Assignment Question??
Is there a specific contract out there for an assignment deal, or do I need to use a regular contract and add an assignment clause. I was also wondering if anyone could give me an example of what the contract between me and the investor I'm flipping to should include. I assume it's a 1-2 page contract that includes my assignment fee and, well I don't know what else!! Should I just pay an attorney to draw up the forms just to make sure everything is legal? Will the attorney know what to include in my contract with the buying investor? I would love a quick response as I have I potential deal in the works. Thanks guys [ Edited by richyrich on Date 04/28/2004 ]
Here goes nothing ....
This Agreement dated the _____ day of ____________________ is made between _________________________________________
____________ (ASSIGNOR) and ________________________________________________________________________________
(ASSIGNEE), regarding the property described as:
The property address is known as ___________________________________________________________ (SUBJECT PROPERTY)
WHEREAS, ________________________________________ (ASSIGNOR) entered into a Purchase and Sales Agreement dated ____________________, _______ with ___________________________________________ (SELLER) for the purchase of the SUBJECT PROPERTY, and whereas ASSIGNOR wishes to assign its rights and interest in the Purchase and Sales Agreement, it is hereby agreed between ASSIGNOR and ASSIGNEE as follows:
1. Assignment Fee. ASSIGNEE shall pay ASSIGNEE an assignment fee of _____________ U.S. Dollars. Assignment fee is payable at close and shall not become due to ASSIGNOR until that time and unless title to SUBJECT PROPERTY is delivered to ASSIGNEE as per the terms of this contract and the Purchase and Sale contract.
2. Down Payment. ASSIGNEE shall pay ______________________ U.S. Dollars of the Assignment Fee at the signing of this contract. The Down payment is refundable only if the Seller does not perform.
3. Closing Date. Closing is to take place on or before ____________________.
4. Contract for Sale and Purchase Acknowledgement. ASSIGNEE accepts all terms and conditions of the original Contract for Purchase and Sale dated _________________, in its entirety including all addendums associated with this transaction.
5. Hold Harmless. ASSIGNOR shall not be held responsible for the performance of the ASSIGNEE, and shall further be held harmless for any other circumstances arising from or in connection with the SUBJECT PROPERTY or the Purchase and Sales Agreement.
6. Non Performance Acknowledgement. ASSIGNEE has read Paragraph S under Standards for Real Estate Transactions on the original Contract for Purchase and Sale and hereby agrees to abide by its terms. ASSIGNEE agrees that the terms of Paragraph S shall apply to all deposits and down payments tendered under this Agreement
7. Ownership and Property Access Acknowledgement. At the time of this Agreement, ASSIGNOR owns a contract for Purchase and Sale of SUBJECT PROPERTY, ASSIGNOR does not own title to the SUBJECT PROPERTY. ASSIGNOR and affiliated associates do not authorize ASSIGNEE to enter onto the SUBJECT PROPERTY. ASSIGNEE holds ASSIGNOR and associated affiliates harmless from liability arising from ASSIGNEE entering onto the SUBJECT PROPERTY,
8. Limitation of Assignment. It is hereby acknowledged by ASSIGNEE that this Agreement to Assign Contract for Sale and Purchase and the original Contract for Sale and Purchase are not assignable by ASSIGNEE without the express written authorization of ASSIGNOR, authorization of which may be withheld for any reason by ASSIGNOR
9. Additional Disclosures and Acknowledgements.
a. Inspection Report and Subject Property Condition. Assignor and affiliated associates make no warranty express or implied regarding inspection reports, subject property condition or value or other reports provided to ASSIGNEE by ASSIGNOR or third parties concerning this property. ASSIGNEE is advised to independently verify the accuracy of all information contained in reports concerning this property.
b. Real Estate Brokerage Disclosure. ASSIGNEE acknowledges they are conducting a transaction dealing direct1y with ASSIGNOR for the purchase of the SUBJECT PROPERTY. ASSIGNEE Is not relying on or being represented by a real estate brokerage in this transaction.
c. Affiliated Parties Disclosure. ASSIGNOR shall provide a statement of affiliated business arrangements. If any.
d. Lead Based Paint and Energy Efficiency Brochures. ASSIGNEE acknowledges receipt of Lead Paint and Energy Efficiency Brochures.
e. Entire Agreement This agreement constitutes the entire agreement and no modification 01 this Agreement shall be binding unless signed by the parties. No representation, promise or inducement not included in this agreement shall be binding upon any party hereto.
10. Additional Terms and conditions of this Agreement .are as follows:
AGREED AND ACCEPTED:
_________________________________________________ __________________________________________________
ASSIGNOR Date ASSIGNEE Date
_________________________________________________ __________________________________________________
ASSIGNOR Date ASSIGNEE Date
Thanks a million for the copy! This is the contract I use between me and the investor buyer, but I also need to know what to use with my seller. If anyone can help me out I would appreciate it. Thanks again guys!!!
If a contract does not explicitly state that it cannot be assigned, then it is an assignable contract. At least in Virginia.
I invested in a book called 301 Legal Forms & Agreements. It has every contract for every deal I've ever done.
Lori
[addsig]
Ok,
Please explain this to me. So lets say that I find a house and I would like to flip it, what do I need to have signed between myself and the homeowner? Thanks, Tim :-D
Here are the major clauses I would include:
1) "Property purchased." This is a list of items included in the sale. It contains items such as washer/dryer, refrigerator, etc.
2) Have a clause indicating you are paying earnest money in the form of a promissory note. This is legally binding so be careful how much you write it for. This is a safety so the seller who may have a gambling / crack problem doesn't run away with the money. :-o
3) Have an "evidence of title" clause that asks the seller to pay for title search and insurance.
4)Have an whole house inspection clause.
5) Have a clause that grants you access to the property so that you may show it to potential buyers
6) Have a "Default" clause. This is crucial. This basically says that if you can't close for any reason the owner is limited to the amount in the promissory note or earnest money in regards to damages. HOWEVER, TRY REALLY HARD TO CLOSE EVERY DEAL YOU ENTER INTO!!
You don't need a clause that specifically says you can assign the contract but it wouldn't hurt either. Check with a good real estate lawyer in your state. They can be a great help in drafting these contracts.
Happy investing!
HasSpoken - Since I'm in Florida, I use a FAR/BAR contract between me and the homeowner. On the line where you fill in the buyer's name I put "My Name And/Or Assigns" or "My Corp's Name And/Or Assigns". Then under the heading of "Assignability" I check the box that says: "Buyer may assign and thereby be released from any further liability under this contract". Alternatively, you could check the second box that says "buyer is not released from liability" in the event the homeowner objects to that.
Then, when you find another investor to flip the property to, you use an "Agreement for Assignment of Contract" like the one shown in the above post. As with all contracts you are planning to use, review the documents with an attorney before you begin using them.
Steve