(June 17, 2016
, posted in Buying)
It's been in the news, primarily negative press about foreign buyers buying a property and "assigning" the contract to another buyer before completion. Yes, it's legal! The negative side to this is that sometimes the assignment came with a price hike allowing the original buyer to make a tidy profit and the seller none the wiser and certainly none the richer!
Section 36 of the Law & Equity Act
provides that the seller's consent to the assignment is not required, provided that notice in writing of the assignment is given to the seller.
So, to prevent lucrative "assignments" resulting in even higher home prices, BCREA has implemented changes to our Contract of Purchase & Sale. Here's a statement from our local real estate board, VIREB:
"On May 16, significant changes took effect regarding assignments of real estate contracts and how they're addressed. Unless otherwise instructed by clients, licensees must state in the contract that it cannot be assigned without the written consent of the seller. Further, any profit from an assignment must now go to the original seller. The new regulations apply to both residential and commercial transactions but exclude development units. Clients can still instruct licensees to omit or change the clauses."
How does this affect you, the buyer? Make sure you read your contract of purchase & sale! If you wish to assign the contract to someone else, be sure you get legal advice on the consequences of the assignment before your subject to's come off!!