Before May 16, 2016, all contracts of purchase and sale are assignable. After May 16, 2016, all residential real estate contracts of purchase and sale are required to include a clause to prevent assignment.
The government passed this legislation in order to prevent people from buying a home and then assigning the contract to someone else in a few months because the price has risen so much that they can sell it right away for a profit.
What does this new legislation mean for you if you are just a regular buyer?
If you are writing an offer in your own name and later would like to add your husband or wife to the title, now you better plan ahead and include your partner’s name in the offer and add an additional notice to the seller about this partial assignment (assigning part of the ownership to another person).
If you have an accepted offer and before the completion date, you have to move because of a job transfer, before May 16, you can assign the contract to another buyer and take a profit in this booming market for your foresight to buy at the right time. But now, you have to renegotiate with the seller to let you assign the contract (the seller has all the negotiating power now so if you are the seller good for you) or just buy the property first, pay your property transfer tax to the government and then sell it (and the buyer can pay the property transfer tax again).
Interestingly, this assignment prevention clause is only for resale residential real estate only.
This new legislation does not apply to developer’s contracts if you are buying presales or commercial real estate.