New build assignments: Ensure a smooth, seamless, dispute-free transaction closing
The term “assignment” may be unfamiliar to industry newcomers. In real estate transactions, an assignment refers to the arrangement where the original buyer of a property, known as the “assignor,” transfers their rights and obligations under the Agreement of Purchase and Sale (APS) to another party, the “assignee.” Assignments: A quick brief If a buyer assigns a property to another party prior to closing, the original buyer remains responsible until closing, acting as the assignor alongside the assignee (the new buyer) to the seller.It’s essential to note that this process occurs before the assignor closes on the property and takes legal possession (title). In this arrangement, the assignee steps into the role of the buyer and completes the transaction with the seller, requiring minimal continued involvement from the assignor beyond the closing. New build assignments require a complex, non-standard process Assignments for new builds are particularly complex and must be handled differently than standard processes that real estate agents usually follow. When dealing with new build assignments, it’s critical to obtain the builder’s approval through their lawyer and thoroughly review the assignment agreement.Having a lawyer review the document on behalf of either the assignee or the assignor is advisable, as many issues arise with the drafting of the Assignment APS. One key issue is the allocation of the purchase price. Buyers often misunderstand that, while paying, for example, $600,000 for a property — which includes payments to both the builder and the assignor — they must also reimburse the assignor for their original deposit to the builder. Consequently, the total cost effectively becomes $600,000 plus the return of the initial deposit, a detail that frequently leads to disputes during the Assignment Statement of Adjustments close. Different, additional charges can lead to widespread buyer confusion & frustration Also, the Statement of Adjustments provided by the builder may include various charges — such as for development, levies, Law Society fees and potential legal fees for discharging title charges — that can complicate the financial picture for assignees.For condominium assignments, there will also be adjustments for common expenses and occupancy fees. The pandemic has caused significant increases in these charges, with utilities that once cost $1,500 now often exceeding much higher figures, creating points of contention between real estate lawyers and builders. A notable example is Ashton Meadows in Stayner, Ontario, where builders informed purchasers that they would require an additional $175,000 due to rising costs. Previously manageable development charges have surged from about $3,000 for condominiums and $5,000 for houses, up to $20,000 and more for various property types, leading to widespread confusion and frustration among buyers. Vetting the seller: A key element Another critical element in the assignment of new builds involves vetting the seller by requesting full disclosure, which is essential for ensuring your licence. This differs significantly from purchasing a resale home, as the typical issues usually come down to outstanding water or property tax bills that require resolution, which is easily discoverable through tax/water certificates obtained by the buyer’s lawyer.Agents must ensure that all documents and communications from the builder to the assignor are collected and provided to the assignee, both for their review and their solicitor’s review. When requesting anything for an assignment, you must do so in writing via email so that there’s a proper paper trail. Miscommunication about financial responsibilities often arises from miscalculated Schedule B calculations or agents failing to convey accurate information, which can lead clients to mistakenly believe the cost covers the entire property without additional financial obligations. Crucial to work collaboratively so both assignor and assignee can close Having worked in a law firm, I’ve had exposure to the challenges faced by both legal (lawyers) and real estate (agents) professionals. It’s vital to work collaboratively to ensure that neither the assignor nor the assignee is left unable to close, as the builder’s assignment specifies that the assignor remains liable until the transaction concludes.This continual responsibility highlights the importance of collecting all necessary information, obtaining the Tarion (warranty) certificate and the PDI (pre-delivery inspection) for deficiencies and ensuring a timely exchange of documents to prevent complications. Intent matters significantly During the assignment process, intent matters significantly. If the assignor originally purchased the property purely for investment while the assignee intends to owner-occupy it, the assignee may not qualify for the HST rebate.In such cases, the assignee could face unexpected additional costs, especially if the purchase price exceeds $500,000, considerably increasing financial burdens. The intent of the assignor regarding occupancy and primary residency must be evaluated to determine its impact on the purchase price and the assignee’s eligibility for rebates.If the assignee fails to close, the assignor might be compelled to complete the purchase or risk liability. Builders typically pursue payment from whoever they see fit, which can potentially lead to disputes and claims between the assignor and assignee. These issues can be complex, underscoring the necessity for thorough documentation and complete disclosure to protect all parties involved. Ensuring strong collaboration and meticulous planning throughout the assignment process is the best defense against disputes. Enjoying this article?Get the latest REM articles in your inbox 3x week so you stay up to date on the latest in the Canadian real estate industry Success! Email Subscribe The post New build assignments: Help your clients ensure a smooth, seamless, dispute-free transaction & closing appeared first on REM.
Canadian Condominium Construction Challenges
Canada’s condominium and apartment construction market is facing various challenges in 2024, as rising costs, slower demand, and financing difficulties put pressure on developers. While rental construction has risen, condominium starts have declined in most of the country’s largest markets. Condominium development in the first half of 2024 is not keeping pace with the country’s growing population and urban expansion. Outside of Alberta, condominium projects have slowed as developers struggle to meet pre-construction sales targets and secure financing, according to the Canada Mortgage and Housing Corporation’s Fall Housing Supply Report.Condo Starts in Canada’s Largest CitiesDespite a general increase in overall housing starts, condominium apartment starts have declined in most major Canadian cities. Total housing starts across the six largest CMAs increased by 4% in the first half of 2024 compared to the same period in 2023, although, when adjusted for population growth, these numbers are flatter.Within these housing start numbers, there has been a slowdown in condominium starts. Particularly in Toronto and Vancouver, where investors have historically been more active, high financing costs and lower demand have made pre-construction condominiums less appealing. This has resulted in developers struggling to meet the minimum pre-construction sales thresholds necessary to secure financing, leading to delays and, in some cases, project cancellations.The condominium segment has also seen a marked regional variation. In Calgary and Edmonton, condominium apartment starts increased, reflecting the suitable economic conditions and demand for these housing options in these areas. Competition Between Condo and Purpose-Built Rental Construction Purpose-built rental construction has provided competition for condo construction, as rentals starts surged to record levels. From January to June 2024, purpose-built rental apartment starts in the six CMAs rose to 22,891 units, continuing a trend of significant growth in rental supply. This represents a nearly 14% increase compared to 2023.However, purpose-built rentals, particularly in Toronto and Vancouver, are also seeing increased competition from condominium apartments. With many condominium investors choosing to rent out their units due to softer resale markets, the inventory of available rental units has grown. This has had a stabilizing effect on rental prices. The CMHC notes that, in some cases, newly built purpose-built rental units are priced comparably to rental condominiums, further blurring the line between these two segments of the rental market. The role of investors in the condominium market remains a factor. In cities like Toronto and Vancouver, where the secondary rental market relies heavily on investor-owned condominiums, higher interest rates have dampened investor enthusiasm.Source: CHMCSource: CHMCFocus on CompletionsDevelopers have been prioritizing clearing a backlog of projects under construction. Since the pandemic, construction timelines have been extended due to labour shortages, supply chain issues, and rising costs. By the end of 2023, the number of units under construction in the six CMAs had reached record highs.In the first half of 2024, some of these constraints began to ease. The Building Construction Price Index (BCPI) for apartments, as reported by Statistics Canada, increased by 4% across markets, a significant reduction from the 8% growth seen in the previous year. Toronto, in particular, saw the sharpest deceleration, with the BCPI falling from 15% in 2023 to just 5% in 2024.Factors for Condo SuccessThe CHMC indicates that those condominium projects that secured enough sales to proceed were smaller and less costly, on average.
The 9Hundred Signature Residences: New Luxury Development in Toronto’s West End
Toronto’s west end is changing, and The 9Hundred Signature Residences is a standout addition that promises to enhance the area’s urban landscape. Developed by Harhay Developments, this master-planned community blends innovative design, modern living spaces, and a full suite of premium amenities, positioning itself as one of the city’s most anticipated residential projects. Offering an array of luxurious apartments, ground-level townhomes, and vibrant retail and office spaces, with planned occupancy for June 2027, The 9Hundred is an ambitious project that redefines what it means to live in a dynamic, evolving part of Toronto.Strategic Location at The East MallNestled in Toronto’s Eringate-Centennial-West Deane neighbourhood, The 9Hundred Signature Residences boasts a prime location that balances convenience with access to green spaces. Positioned near major highways like the 401 and 427, as well as Pearson International Airport, this development is perfect for those who prioritize connectivity. The upcoming Martin Grove subway and LRT station will further enhance transit options, making the downtown core and other parts of the Greater Toronto Area even more accessible.Beyond transportation, The 9Hundred is located within walking distance of local parks, scenic ravines, and trails along Mimico Creek, offering a rare opportunity to experience nature just steps from home. Residents will also benefit from proximity to shopping, restaurants, and entertainment options, while local schools and services make it an ideal location for families.Architectural Innovation by Core ArchitectsThe architectural vision, created by Core Architects, sets it apart from other developments in the area. The project consists of four interconnected high-rise towers that are visually striking and architecturally daring. The design focuses on creating an interconnected community, blending modern aesthetics with practical functionality. The towers’ sleek glass facades provide sweeping views of both the urban skyline and nearby green spaces, while generous balconies extend each suite’s living area, offering a blend of indoor and outdoor living.Diverse Choices of Luxurious ResidencesThe 9Hundred offers a diverse selection of suites, ensuring that there is something for every lifestyle. The units range in size from 476 to 1,095 square feet, with one-bedroom, two-bedroom, and three-bedroom configurations. Ground-level townhouses are also available, offering a unique option for those who prefer a more spacious, home-like environment within the condo community. Each residence is crafted with attention to detail, featuring customizable finishes that allow buyers to tailor their homes to their individual tastes and preferences. The newest technology in smart home technology will be included.Open-concept layouts make optimal use of space, while large windows maximize natural light and offer stunning views of the surrounding area. Private balconies and terraces extend living spaces outward, creating opportunities for relaxation and entertaining in a stylish outdoor setting.Top-Tier Amenities for Modern LivingLiving at The 9Hundred Signature Residences will mean access to a comprehensive range of best-in-class amenities that cater to every facet of modern life. Residents can unwind at the cosmopolitan-inspired outdoor pool, located on the podium level, which creates an elevated experience and ambiance. Fitness enthusiasts will appreciate the state-of-the-art wellness centre, equipped with cutting-edge fitness technology, ensuring all health and wellness needs are met.For families, the dedicated children’s play area offers a safe and engaging space for little ones to explore, while pet owners will find the on-site pet spa and outdoor pet park a convenient bonus. Other communal amenities include a media room, a library, a games room, and coworking spaces, all designed to foster a sense of community and connection among residents. Social gatherings can be hosted in the elegant party room, while outdoor terraces and private dining areas provide additional venues for entertaining guests.The development’s public park and daycare centre make life easier for families, providing green spaces for recreation and essential services just steps from home. Furthermore, The 9Hundred’s electric vehicle charging stations, parcel storage, carshare program, and complimentary local shuttle service reflect the building’s commitment to providing convenience and sustainability in urban living.Unmatched Convenience and ConnectivityFor residents who rely on transit or prefer a car-free lifestyle, The 9Hundred’s location could not be more ideal. The upcoming Martin Grove subway and LRT station will be within walking distance, drastically improving access to the city’s public transit network. Additionally, the development’s proximity to Pearson International Airport makes it a prime choice for frequent travellers. With nearby access to highways 401 and 427, residents can easily navigate the GTA and beyond, while the growing commercial hub surrounding the airport ensures that business and career opportunities are just a short drive away.The neighbourhood’s Walk Score and Transit Score reflect its superior connectivity, and the presence of nearby schools, retail options, and restaurants provides all the conveniences of urban life without sacrificing comfort or tranquillity.Key Details and TimelineFor investors, The 9Hundred Signature Residences presents an appealing opportunity. The projected average return on investment (ROI) is 47.50%*. With units starting at $631,000, the development offers high-end living. As Toronto’s west end continues to experience growth and development, The 9Hundred is well-positioned to benefit from the area’s rising property values and the increased demand for quality urban housing.Scheduled for occupancy in June 2027, this master-planned community will emerge as a desirable option for both homeowners and investors alike. Its combination of luxury, location, and community-oriented amenities is likely to position The 9Hundred as a sought-after location.About the DeveloperWith over three decades of experience, Harhay Developments has established itself as a leader in Toronto’s real estate market. Harhay is known for its innovative approach and attention to quality. Specializing in boutique residential and mixed-use projects, Harhay has consistently delivered standout developments that integrate seamlessly into the urban fabric. The 9Hundred Signature Residences is an example of Harhay’s commitment to creating spaces that cater to modern lifestyles while enhancing the surrounding community.The 9Hundred Signature Residences offers an opportunity to live or invest in one of Toronto’s most exciting and fast-developing neighbourhoods. With its bold architecture, thoughtfully designed living spaces, and comprehensive amenities, this development aims to deliver luxury, convenience, and forward-thinking urban design.
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