When dealing with a property that is still under construction, you have two primary agreements to consider: the sale agreement and the assignment agreement. Let’s break down their roles:
Sale Agreement:
The
sale agreement(also known as the
Agreement of Purchase and Saleor
APS) is the initial contract between the buyer and the builder.
It outlines the terms of the purchase, including the property details, price, payment schedule, and closing date.
The buyer (original purchaser) enters into this agreement with the builder.
Assignment Agreement:
An
assignment agreementallows the original purchaser (assignor) to transfer their rights and obligations under the sale agreement to a new buyer (assignee).
The assignor sells their interest in the pre-construction property to the assignee before the final closing.
Assignments are often undertaken by investors seeking to capitalize on property appreciation between signing the APS with the builder and signing the assignment APS with the assignee.
Importance of Legal Advice:
Seek legal advice when dealing with an assignment.
A lawyer can review the contract, address tax implications, and assist in obtaining the builder’s consent for the assignment.
Both parties (assignor and assignee) will execute an assignment and consent agreement.
In summary, while the sale agreement establishes the original purchase, the assignment agreement allows for the transfer of rights to a new buyer.
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Do we need to execute sale agreement along with assignment agreement if the property is still under construction?
Harry
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10 months
2024-07-09T13:31:22+00:00 2024-07-09T13:31:23+00:00Comment
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