Bulk and Investor Assignment Disputes in Pre-Sale Projects

What an assignment is in a pre-sale contract

An assignment transfers a purchaser’s right to acquire a pre-sale unit, a chose in action, to a new buyer before completion. The original purchaser is the assignor, the new buyer is the assignee, and REDMA requires the developer’s consent before any assignment takes effect.

A pre-sale contract confers upon the purchaser the right to acquire a strata lot from the developer before the building is completed and the strata plan is deposited in the land title office. An assignment conveys that right, a chose in action, to a new buyer while the project remains under construction. The assignee assumes the purchaser’s position for the purpose of completion, yet the contract the developer executed with the original purchaser continues to govern the unit.

REDMA establishes a default position. Unless a developer expressly prohibits assignment, every pre-sale contract must provide that assignment is prohibited without the developer’s prior consent, and Policy Statement 16 imposes additional disclosure requirements upon developments of five or more strata lots that permit assignments. The precise mechanics of the developer’s control over assignment reward careful drafting and are a subject in their own right.

An assignment engages three parties and a single transfer. The assignor is the original purchaser who contracted to buy from the developer, the assignee is the new buyer who assumes the right to complete, and the developer is the party whose consent the contract requires. The transfer conveys the right to purchase yet leaves the underlying contract with the developer intact, which is why the developer retains a role in every assignment. The developer’s assignment rules for strata developments govern the operation of consent, fees, and disclosure before any dispute arises.

Why bulk and investor assignments create disputes

Bulk and investor assignments generate disputes because investors who acquired multiple units for resale before completion depend upon a rising market. When prices soften or financing tightens, planned assignments stall, and developer and investor contend over consent, fees, and liability.

An investor who acquires several pre-sale units ordinarily intends to assign the contracts at a profit before completion, a strategy prevalent in active pre-sale markets. That strategy succeeds while values ascend. When the market cools, the pool of assignees contracts, resale prices fall below the original contract price, and the investor looks to the developer for an accommodation the contract does not compel.

Volume distinguishes these disputes from the difficulty of a single purchaser. A developer that sold ten units to one investor bears the risk that a single financing failure arrests all ten at once, imperilling the project’s sales targets and its lender covenants together. The developer’s response to one investor therefore reverberates across the entire tier of units that investor holds.

Several conditions convert bulk and investor assignments into disputes. The investor’s strategy depends upon prices rising before completion, so a cooling market contracts the pool of willing assignees and depresses resale prices below the original contract price. Financing tightens contemporaneously for investor and prospective assignee alike, and because a bulk holder controls several units at once, a single investor’s difficulty propagates across every unit that investor holds. Taxation now sharpens the calculation further, because since January 1, 2025 the BC home flipping tax applies to income from the assignment of a pre-sale contract held for fewer than 730 days, narrowing the margin that once rendered bulk assignment attractive.

Consent and assignment-fee disputes

A developer may withhold consent to an assignment and may levy an assignment fee where the contract permits. Disputes turn upon whether the contract sanctions the assignment, whether consent was withheld within the contract’s terms, and whether the fee is enforceable.

Consent is the developer’s principal instrument of control. Most pre-sale contracts confer upon the developer a broad discretion to grant or withhold consent, and a developer withholds it for commercial reasons: to govern who completes, to superintend the marketing of the remaining units, and to preserve an orderly sales program. A refusal that conforms to the contract holds, while a refusal that ventures beyond its stated grounds invites challenge.

An investor refused consent commonly asserts that the contract did not authorize the developer to withhold consent upon the stated ground, or that the developer waived the restriction, or is estopped by a course of prior consents granted on the project. Fee disputes follow a parallel pattern, the investor contending that the assignment fee exceeds the sum the contract fixes, or that the fee has been applied to a transfer the contract does not treat as an assignment.

The enforceability of the fee, like the validity of a refusal, rests upon the contract, and the dispute reduces to whether the amount and the trigger correspond to what the purchaser agreed. Precise drafting resolves both questions, because the prohibition upon assignment without consent required under the Real Estate Development Marketing Act is only as robust as the consent and fee language the developer constructs around it.

The assignor remains liable: assignment versus novation

An assignment transfers the purchaser’s rights but not the purchaser’s obligations, so the original purchaser, the assignor, remains liable to the developer in privity of contract. Only a novation, which substitutes the assignee and discharges the assignor, extinguishes that liability.

The distinction between assignment and novation determines who bears the loss when a unit does not complete. An assignment conveys the benefit of the contract to the assignee, yet the assignor remains bound to the developer because the developer never released the original covenant, and the privity between developer and assignor persists. A novation is a different instrument altogether: it substitutes the assignee for the original purchaser and discharges the assignor, and developers grant it sparingly and only in writing.

The distinction tells most forcibly at completion. An assignment transfers the purchaser’s rights while leaving the assignor liable to the developer, whereas a novation replaces the assignor with the assignee and releases the assignor. A developer that grants an assignment alone retains the original purchaser’s covenant, and in a chain of successive assignments the developer looks to the party still bound to it rather than to the final holder.

When an assignee fails to complete, the developer looks back to the assignor with which it remains in privity, and a well-advised developer preserves that liability rather than surrendering it inadvertently. ATAC LAW’s litigation practice traces that liability through the assignment documents so that the developer enforces the shortfall against the party truly bound rather than an assignee who has vanished.

Reporting and tax exposure: CSAIR duties

A developer must collect and report every pre-sale assignment in the Condo and Strata Assignment Integrity Register. Omitted or inaccurate filings create compliance exposure, and since September 2025 a developer must take corrective action in respect of past errors and omissions.

The reporting obligation rests upon the developer, not the assignor. Since January 1, 2019, a developer must collect prescribed information concerning every assignment on the project and report it quarterly until the strata plan is deposited. The register links assignment activity to the administration of tax, so a reporting gap is not merely a compliance deficiency but a signal that draws scrutiny to the transaction beneath it.

For each assignment, a developer must collect and report:

• the identity and contact details of every party to the assignment;
• the terms of the assignment agreement;
• the amounts paid for the assignment; and
• the filing itself, quarterly, until the strata plan is deposited.

The register shares its data with the BC Financial Services Authority and the Canada Revenue Agency, aligning assignment reporting with tax assessment, and as of September 30, 2025 a developer that discovers an unfiled assignment or an error in a filing must rectify it. Disputes in this quarter commonly emerge where a reporting gap coincides with an assignment that subsequently fails, so a developer maintains its filings in the Condo and Strata Assignment Integrity Register complete and current as the project’s authoritative assignment record.

Common bulk and investor assignment disputes

The table below sets out the disputes a developer faces on bulk and investor assignments, the circumstances that give rise to each, and the developer’s usual position under a well-drafted contract.

How developers resolve these disputes

Developers resolve bulk and investor assignment disputes through negotiation, the contract’s dispute-resolution clause, or litigation. The strongest position rests upon a precise consent and fee clause, complete CSAIR filings, and proof that the assignor remains liable for any unit that does not complete.

Resolution follows the documents. Where an investor holds units that will not sell on assignment, a developer will sometimes negotiate a revised timeline or a substitute assignee rather than compel a default, because a completed sale is preferable to litigation. Where negotiation fails, the contract channels the contest, and the sums at stake ordinarily justify formal enforcement.

A developer ordinarily resolves a bulk or investor assignment dispute by one of the following means:

1. negotiating a revised timeline or a substitute assignee to complete the sale;
2. invoking the contract’s mediation or arbitration clause;
3. litigating to enforce the consent, fee, or liability terms; or
4. addressing a bulk default unit by unit, combining forfeiture, resale, and an action for the shortfall on each contract.

A bulk default is addressed contract by contract: the developer forfeits each deposit, resells each unit, and recovers the shortfall upon each agreement, looking to the assignor wherever an assignee has walked away. The remedies against a purchaser who does not complete are a subject in their own right, and they combine with assignment liability to furnish the developer a complete claim across the affected units.

When to involve a real estate development lawyer

A developer is best served by engaging counsel before consent is granted or withheld, because the consent decision, the fee, the CSAIR filing, and the assignor’s liability each shape any subsequent dispute. Early advice preserves the developer’s position if an assignment later fails.

Counsel protects the developer at every point of control, from the drafting of the assignment clause to enforcement if an assignee defaults. The value of that involvement is greatest before a decision is taken, because a consent granted loosely or a filing overlooked is difficult to repair once an investor’s units have stalled.

Counsel drafts consent and fee clauses that withstand challenge, advises upon the refusal of consent within the contract so that the refusal holds, and confirms that CSAIR filings are complete and rectified. Counsel further preserves the assignor’s liability so that it remains available if an assignee defaults, and coordinates the forfeiture, resale, and shortfall claims across multiple units where a bulk investor is unable to close.

ATAC LAW acts for British Columbia developers in pre-sale and real estate development disputes, bringing focused experience in REDMA compliance, assignment structuring, and contract enforcement rather than the breadth of a general practice. A developer confronting a contested bulk or investor assignment may speak with ATAC LAW’s real estate development lawyers to protect the project before positions harden.