The Assignee acknowledges and agrees that the Developer’s Agreement contains a provision prohibiting the purchase and the sale of the within unit without the Developer’s consent and accordingly the Assignee and Assignor shall execute and deliver to the Developer Consent documents as required. This Agreement of Purchase and Sale shall be conditional upon the Assignor obtaining the written consent of the Developer to the assignment herein until XYZ date, failing which the Agreement herein shall be null and void and all deposits returned to the Assignee, unless otherwise extended in writing by the Assignee and Assignor ”

Note: While there will be an Assignment of Agreement of Purchase and Sale to be executed between the Assignor and Assignee, the Vendor will also draft their own consent to assign which will contain their terms and conditions. 

Adjustments

Who is responsible for paying additional costs arising in the Statement of Adjustments? Very important to advise client accordingly depending on if Assignor or Assignee. 

If we are acting for an Assignor, we want to make sure that there are no clauses in Schedule A or any other Schedule which makes them responsible for adjustments. 

Keep in mind, we will not know what the actual adjustments are until well after the Assignment Agreement has been signed. At times, these costs can be significant (i.e. increase in development charges). 

At all times, it is the responsibility of the Assignor and Assignee to be diligent in ensuring that they are aware of what’s being contracted for.

Please note the content on this web site is provided for general information purposes only and does not constitute legal or other professional advice of any kind.

Nava Wilson LLP specializes in Real Estate, Immigration, Corporate Law, Litigation, and Wills and Estates.

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The Elements of an Ontario Real Estate Contract

Purchasing a home in Ontario comes with many critical considerations and decisions. When prospective purchasers or sellers decide to proceed with a real estate transaction, they must sign an agreement. However, it is vital for parties to understand what the real estate contract states regarding the terms of the agreement and what the consequences are if a party does not follow through on their responsibilities under the contract. With proper preparation and help from a skilled realtor and real estate lawyer early on in the process, you can ensure that the transaction goes as smoothly as possible.

This blog post will focus on explaining the core elements of a real estate contract in Ontario to help buyers and sellers understand what a standard real estate contract looks like and how the terms of these agreements impact their rights.

What is a Standard Contract in Ontario Real Estate?

Realtors will use Ontario Real Estate Association (OREA) Form 100 (Agreement of Purchase and Sale) for most real estate purchases in Ontario. This is a standard contract that is prepared by the buyer and presented to the seller as an offer to purchase the property in question.

The terms of the Agreement of Purchase and Sale may change through negotiation. However, the topics covered in the contract rarely vary.

Standard Clauses in Ontario Real Estate Contracts

The information below outlines some of the relevant clauses in an Ontario real estate contract and provides context for the key clauses that may interest an average buyer. Real estate contracts can vary based on the unique circumstances of the transaction and may differ from the terms set out below. If you have questions regarding an Agreement of Purchase and Sale or how a standard clause applies to your unique circumstances, it is important to obtain the advice of an experienced real estate lawyer .

Introductory Information

On every Ontario real estate contract, there are several pieces of essential information, including:

• the date the offer was made;
• the name (or names) of the buyer(s) and seller(s); and
• the address and legal description of the property that is the subject of the offer.

The Deposit

Typically, when a seller accepts an offer to purchase their property, the buyer provides the seller with a non-refundable deposit as a sign of commitment and good faith. While many buyers provide 5% of the property’s purchase price for the deposit, this number can vary based on buyer or seller preferences.

The Agreement of Purchase and Sale will include a clause outlining the deposit amount, the method of payment, and who will receive it. In many cases, the seller’s lawyer receives the deposit, which is held in trust until the transaction closes. The Agreement of Purchase and Sale will also outline how soon the buyer will pay the deposit once the seller accepts their offer. Generally, the buyer must transfer the deposit within 24 hours.

Irrevocability

Irrevocability refers to the circumstances under which the buyer can revoke their offer.

The Agreement of Purchase and Sale will include a clause outlining how long the seller has to consider and accept the buyer’s offer. During that time, the buyer cannot withdraw their offer. However, if the clause states that the offer is irrevocable until a specified date and the seller does not accept the offer by that date, the deposit will be returned to the buyer, and the offer will be null and void.

The Completion Date

The “completion date” is the date that the property will be legally transferred from the seller to the buyer.

The Agreement of Purchase and Sale will include a clause stating the date that the transaction will be completed and the buyer can take ownership of the property.

Fixtures and Chattels

At their most basic nature, “fixtures” and “chattels” are immovable and movable items relating to the property. For example, fixtures are items that are “fixed” to the property, like fences, while chattels are items that can be moved, like a fridge or a washing machine.

The Agreement of Purchase and Sale will include clauses addressing how specific fixtures and chattels will be dealt with. In other words, it will specify whether any items will stay with the property when the buyer takes ownership or whether the seller will remove them from the property. This section includes a clause for “Chattels Included” and “Fixtures Excluded.”

Dealing with fixtures and chattels can become complicated, especially when the parties are not clear about what will stay on the property after the sale closes. When in doubt, it is best to outline how these items will be treated in the contract to ensure there are no unpleasant surprises or disputes relating to them after the property is transferred.

Rental Items

“Rental items” refers to items on the property that are rented and not included in the purchase price. For example, a seller may lease a hot water heater at the property.

If applicable, the Agreement of Purchase and Sale will identify items or equipment that are not included in the purchase price and how they will be dealt with. For instance, the buyer may agree to assume the rental contract for the hot water heater, or it may be returned to the rental company.

Harmonized Sales Tax (HST)

In some cases, such as when a buyer purchases a new build home , a property purchase may be subject to HST.

The Agreement of Purchase and Sale will typically outline whether HST is payable, along with the amount of tax payable. If HST is payable, the amount of tax owing will be added to the Purchase Price, and if HST is not payable, the seller will typically certify that it is not payable on or before the completion date.

Contact Campbells LLP for Comprehensive Guidance on Buying and Selling Residential and Commercial Real Estate

Buying a new home can feel overwhelming, but with the right legal representation, it doesn’t have to be. At Campbells LLP , we guide buyers and sellers through every step of their residential real estate transaction. Our team will help you understand your options, walk you through relevant real estate contracts and documentation, negotiate terms on your behalf, and protect your interests if a dispute arises between the parties. To learn more about how we can help you with your next sale or purchase, contact us online or call (905) 828-2247 .

Campbells LLP in Oakville: A Small Firm Providing Big Service

At  Campbells LLP,  our team of exceptional Oakville lawyers provides practical, forthright legal advice and representation on everything from estate planning to complex litigation. Our goal is to provide the right solution for each and every one of our clients and to deliver the best possible outcome in every case. To learn more about how we can help you, contact us online or at  905-828-2247 . We look forward to speaking with you and going through this process by your side.

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List of Assignments for Sale in Ontario (2024)

Leading online marketplace for condos, townhomes & detached home assignment sales in ontario.

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16th Ave and Markham Road

Olesya Andrianova

REVEL REALTY INC

$ 739,000 920 Sqft

Occupancy - January 2024

1010 Dundas Street East

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Ontario Assignment Sale - Check out Pre construction Condos, Townhomes & Detached home assignment for sale in Ontario, Canada.

Is an assignment legal in ontario.

An assignment is a sales transaction where the original buyer of a property (the “assignor”) allows another buyer (the “assignee”) to take over the buyer’s rights and obligations of the Agreement of Purchase and Sale, before the original buyer closes on the property (that is, where they take possession of the property). The assignee is the one who ultimately completes the deal with the seller.

What is a preconstruction assignment sale?

Unless otherwise prohibited or restricted in writing in the original agreement of purchase and sale, It is mostly legally permitted. In some cases, the developer may charge the assignor a fee for this kind of sale. The best thing to do is to contact the builder directly to confirm if you are allowed to assign your purchase contract because assignment restriction and fees vary from builder to builder.

Homebaba is one of the leading online marketplace for pre-construction and assignment sales in Ontario. Check out hundreds of Ontario Assignment Sales advertised by Liscenced Real Estate Agents in Ontario. Toronto Assignment Sale - Homebaba . The listings such as assignment listings, resale listings or preconstruction project listings & description of the related pages are uploaded by Real estate agents. Homebaba does not verify the correctness of the data uploaded on its platform. Please contact the listing agent to verify the information. E&OE expected.

Assignment Agreements

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What is an Assignment?

When one party transfers their right on one property to another, it is known as an assignment. There are two types of assignment, legal and equitable. Contact us for Assignment Agreements.

If we look at a contract, one party (the assignor) can transfer their right under a contract to a third party (the assignee). The assignor does not need the other party’s consent in the contract as per the express terms and conditions of the contract.

While rights under a contract can be assigned, obligations under the contract cannot be transferred to a third party. Novation is the only method to transfer obligations.

What Are the Legal Implications of An Assignment?

As per the clauses outlined in the Law of Property Act 1925, legal or debt benefits can be assigned to another person. For a legal assignment, there are few requirements:

• Benefits under an agreement can be assigned
• Assignment should be absolute
• The rights under the debt to be assigned should be fully identifiable and whole and should not relate to any parts
• The assignor needs to sign the agreement, and the assignment should be in writing
• All parties to the assignment should receive notice of the assignment

What are Property Assignments?

Any legal sales transaction is an assignment where the assignor (original purchaser) of the property transfers their rights and obligations under the contract to the new assignee (purchaser). In simple terms, the new assignee pays a fee for purchasing the desired property.

The assignment is considered to take place from the original agreement of sale between the original purchaser and developer. The assignment happens before the property is completed.

The assignee assumes all the obligations and duties of the assignor. The original agreement of sale includes these duties and obligations such as included items, deposits, required disclosure statements, and completion date.

The assignee is granted title to the property once the property gets completed. All assignment fees are borne by the original purchaser and are charged by the developer.

The legal owner of the property is the developer till the transfer of title happens legally on completion of the property. For all assignment transactions, the developer needs to give written consent.

How can assignments from builders be done for Pre-Construction Condos?

Before project completion, many investors end up selling their builder agreement properties. The assignment is when the purchaser-investor’s interest in the builder agreement of purchase and sale is transferred to a new buyer or assignee.

Builder’s written consent is required before an assignment can take place by the purchaser-investor. Many builders can also withhold the assignment clause as per their agreement.

Whether you are moving into the property or purchasing a condo for investment, it is advisable to get the agreement reviewed by a real estate lawyer. You can understand your options and request an amendment to the agreement of purchase and sale to allow for future assignments.

Can an Assignment be done only for Pre-Construction Condos?

Any type of property can be assigned to a person, whether it is a resale or a pre-construction one. There should not be any restrictions against assignment in the original contract for the assignment to be possible.

How Can Consent from Builder be Received?

Builder’s requirements, process, and fees should be determined once the buyer confirms that they possess the right to assign the agreement as per the contract. If the agreement prohibits assignment and the builder refuses to allow them, the original buyer will have to wait to sell the property after closing. In many circumstances, the builder’s consent to agreement assignment can be obtained even if such consent was not present in the original contract. Many builders waive the assignment prohibiting clause from the agreement once builder specified criteria and forms with fees are followed.

The sales office can help in determining if the builder can provide consent and under what conditions. Different builders have a varying set of processes on the assignment of their properties.

What are the Salient Features of the Assignment Process?

• The buyer takes over the assignment agreement and pays the adjustments to the builder at the time of closing. New and original buyers may split the adjustments if that is decided as per the agreement
• Assignment fees are typically paid by the original buyer to the builder
• In the original contract, the buyer has paid deposits to the builder. Once the contract gets assigned to the new buyer, they also take over the deposits. In most cases, the original buyer gets their deposits back once the builder gives their signed consent to the assignment of property to the new buyer.
• The original buyer gains by the difference of funds at the time of final closing.
• The closing of the transaction is dependent on the construction level of the condo unit. The buyer can occupy the unit once the occupancy closing takes place. Once the occupancy closing is done, once the builder signs the consent to an assignment, the final closing date can be set.
• The new buyer is responsible for paying the occupancy fees from the date of the property being occupied.

What Are the HST Implications of The Purchase of A Newly Built Residential Property On Assignment From A Builder?

The purchase price on the Agreement of Purchase and Sale with the Builder is already inclusive of HST and an HST New Housing Rebate. However, there are some cases where the Builder will not credit the HST New Housing Rebate on closing as a result of an Assignment, despite the eligibility of the Assignee/Purchaser for the Rebate. If you are buying on Assignment and the Builder does not credit you the HST New Housing Rebate, you will need to pay the same to the Builder as an Adjustment on final closing.

To recover your HST New Housing Rebate, you will need to apply for the HST New Housing Rebate yourself after final closing with the Builder. To be eligible for the same, you will need to have acquired the property to move into the property and that you will have actually moved into the property after closing with the Builder. Please note that if the Assignor had used the property for rental purposes after taking possession on occupancy, it will affect your eligibility for the HST New Housing Rebate and it is important to ensure the Assignor has not done so.

If you are buying on Assignment for investment purposes, you will need to obtain an HST Rental Rebate by entering into a lease to a Tenant to move into the property for at least a one-year period and apply for the HST Rental Rebate within 2 years of your final closing.

You are advised to speak to a real estate lawyer about the HST Rebate applicable to your Assignment purchase.

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Assignments and Extensions of the Closing Date (Ontario)

I represent the Assignee in a transaction for a condo under construction.

The original Agreement of Purchase and Sale with the Builder provides for a closing date of June 30th.

The Assignment specifically states that “profits” are to be paid on completion of original Agreement. The closing is now delayed.

Assignor is demanding that his profits be paid on 30 June using the “time is of the essence” clause contained in the Assignment. Is this accurate?

The question here is as follows:

“is the first buyer’s consent necessary to an extension of time for closing under the initial sale agreement?”

The answer here, would be “no”, provided you used the standard Form OREA Assignment Agreement. This naturally begs the further question, “if you are a Seller, should you include additional clauses for your own protection?” And, here, the answer would be “yes”.

The “time of the essence” clause in the second agreement (the assignment) has no bearing on this issue. Extensions and alterations all take place under the original agreement (the purchase). By virtue of the OREA Assignment, full authority to “extend” was transferred by the original Buyer to the new Buyer. That doesn’t need to be the case. The Assignor could have negotiated some input/ money/ restrictions/ consent, but I gather that he did not. So, it’s a little too late now.

The closing on deal #2 was predicated on completion of deal #1. It didn’t have to be, but again, if that’s the deal, then, that’s the deal.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

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New Tax Rules for Real Estate Assignments and Flipping

Written by Sukhman Sandhu

Blog | real estate law, june 6, 2022.

To combat the sharp rise in real estate prices, the Canadian government has proposed new GST/HST rules in relation to Assignments (effective May 7, 2022) and Income Tax rules in relation to flipping real estate in general (effective January 1, 2023).

GST/HST to Apply for all Assignment Sales

As of May 7, 2022, where an individual sells an assignment of a new build or substantially renovated residential property, the transaction will be subject to HST, regardless of original intentions, as per the Canadian Excise Tax Act (“ETA”). Every individual assignor of residential real estate will now have to collect GST/HST on their assignment profit and remit it to the CRA.

Previously, if the original intention of entering the pre-construction Agreement of Purchase and Sale (APS) was for personal use, GST/HST did not apply to the assignment agreement. GST/HST previously only applied if the original intention was to sell for profit or flip the property. Effective May 7, 2022, whatever your intention, GST/HST will apply on the assignment profit.

Accompanied with some good news, the new rules do clarify that HST is no longer charged on recovered deposits. Prior to May 7, 2022, despite the court ruling against the CRA in a previous case dealing with this issue, the CRA continued to represent to tax payers that if the assignment is subject to GST/HST, the amount provided from the assignee (new buyer) to the assignor (original buyer) which reimburses the assignor for the assignor’s deposit to the builder is also subject to GST/HST. This created double taxation as the deposit that the assignor paid to the seller/builder is already subject to GST/HST.

For illustration purposes, envision Carrol purchased a new construction residential property for $1,200,000 and paid the builder’s lawyer a deposit of $200,000. Subsequently, Carrol entered into an assignment agreement for the assignment sale price of $1,500,000. Carrol in this situation is known as the ‘assignor’ and the individual who purchased from her is known as the ‘assignee’. The assignee must pay $500,000 to Carrol ($300,000 for the difference between assignment sale price of $1,500,000 and original purchase price of $1,200,000 + $200,000 to reimburse the assignor for assignor’s previous deposit to builder/builder’s lawyer) and $1,000,000 to the builder to complete the purchase (not including any closing/miscellaneous fees).

Prior to May 7, 2022, if Carrol’s original intention was to purchase for personal use, she would not be responsible to pay any HST/GST in relation to the assignment sale.

Prior to May 7, 2022, If Carrol’s original intention was not for personal use (i.e. investment property), then she would be liable to pay GST/HST on $500,000 (both the profit and deposit) which at the rate of 13% would have equaled $65,000. It is important to note that Carrol, on advise of her accountant, could have only paid GST/HST on $300,000 (avoiding any tax on deposit) by only remitting $39,000 and citing previous case ruling against double taxation on recovered deposit to the CRA.

As of May 7, 2022, regardless of Carrol’s original intention, she is liable to pay GST/HST on $300,000 which at the rate of 13% would equal $39,000.

Business Income instead of Capital Gains for Residential Property Flipping

Effective January 1, 2023, a new residential property flipping rule will classify the appreciation amount of all residential properties that are owned for less than 12 months to be business income under the Canadian Income Tax Act (“ITA”). This new legislation change will be subject to limited “life events” exceptions, such as the growth of a household, separation, a disability or illness, an employment change, insolvency, or an involuntary disposition.

Prior to January 1, 2023, investment properties (i.e. rentals) sold within or after 12 months of ownership are subject to capital gains tax which is 50% of business income tax and principal residence properties (owner-occupied) sold within or after 12 months of ownership are entirely exempt from tax.

Growing commentators believe that this proposed Residential Property Flipping Rule may also result in assignment sales treated as business income as opposed to capital gains. This would result in the assignor not only paying GST/HST on the portion of their assignment profit but also adding 100% of the assignment profit amount (minus remitted GST/HST) onto their annual personal income amount. We look forward to receiving further clarification in the near future.

If you are buying or selling investment properties, or have questions or concerns about residential or commercial real estate law in general, contact us at Sukh Law .

Sukh Law publishes articles for information purposes only and is not intended to constitute legal advice.

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