Assignment

An assignment is the transfer of a right or an obligation — including a mortgage — from one party to another, so the receiving party steps into the position of the original party. In Canadian mortgage practice the word appears in several distinct situations, and the consequences differ depending on what is being assigned.

Assignment of a mortgage or charge

When a lender sells or transfers its interest in your mortgage to another lender, it does so by assigning the mortgage (often called an assignment of charge) and registering that transfer in the provincial land registry. The borrower usually keeps the same mortgage term, interest rate, balance and payment schedule; what changes is who collects the payment. A mortgage is a contract, so the assignment transfers the lender's rights to receive payment and to enforce the charge — it does not create a new loan.

Lenders are expected to notify the borrower when the party collecting payments changes. Practically, that means updating pre-authorized debit details and the mailing address for statements. A borrower who wants to move the mortgage to a different lender is instead doing a switch or a refinance, not receiving an assignment.

Assignment of a purchase contract

A buyer who has signed an agreement of purchase and sale for a pre-construction home may, if the contract and the builder allow, assign that contract to another buyer before closing. This is commonly called an assignment sale. It typically requires the builder's written consent, and the original purchaser usually remains liable to the builder unless formally released. The Canada Revenue Agency generally treats the assignment of a new housing purchase agreement as a taxable supply for GST/HST purposes — confirm the current treatment with the CRA or a tax professional.

Assignment compared with other transfers

• Assignment — transfers a right or interest, such as a lender's mortgage or a buyer's purchase contract.
• Assumption — a buyer takes over the existing borrower's obligations under an assumable mortgage.
• Subordination — a lender agrees to rank behind another charge on title without transferring it.

Registration and notice matter in every case. An assignment that is not properly recorded in the provincial land registry may not bind third parties, and lenders, title insurers and lawyers rely on the title record when a home is sold or refinanced. Because land registration is provincial, forms and steps vary across Canada; a real estate lawyer or notary can confirm what applies to a specific transaction.