Flipping Houses with Assignment Clauses – Part 3 of 4
Flipping Houses with Assignment Clauses – Part 3 of 4:
Role of a Realtor
1. The assignor has the right to assign and the assignee has the right to receive a valid assignment by referring to the original contract.
2. A properly drafted and validly executed ‘‘Assignment of Contract of Purchase and Sale — New Development’’ and ‘‘Assignment of Contract of Purchase and Sale — Non-Development’’ are assigned.
3. The seller has been given notice in writing of the assignment (unless the clause on the Assignment Option Clause has been used).
4. The identities of the parties are clear and verified (e.g., proper photo identification, passport, etc., especially when the assignment involves parties with whom the seller may not be familiar); licensees acting for assignors should be particularly careful to establish the identity of the assignor. Realtors should confirm through acceptable identification that the person asking that the contract be assigned is the purchaser on the contract.
5. The assignor’s and the assignee’s rights to the initial deposit under the original contract, if any, are dealt with.
6. In the event that an assignor or assignee is a corporate party, the individual signing on behalf of the corporate entity has the authority to bind the corporation (this may involve conducting a company search and obtaining a copy of the corporate resolution allowing that individual to execute the assignment on the company’s behalf).
Because the procedure and documentation for assignment can be complex and fraught with difficulties, it is in everyone’s best interest for realtors to advise all parties to seek independent legal advice in writing in the drafting of effective and enforceable assignments of any Contract of Purchase and Sale agreement. Realtors should document having provided this advice as a part of contract.
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