To sell an unassigned pre-construction condo during probate in Ontario, the executor must obtain a Certificate of Appointment of Estate Trustee from the court and secure written consent from the developer. The estate is generally responsible for builder assignment fees, which can range from $5,000 to $10,000 CAD, as well as applicable estate administration taxes.
Losing a loved one is an incredibly emotional and overwhelming experience. 💔 The administrative burden becomes even heavier when you discover the deceased signed a contract for a pre-construction condominium that has not yet been built or closed. As the executor (Estate Trustee), you are suddenly thrust into a complex web of real estate contracts and provincial probate laws.
Whether the unbuilt condo is located in the bustling skyline of Toronto, the growing suburbs of Mississauga, or downtown Ottawa, the estate remains legally bound by the original Agreement of Purchase and Sale (APS). Because the deceased did not yet own the physical property-only the contractual right to buy it-you cannot simply list it on the open market. In this guide, we will detail how to successfully navigate an assignment sale during Ontario probate as of June 2026.
Step-by-Step Process for an Estate Assignment Sale in Ontario
Dealing with condominium developers requires precision and legal backing. 📋 Most developers strictly prohibit assignment sales (selling the contract to someone else before closing) without their explicit consent. Here is the legally sound process most executors follow.
Step 1: Locate and Review the Agreement of Purchase and Sale (APS)
Your first critical task is to find the original APS signed by the deceased. Look through their physical filing cabinets, email accounts, or contact their real estate agent. You must review the specific “Assignment Clause” buried in the dozens of pages of builder jargon.
While many builders completely forbid assignments to prevent investors from flipping units, death is a special circumstance. 📝 Most developers will cooperate with an estate, but you need to know exactly what the contract demands regarding legal fees, builder approval, and marketing restrictions.
Step 2: Apply for Probate (Certificate of Appointment)
A builder will not allow you to assign the contract based solely on the Will. They need absolute legal certainty that you have the authority to act. You must file an Application for a Certificate of Appointment of Estate Trustee with the Superior Court of Justice.
The value of the pre-construction contract must be included in your probate application. 💰 Generally, you value it based on the deposits paid by the deceased up to the date of death, plus any market appreciation (the premium). You will pay the Estate Administration Tax (probate fee) on this total amount.
Step 3: Formally Request the Developer’s Consent
Once you receive your court certificate, your law firm must officially contact the developer’s legal team. You will request formal consent to assign the APS to a new buyer due to the death of the original purchaser.
The developer will usually require you to sign an Assignment Agreement. 🚨 They may also impose strict marketing rules, such as forbidding you from listing the unit on the Multiple Listing Service (MLS) to prevent you from competing with the builder’s own unsold inventory.
Step 4: Hire a Specialized Real Estate Lawyer and Realtor
Assignment sales are not standard real estate transactions; they are the sale of a legal contract. You must hire a local real estate agent who specializes in “exclusive” or “off-market” assignment sales, especially if the builder restricts MLS advertising.
Equally important is retaining an experienced real estate lawyer. ⚔ They will draft a rigorous Assignment of Agreement of Purchase and Sale, ensuring the new buyer takes over all future closing costs, development levies, and occupancy fees, entirely releasing the estate from liability.
Step 5: Negotiate the Sale and Pay Builder Fees
When you find a buyer, they will pay the estate the original deposits plus (or minus) the negotiated profit margin (the premium). However, the developer usually charges an “Assignment Fee” for processing this paperwork.
Once the assignment is fully executed and the builder’s fees are paid, the estate receives its funds. 📥 These funds are then deposited into the estate’s trust account to pay off any remaining creditors or the Canada Revenue Agency (CRA) before distributing the residue to the beneficiaries.
How Much Does it Cost in Ontario?
Executing an assignment sale during probate involves numerous legal and administrative expenses. 💵 Here is a breakdown of what the estate should expect to pay:
- Builder Assignment Fees: Developers typically charge between $5,000 and $10,000 CAD just to grant consent and process the assignment paperwork.
- Estate Administration Tax (Probate): Ontario charges roughly 1.5% (or $15 per $1,000) on the value of the estate assets exceeding $50,000 CAD.
- Realtor Commissions: A specialized agent will usually charge 4% to 5% of the total assignment sale price.
- Law Firm Fees: You will need both an estate lawyer for probate (usually $2,500 to $5,000 CAD) and a real estate lawyer for the assignment (usually $1,500 to $3,000 CAD).
| Phase of Process | Primary Expense (CAD) | Who Pays? |
|---|---|---|
| Filing for Probate | 1.5% Estate Administration Tax | The Estate |
| Securing Developer Consent | $5,000 – $10,000 Assignment Fee | The Estate (or negotiated with buyer) |
| Closing the Assignment | Realtor and Legal Fees | The Estate |
How Long Does the Process Take?
This is a lengthy process that requires immense patience. ⏱ Preparing the probate application and waiting for the Superior Court of Justice to issue the Certificate typically takes 3 to 6 months, depending on local court backlogs in your municipality.
Once probate is granted, obtaining the developer’s legal consent usually takes another 3 to 4 weeks. Finally, finding a buyer and closing an off-market assignment sale can take anywhere from 1 to 3 months. Plan for a total timeline of 6 to 10 months.
Frequently Asked Questions (FAQ)
What happens if the estate does not have the money for closing?
If the building finishes construction and closing occurs before you can assign it, the estate must close the transaction. If the estate lacks liquid funds, the executor must usually secure a short-term private mortgage or estate loan to close on the property, and then immediately sell it on the open market.
Is HST applicable on an assignment sale?
Yes, assignment sales often have complex Harmonized Sales Tax (HST) implications. The CRA may view the profit (premium) on the assignment as taxable. It is highly recommended to consult a tax lawyer or CPA to ensure the estate does not face an unexpected HST audit.
Can the developer simply cancel the contract?
Sometimes. If the APS explicitly states that the contract is frustrated or terminated upon the purchaser’s death, the developer may simply return the original deposits to the estate without interest. However, in a rising real estate market, developers rarely do this voluntarily.
Do we have to pay capital gains tax on the condo?
Under Canadian tax law, there is a deemed disposition of all assets upon death. If the value of the pre-construction contract increased between the date it was signed and the date of death, the estate may owe capital gains tax on the deceased’s terminal tax return.
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