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High risk assignment - Advice Needed

chkolnikea

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Hello everyone,

I hope you can lend me some of your experience on a purchase I want to make (I am from Toronto, just FYI). I am looking to buy an assignment for a pre-construction condo that should occupy in 4 months, and close (estimate) in 8 months.

The builder does not allow assignments (at least they dont approve them).

What the seller is offering me is to add my name to the Purchase and Sale agreement at the builders office. And he will also sign an assignment agreement between us (but not builder).

In return he wants his deposit and 50% of the profit, with the remaining 50% when I close on the unit.

Can someone help answer these few questions for me?

1. What does adding my name to the P&S contract give me legally speaking?
2. With my name on the P&S will I be able to take title upon closing or will the original person have to close and then resell to me?
3. Would you advise against such a transaction because of a lack of consent from the builder?

My biggest concern is that I give up $100,000, then the seller leaves the country (theoretical risk), and I would be stuck with nothing. In such a case would I have rights to the unit as my name is on the P&S and I have an assignment agreement?

Thank you very much for your help, this deal could close as soon as this/next week!

- Guy
 
Hello everyone,

I hope you can lend me some of your experience on a purchase I want to make (I am from Toronto, just FYI). I am looking to buy an assignment for a pre-construction condo that should occupy in 4 months, and close (estimate) in 8 months.

The builder does not allow assignments (at least they dont approve them).

What the seller is offering me is to add my name to the Purchase and Sale agreement at the builders office. And he will also sign an assignment agreement between us (but not builder).

In return he wants his deposit and 50% of the profit, with the remaining 50% when I close on the unit.

Can someone help answer these few questions for me?

1. What does adding my name to the P&S contract give me legally speaking?
2. With my name on the P&S will I be able to take title upon closing or will the original person have to close and then resell to me?
3. Would you advise against such a transaction because of a lack of consent from the builder?

My biggest concern is that I give up $100,000, then the seller leaves the country (theoretical risk), and I would be stuck with nothing. In such a case would I have rights to the unit as my name is on the P&S and I have an assignment agreement?

Thank you very much for your help, this deal could close as soon as this/next week!

- Guy

Scam alert!! Talk to a lawyer, and disclose everything.

Out of curiosity, how well do you know this person? And why would you think, even "theoretically", that he might leave the country?
 
Scam, Scam, Scam.
 
Well. I do have his Purchase and Sale agreement. And I will be adding my name to the agreement at the actual builders office (which will prove that this individual owns this unit. I will also have confirmation from the builder that the deposit is in good standing with the builder from my seller.

Also the agent is reputable, I've been to his office and have talked to people who have done business with him.

I just want some advise on how to protect myself in this case. I don't think its a scam.

It's simply a situation where the builder does not allow assignment, and therefore in order to lock in a good price I need to address these risks.
 
Well. I do have his Purchase and Sale agreement. And I will be adding my name to the agreement at the actual builders office (which will prove that this individual owns this unit. I will also have confirmation from the builder that the deposit is in good standing with the builder from my seller.

Also the agent is reputable, I've been to his office and have talked to people who have done business with him.

I just want some advise on how to protect myself in this case. I don't think its a scam.

It's simply a situation where the builder does not allow assignment, and therefore in order to lock in a good price I need to address these risks.

You could have him to sign an undertaking to close and sell and also a power of attorney to negotiate on his behalf in case he is not present at the time of closing
 
Interesting advice. Can you give me a little bit more detail about what an "undertaking to close" is?

Thanks!

Any advise from anyone on how to secure my cash in case builder falls through and my buyer is nowhere to be found? Ie: getting my cash back.

Are there any practical methods to obtain security against my deposit from him (ie: lien against an asset of somesort from him, or other method?).
 
Interesting advice. Can you give me a little bit more detail about what an "undertaking to close" is?

Thanks!

Any advise from anyone on how to secure my cash in case builder falls through and my buyer is nowhere to be found? Ie: getting my cash back.

Are there any practical methods to obtain security against my deposit from him (ie: lien against an asset of somesort from him, or other method?).


if you're not taking direct 'assignment', shouldn't the funds be held in trust with a lawyer or realtor ???
 

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