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The Real Estate Services Regulation requires this notice to be provided the seller.
BCFSA’s information provides clear, concise, easy-to-read explanations of the requirements for real estate professionals under the Real Estate Services Act (“RESA”), Real Estate Services Regulation (“Regulation”), Real Estate Services Rules (“Rules”), and other applicable legislation.
This information is intended for use by real estate professionals, to support their understanding of the standards they must meet in the delivery of real estate services.
An assignment, as it pertains to RESA, is the transfer of benefits, interests, and rights under a contract from one party (the assignor) to another party (the assignee).
A buyer may wish to assign the buyer’s interest in a CPS to another party for a number of reasons. These include registering the property in the name of a corporation for tax or liability purposes; registering the property in the name of a family member who was not present when the Contract of Purchase and Sale (“CPS”) was signed; divorce; or obtaining a profit over the original purchase price.
Effective May 16, 2016, the Real Estate Services Regulation (“Regulation”) was amended to require that standard assignment terms (Standard Assignment Terms) be included in every CPS prepared by a real estate professional, except where the client provides express written instructions to the contrary.
Unless otherwise instructed in writing by a buyer, all purchase contracts you draft must include the following terms before the offer is presented to the seller or their real estate professional:
- The contract must not be assigned without the written consent of the seller; and
- The seller is entitled to any profits from an assignment of the contract by the buyer or any subsequent assignee
When you provide trading services to or on behalf of a buyer, or you are representing yourself in the purchase of real estate, and you do not include the terms noted above, you must provide a notice to the seller, or their real estate professional, if they are represented. This notice must be made using the required Notice to Seller Regarding Assignment Terms form provided by BCFSA and must be presented along with the contract. The form must:
- Advise the seller to obtain independent professional advice before signing a contract that does not have the required assignment terms as noted above or that those terms have been altered;
- Be made using the required Notice to Seller Regarding Assignment Terms form provided by BCFSA; and
- Must be separate from and not included as part of the contract.
If you are acting on behalf of the seller, you must provide the notice to the seller and inform the seller that the contract does not contain the required assignment terms and advise the seller:
- Whether the contract may be assigned; and
- If the contract may be assigned, advise the seller about any conditions on the rights of assignment of the contract and the seller’s entitlement to profit resulting from assignment
CSAIR is a database of assignments of purchase agreements for all residential condo and strata lots in B.C. that are governed by REDMA.
If you are involved in a transaction with the assignment of a pre-sale contract, that information may be captured in CSAIR.
The Real Estate Development Marketing Act (“REDMA”) requires the inclusion of a standard assignment term in contracts to purchase development property consisting of five or more strata units in a stratified building. This requirement applies to pre-construction and already built stratified buildings.
Please read the information on presales and the legislation for more.
When acting for a “developer”, as defined in REDMA, that is marketing strata units, real estate professionals must ensure that the developer includes the following prescribed terms in its disclosed form of purchase agreement:
- Without the developer’s prior consent, any assignment of this purchase agreement is prohibited.
- An assignment under REDMA is a transfer of some or all of the rights, obligations and benefits under a purchase agreement made in respect of a strata lot in a development property, whether the transfer is made by the purchase agreement to another person or is a subsequent transfer.
- Each proposed party to an assignment must provide the developer with the information and records required under REDMA.
Real estate professionals must also ensure that the developer include the following notice in its purchase agreement:
- Before the developer consents to the assignment of this purchase agreement, the developer will be required to collect information and records under the Real Estate Development Marketing Act from each proposed party to an assignment agreement, including personal information, respecting the following:
- The party’s identity;
- The party’s contact and business information;
- The terms of the assignment agreement.
- Information and records collected by the developer must be reported by the developer to the administrator designated under the Property Transfer Tax Act. The information and records may only be used or disclosed for tax purposes and other purposes authorized by section 20.5 of the Real Estate Development Marketing Act, which includes disclosure to the Canada Revenue Agency.
In B.C., the assignment of a residential tenancy agreement is regulated by the Residential Tenancy Act and the Residential Tenancy Regulation. Under the Residential Tenancy Act, a tenant must not assign its tenancy agreement unless the landlord consents in writing to the assignment. Failing to obtain the landlord’s written consent prior to the assignment could result in the landlord serving the tenant with notice to end the tenancy. Once the assignment has completed, the new tenant assumes all of the rights and obligations of the original tenant under the tenancy agreement, at the same rental rate. Pursuant to the Residential Tenancy Regulation, the landlord may only increase base rent 12 months after the date of the preceding rent increase, notwithstanding that there is a new tenant resulting from the assignment.
If a fixed term tenancy agreement has six months or more remaining in the term, the landlord cannot unreasonably withhold its consent to assign the agreement. Nor can the landlord charge a fee or receive a benefit, directly or indirectly, for providing its consent. If a landlord unreasonably withholds consent or charges a fee, the tenant may dispute the matter pursuant to the Residential Tenancy Act.
Generally, a new tenant is not legally responsible for the acts or omissions of the original tenant, which took place prior to the assignment. The original tenant may, however, remain liable to the landlord for acts of the assignee if:
- Contrary to the RTA, the assignment to the new tenant was made without the landlord’s consent; or
- The assignment agreement does not expressly release the original tenant of its obligations following the assignment.
Commercial leases are complex and may require legal advice as to if and how the assignment process works.Learn more about Residential Tenancy Regulation