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Condo Assignment Costs

There are two points of view on costs;

1. The Assignor (seller) and

2. The Assignee (buyer).


And there are usually two closing steps:

Step 1: Interim Occupancy (some builder's call this "The Closing Date" and;

Step 2: Final Closing (sometimes called "The Unit Transfer Date")


Summary of Costs

Based on these examples, your actuals may vary:

  • Original Purchase Price: $400,000
  • New Purchase Price: $500,000
  • 6 months occupancy period (can often be longer than a year)
Summary of Costs Assignor  Assignee
 Builder's Assignment Fees: (often 1% of original purchase price)   $4,000  
 Assignment Deposit:  ("soft cost" - held and returned) eg; 5% of New Price    $25,000*
Interim Occupancy Deposit:  (soft cost) could be paid by either side depending on the timing  of Assignment deal e.g.; 5% of Original Price   $20,000*
Interim Occupancy Costs: example based on 8 months @$1,250/mth  - interim fees + metered utilities (e;g;, hydro) + condo insurance. personal services (tv,internet, phone would be extra)    $10,000**
Final Closing Costs:    
 - Realty Fees, e.g.; 6% (plus HST): x New Purchase Price $30,000  
 - HST on Realty Fees - 13%   3,900  
 - Legal Fees including HST $1,500  
 Assignor Total: $35,400  
 Assignor Total as % New Purchase Price (eg $500,000) 7%  
Final Closing Costs:    
 - Legal Fees incl HST (estimate)   $1,600
 - Land Transfer Tax (based on NEW purchase price plus upgrades!) (w/o first time buyer rebates and assuming City of Toronto - dbl fees)   $12,950
 - Adjustments (levies, advanced condo fees, mortgage fees, warranty, etc) - estmiate only; each project is unique but 3-5% of original purchase price is typical   $20,000
 - HST Rebate (may not apply and/or might be reclaimed later)   ($27,000)*

 Assignee Total: (excluding HST rebate, deposits and soft costs)*
and excluding any Interim Occupancy Costs**.

 Assignee Total as % of New Purchase Price (eg $500,000)   7%


Step 1: Interim Occupancy - Assignor
(all amounts are examples, your actuals may vary)

Assignor's Assignment Fees.

Builders typically charge the Assignor an assignment approval fee based on a percentage of the original purchase price plus an Administration Fee plus HST.

Example: Most builders charge an assignment approval fee. For example, if the fee was 1% of your original purchase price and if your condo originally cost you $400,000, you would pay $4,000 in fees to the builder plus HST at 13%. (Ontario) plus perhaps an administration fee plus HST on this.

Builders will typically ask Assignors to pay their legal fees to have the request documents drawn up by their lawyers. This varies between $300 and $600 plus HST. In a recent transaction, it was $400 plus HST @13% or $452.00.

These monies are paid by bank drafts or money orders by the Assignor after a Firm Agreement (Form 150) is reached between the Assignor and Assignee and after the Builder's final approval is obtained. They will require proof of pre-approval from BOTH the Assignor and the Assignee. 

Builders will hold the assignment fees until the assignor's 10-day recission period has expired.  

Builders will sometimes stipulate that Assignors will pay a request denied fee if your request is turned down. This might be about 10-15% of the assignment fee or about $300 on a $250,000 sale. This is rare.

Table: Summary of Costs at Acceptance of Assignment by Builder and assumption by Assignee of Interim Occupancy

($400,000 as original price and $500,000 as the new purchase price)


Assignor Fees at Step 1: Interim Occupancy
(This is when you have an accepted Assignment Agreement conditional ONLY on Builder approval.)




 Builder's Assignment fee - 1% of original price of $400,000 (HST extra) 1%



 Builder's Legal Fees - charged by Builder for assigning (HST extra)  



 Builder's Holdback (if a formal request is denied - most builders do NOT do this).  



Realty Fees incl HST (e.g.; 6%)  split  3.5% for List and 2.5% for Buyer rep (earned but not paid usually until final closing/unit transfer date). Based on New Purchase Price. (HST extra). Freehold properties (vs condo apartments) receive discounts and fees are 5%. See below for other rates. 6%




AssignThisCondo: Schedule of Realty Fees 

PRE-CONSTRUCTION Condo Highrise (unbuilt, no showings, months or years away from closing)

  • Assignment Condo Highrise Realty Fees: 5.5% (3.0/2.5) - with MLS & Not Urgent
  • Assignment Condo Highrise Realty Fees: 6.0% (3.5/2.5) - without MLS and Not Urgent (typical)
  • Assignment Condo Highrise Realty Fees: 6.5% (3.5/3.0) - without MLS and Urgent



  • Assignment Low rise (freehold or condo)  e.g; Detached, Town, Semi
    • Realty Fees:  5.0% (2.5/2.5) - usually shorter build 


RESALE Assignments (built, possible never occupied, highrise, low-rise, freehold or condo)

  • Resale Listing Fees: 5% (2.5/2.5)


Note: All the costs above are ONLY paid if there is a successful assignment transaction


Step 1: Interim Occupancy - Assignor (seller) Costs

There are no costs for the Assignor during the Interim Occupancy period other than the one-time costs shown above as the Assignee has assumed the occupancy costs during this period.


Step 1: Interim Occupancy - Assignee
(all amounts are examples, your actuals may vary)

Step 1: Interim Occupancy - Assignee (buyer) Costs

Deposit on Assignment Agreement - a One-time cost that is returned with interest, if any, on final closing. The Assignee is required to provide a "good faith" deposit to the Assignor with the offer. This would typically be in the range of $30,000-$50,000 or up to 5% -10% or more of the new purchase price.

These monies are called a "soft cost" or for the Assignee as they are held in trust by the Listing Brokerage to secure the assignment agreement and returned to the new buyer (Assignee) at closing. Interest is paid at a prescribed rate on the deposit to the Assignee but it is typically below the minimum threshold and thus zero is paid. A schedule "D" is attached to the Assignment Agreement that specifies the terms. The deposit soft cost is also referred to as an "opportunity cost" to (investment term) since one can calculate a cost of the monies tied up in these deposits instead of other investment opportunities.

Interim Occupancy Deposit to the Builder - One-time cost & returned with interest that is usually zero given current prescribed rates (prime less 3%). The Assignee is required to make this payment to the Builder if the Assignment takes place prior to this key date. Again, deposits are a "soft cost" and returned to whoever pays it at final closing. This deposit is held in trust by the Builder.

The Interim Occupancy Deposit is typically 5% of the Original Purchase Price but could be higher or lower. Using the example of a $400,000 original purchase price, the deposit at 5% would amount to $20,000.

Interim Occupancy Fees - monthly until closing
The Assignee will be required to assume the payment of the interim occupancy fees from the date of acceptance of the assignment agreement until closing. Often, the final closing date is not known at the time Assignment Agreement acceptance. Typically, the time between interim occupancy and closing is 6-8 months but this period can be longer. It would be highly unusual to be longer than 12 months.

Interim Occupancy fees are made up of three factors:

1. Mortgage component that uses a precribed interest rate applied to the original purchase price of your unit. What you paid for it, not what you are selling it for. The interest rate is regulated by the Condominium Act but is typically higher than the competitive market rate. For example in April,2008 when variable mortgage rates were under 5%, the builder mortgage rate was 7.5%.

2. Condo Fees (estimated) e.g.; $050 per square foot of your suite (not counting the balcony).

3. Property Taxes (estimated) e.g.; 0.75% - 1% of original purchase price.

The Assignee does not have to pay any other costs to the builder or assignor and may occupy the unit right away. The Assignee would be responsible to pay for any utilities not included in the condo fees, e.g.; possibly water, hydro (electricity), etc. and personal services like cable tv and telephone. Fire and Liability insurance during the interim occupancy period is mandated by the Builder for both the Assignee to have and the Assignor to insist on (thru a clause in the Agreement).

The mortgage component does not reduce the amount the assignee will owe on closing - no principle is being paid down. For example, over the course of the first full year, the principal paid off on most mortgages amounts to $100-$300 dollars per month on a $200,000 mortgage given current interest rates. eg; 3%. The market price appreciation at a conservative 4% per year would be at least three times this (over $600 per month). The interim occupancy fees represent a fair "rent" in return for occupancy and there is a financial advantage to the Assignee when price appreciation is taken into account. From an Assignee's point-of-view this is preferred to paying these fees and not occupying or renting the unit (not practical if trying to assign).

Step 1: Interim Occupancy - Assignee (buyer) Costs

Assume: Original Purchase: $400,000 and New Purchase Price: $500,000 and 6 months of Interim Occupancy

% $  Total for Period

Deposit on Assignment Agreement - "Soft Cost" - one time & is returned with interest if any.

Based on % of New Purchase Price

10% $50,000

Deposit to Builder at Interim Occupancy (if not already passed) - "Soft Cost" - one-time and is returned at final closing

Based on % of Original Purchase Price, eg; 5%

5% $20,000
Interim Occupancy Fee - monthly and varies by balance owed builder and size (square footage) of the unit plus parking and locker estimated fees. eg 6 months   $1,500 x 6 $9,000
Utilities (not included in Occupancy Fee) eg Hydro eg 6 months   $50 X 6 $300
Fire & Liabilty Insurance eg; 6 months   $30 x 6 $180
Total Non-Recoverable Costs - excl deposits (not a hard cost) for 6 months:     $9,460



Step 2: Final Closing Costs - Assignor
(all amounts are examples, your actuals may vary)


Final Closing Costs  - Assignor (Seller) Costs

The bulk of the closing costs are paid by the Assignee (see below).

a. Realty Fees. The largest single cost for the Assignor. Fees are based on a percentage (%) of the new selling price of the unit plus HST. Example: $500,000 new purchase price x 6% = $30,000 plus $3,900 HST = Total of $33.900

b. Legal fees. Seller fees are less than Buyer fees and typically range around $1,600.00. Note these are a bit less than what is paid for the Assignee. Same as with all real estate transactions - Buyers have more disbursements than Sellers, plus recommended title insurance.

c. Property Tax Holdback. This is often required by the Assignee's lawyer to protect against underpayment of property taxes during the interim occupancy period since the unit was not yet assessed. Example: 6 months x $300/mth = $1,800.

Assignors will get a "Statement of Adjustments and Costs from their lawyer several weeks prior to closing with all these costs determined so that you can be ready with a certified cheque for the amount owing.


Step 2: Final Closing Costs - Assignee
(all amounts are examples, your actuals may vary)


2. Assignee (buyer) Costs

The assignee will pay the following fees and costs as an example:

a. Legal fees. About $1,200-$1,500 plus disbursements and title insurance, typically a total approaching $2,000.

b. Land Transfer Tax (Ontario & Toronto) calculator.  You will pay this tax on the NEW purchase price. For example, a $500,000 price would cost $12,950 (in Toronto, less if outside Toronto). First-time buyers get rebates on both Provincial and City tax (if applicable, of $4,000 & $3,725 respectively). Ask me about this.

c. Levies. All new home or condo sales have levies associated with them. These include development, educational and utility levies (gas, hydro, sewage, etc.) that the builder will allocate to the unit owners at closing. This is are in all new home builder contracts. They are left "open-ended (exact amounts are not provided). Sometimes they are "capped", many times they are not. Typically, these levies are about $3,000-$5,000. The builder can only pass through the actual costs and is not permitted to add profit or administration fees.  Example: If the educational levy was $500,000 for your condo building and there was 200 units in your building, the levy would be $2,500 ($500,000/200). The builder usually notifies the unit owners of these cost 2-3 weeks before closing. Reports.

d. Tarion Warranty Fee: based on the original purchase price net of all taxes including HST so will be based on an amount less than the original purchase price of $400,000, we have been using as an example on this page. I will use a simple formula to create the Net Price example: Gross Original Price (400,000) x HST Factor (100/113 (0.885) = $354,000. As per Tarion's warranty fee schedule, the fee would be about $880.00.

e. HST Rebate. Often the builder will require this be paid back on assignment deals. If assignee is eligible for the rebate (owner occupancy or rented for at least 12 months after final closing) application can be made to get these monies back. Reports. Be warned: This amount can be up to $27,000 on condos valued above $400,000 (based on original purchase price). This applies to ALL new condo purchases, not just Assignments.

f. Other Adjustments. Check the Agreement under "Adjustments" and definitely have these understood prior to closing.

g.  Condo Reserve Fund. Reserve Fund initial payments may be stipulated in the original builder's agreement. We have seen Builder contracts that stipulate a three-month condo fee be paid by the Buyer to "kick-off" the condo reserve fund. With condo fees ranging from $400 to $600 or more, this is something you want to be prepared for at closing. This is a non-refundable cost.

h. Property Tax. Usually required by mortgage/lender to be create a reserve. Check with your lender.

i. Insurance Costs (monthly). The assignee must purchase condo insurance to cover contents and public liability as per the terms of their mortgage. This is similar to renter's insurance but with condos, there are a few extra issues that you should have covered. These include deductibles and special assessments - riders that we recommend you include (not required during the interim occupancy period). Premiums will be about $30-$40 per month.


Total Costs: $25,000 (before first time buyer rebates on Land Transfer Tax(es).

* Based on the example used of a $400,000 original purchase price and a  $500,000 new purchase (assignment) price