To make it simple an "assignment" is the sale of a contract to purchase a pre-construction condominium suite. It usually means that the building has not been registered yet, so no one can take ownership of the unit itself. Only the original contract can be sold. Once the condo has been registered, you can transfer the ownership title. Until then, it’s just the sale of a contract. There are many advantages to these kinds of sales for both the buyer and seller.

What are the reasons why somebody would do an assignment sale?

There are many reasons why someone would want to sell the rights to their condo before it’s been built. A typical scenario would be a buyer may have bought a condo that’s closing in 2 years, but has discovered that he or she needs to relocate to a different province. This buyer may need to sell their agreement to afford a property in their new city. In this case it allows the original buyer to assign the contract onto another party without incurring financial penalties.

For Example: Tom is the Assignor: An Assignor is the original buyer of the unit from the Builder/Developer.

Kyle is the Assignee: An Assignee is the buyer of the Agreement of Purchase and Sale from the Assignor.

Here's an example of "Tom the Assignor" and "Kyle the Assignee"

Tom the Assignor buys a newly developed condo from Toronto Builder & Company for a purchase price of $600,000 with a possession date of 2022

Tom's downpayment is 20% = $120,000

Mortgage amount on closing $480,000

A year and a half later Tom discovers that he needs to move to a different province due to family. However because Tom's condo is not built yet and all of his funds are tied up in his newly purchased condo Tom decided to hire a realtor to help him assign his contract with a new prospect.

Tom's realtor finds a prospect named Kyle that is willing to purchase Tom's agreement for $700,000. The newly assigned contract will cost Kyle $220,000. The intial downpayment of $120,000 plus $100,000. (The difference between the original purchase price $600,000 and the newly assigned purchase price $700,000) The total funds required on closing will be $480,000

Before the condo is registered Kyle will move in the during the interim occupancy period and pay the interim occupancy fees required by builder "Toronto Builder & Company" Once the condo building becomes registered- usually less then one year. Kyle will become the registered owner on title. 

There are many advantages to assignment sales from the both buyer and seller. It allows the seller to legally assign his or hers contract prior to closing and the opportunity to gain equity and the buyer to purchase a suite in there desired location which has been possibly sold out while avoiding excessive competition and often means you pay much less than you would for a resale unit.

The above is a simple example of an assignment and does not factor in closing costs, mortgage regulations, taxes, reimbursement of the seller’s deposits and more must be taken into consideration.