Assignment of Contract

An assignment of contract is the transfer of a buyer's rights and obligations under an unfulfilled purchase contract to a third party before the original transaction completes. The original buyer, known as the assignor, sells their contractual position to a new buyer called the assignee, who then steps into the original contract and proceeds to completion with the seller or developer. This arrangement is especially common in BC's presale new-construction condominium and townhouse market, where years may pass between signing and completion. The original contract remains in force; only the party holding the buyer's position changes.

Whether a developer must consent to an assignment depends entirely on the terms of the original presale contract, which typically includes an express clause either permitting, restricting, or prohibiting assignment. Many BC developers require written consent and charge an assignment fee as a condition of approving the transfer. Buyers should review the presale contract carefully before signing to understand any assignment restrictions, since violating a no-assignment clause could constitute a breach of contract. Licensed real estate professionals operating under the Real Estate Services Act and BCFSA guidance are required to present contractual terms accurately to their clients.

Yes, profits from an assignment of a presale contract in BC may be subject to multiple overlapping tax regimes. The BC Home Flipping Tax, established under the Residential Property (Short-Term Holding) Profit Tax Act, SBC 2024, c. 19, may apply where the property interest is held for fewer than 730 days. At the federal level, the Residential Property Flipping Rule under sections 12(12) to 12(14) of the Income Tax Act may treat profit as fully taxable business income where the interest is held fewer than 365 days. Assignors should consult a qualified tax professional to determine which rules apply to their specific circumstances.

In most cases, yes — CRA's GST/HST Memorandum 19-2-1 treats the assignment of a presale residential contract as a taxable supply under the Excise Tax Act, meaning GST is generally collectible on the assignment fee or profit received by the assignor. The GST treatment of presale assignments can be complex, particularly regarding how the tax applies to the assignor versus the assignee and whether the assignee can claim a new housing rebate. Because these rules are governed federally under the Excise Tax Act and CRA administrative guidance, parties to an assignment should seek advice from a tax professional familiar with GST and real estate.

Under the BC Property Transfer Tax Act, PTT is generally payable at completion when the title to the property is registered in the assignee's name, and the tax is calculated on the fair market value of the property at that time rather than on the original contract price. The assignment itself — the transfer of the contractual right before completion — does not typically trigger a separate PTT event, but the assignee pays PTT as the registered purchaser upon title transfer. PTT applies at the standard rates of 1% on the first $200,000, 2% on the portion between $200,000 and $3,000,000, and 3% on the portion above $3,000,000, with an additional 2% on residential property value exceeding $3,000,000. The assignee should also confirm eligibility for any applicable exemptions, such as the Newly Built Home Exemption for qualifying properties up to $1,100,000.

Licensed real estate professionals in BC operating under the Real Estate Services Act (RESA) and regulated by the British Columbia Financial Services Authority (BCFSA) must provide full and accurate disclosure of all known material latent defects and all relevant contractual terms, including assignment restrictions, fees, and conditions. Where a licensee represents both the assignor and the assignee in the same transaction, the licensee must comply with BCFSA's rules on limited dual agency, including obtaining informed written consent from both parties. Licensees are also required under RESA and its Rules to disclose any direct or indirect interest they hold in a transaction. Remuneration arrangements related to the assignment must be handled in accordance with RESA's trust account and remuneration provisions.

Yes, many presale assignments in BC involve strata lots in new condominium or townhouse developments, which upon completion will be governed by the Strata Property Act, SBC 1998, c. 43. However, at the time of the assignment — before the strata plan is deposited and the unit is completed — the Strata Property Act's operational provisions (such as those relating to Form B information certificates, strata bylaws, and contingency reserve funds) have not yet come into force for that unit. Once the strata plan is deposited and the assignee takes title, all Strata Property Act requirements, including any applicable strata bylaws and the new owner's obligations to the strata corporation, will apply. Assignees should review any available disclosure statements and developer-filed documents to understand the anticipated strata structure.

The BC Home Flipping Tax, established under the Residential Property (Short-Term Holding) Profit Tax Act, SBC 2024, c. 19, is designed to apply to profits from the disposition of residential property interests — including presale contract assignments — where the property is held for fewer than 730 days. The holding period for a presale assignment is generally calculated from the date the assignor entered into the original presale contract to the date of the assignment. Consult the current BC Government guidance and the legislation itself for the precise calculation methodology and any applicable exemptions, as the Act contains specific provisions for life events and other circumstances. This tax is administered by the BC Ministry of Finance, and affected parties should seek qualified advice to determine their specific liability.

If an assignor dies before the assignment completes or before the original presale contract closes, their interest in the contract forms part of their estate and is dealt with under the Wills, Estates and Succession Act (WESA) of BC. The executor or administrator of the estate would generally have authority to complete, enforce, or potentially assign the contractual right, subject to the terms of the original presale contract and any developer consent requirements. The estate's ability to assign or complete the contract will depend on both the contractual terms and the estate administration process under WESA. Legal advice from a BC estate lawyer is important in this situation given the intersection of contract law, estate law, and potential tax obligations.

Yes — the collection, use, and disclosure of personal information in connection with an assignment transaction is governed in BC by the Personal Information Protection Act (PIPA), which requires that personal information be collected only for identifiable purposes, with consent, and used only in ways consistent with those purposes. A licensee or developer sharing an assignor's or assignee's personal information with third parties — such as the counterparty, lenders, or other service providers — must do so only to the extent necessary for the transaction and with appropriate consent or a recognized PIPA exception. Additionally, any unsolicited commercial electronic messages sent in connection with marketing assignment opportunities must comply with Canada's Anti-Spam Legislation (CASL), including obtaining express or implied consent before sending. Parties handling personal information in assignment transactions should review their obligations under both PIPA and CASL.