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DEED OF ASSIGNMENT: EVERYTHING YOU NEED TO KNOW.

A Deed of Assignment refers to a legal document in which an assignor states his willingness to assign the ownership of his property to the assignee. The Deed of Assignment is required to effect a transfer of property and to show the legal right to possess it. It is always a subject of debate whether Deed of Assignment is a contract; a Deed of Assignment is actually a contract where the owner (the “assignor”) transfers ownership over certain property to another person (the “assignee”) by way of assignment. As a result of the assignment, the assignee steps into the shoes of the assignor and assumes all the rights and obligations pertaining to the property.

In Nigeria, a Deed of Assignment is one of the legal documents that transfer authentic legal ownership in a property. There are several other documents like a deed of gifts, Assent, etc. However, this article focuses on the deed of assignment.

It is the written proof of ownership that stipulates the kind of rights or interests being transferred to the buyer which is a legal interest.

Read Also: DIFFERENCE BETWEEN TRANSFER OF PROPERTY THROUGH WILLS AND DEED OF GIFT

CONTENTS OF A DEED OF ASSIGNMENT

Content of a Deed of Assignment matters a lot to the transaction and special skill is needed for a hitch-free transaction. The contents of a deed of assignment can be divided into 3 namely; the introductory part, the second (usually the operative part), and the concluding part.

• THE INTRODUCTORY PART: This part enumerates the preliminary matters such as the commencement date, parties in the transaction, and recitals. The parties mentioned in the deed must be legal persons which can consist of natural persons and entities with corporate personality, the name, address, and status of the parties must be included. The proper descriptions of the parties are the assignor (seller) and assignee (buyer). The Recitals give the material facts constituting the background to the current transaction in chronological order.
• THE SECOND PART (USUALLY THE OPERATIVE PART): This is the part where the interest or title in the property is actually transferred from the assignor to the assignee. It is more like the engine room of the deed of assignment. The operative part usually starts with testatum and it provides for other important clauses such as the consideration (price) of the property, the accepted receipt by the assignor, the description of the property, and the terms and conditions of the transaction.
• The testimonium : this shows that all the parties are involved in the execution of the deed.
• Execution : this means signing. The capacity of the parties (either individual, corporate bodies, illiterates) is of great essence in the mode of execution.  It is important to note that the type of parties involved determines how they will sign. Example 2 directors or a director/secretary will sign if a company is involved. In the same way, if an association, couple, individual, illiterate, family land (omonile), firm, unregistered association, etc. is involved the format of signature would be different.
• Attestation : this refers to the witnessing of the execution of the deed by witnesses.

For a Deed of Assignment to be effective, it must include a column for the Governor of the state or a representative of the Government where the property is, to sign/consent to the transaction. By virtue of Sec. 22 of the Land Use Act, and Sec. 10 Land Instrument Registration Law, the Governor must consent to the transaction.

Do you have any further questions? feel free to call Ibejulekkilawyer on 08034869295 or send a mail to [email protected] and we shall respond accordingly.

Disclaimer: The above is for information purposes only and should not be construed as legal advice. Ibejulekkilawyer.com (blog) shall not be liable to any person(s) for any damage or liability arising whatsoever following the reliance of the information contained herein. Consult us or your legal practitioner for legal advice.

Only 22% of poorest Nigerian households have electricity access –World Bank

Related Posts

Investing Strategy , Jargon, Legal, Terminology, Title

Table of Contents

• What Is an Assignment?
• What is an Assignment in Real Estate?
• What Does it Mean to Assign a Contract in Real Estate?
• How Does a Contract Assignment Work?
• Pros and Cons of Assigning Contracts

REtipster does not provide legal advice. The information in this article can be impacted by many unique variables. Always consult with a qualified legal professional before taking action.

An assignment or assignment of contract is a way to profit from a real estate transaction without becoming the owner of the property.

The assignment method is a standard tool in a real estate wholesaler’s kit and lowers the barrier to entry for a real estate investor because it does not require the wholesaler to use much (or any) of their own money to profit from a deal.

Contract assignment is a common wholesaling strategy where the seller and the wholesaler (acting as a middleman in this case) sign an agreement giving the wholesaler the sole right to buy a property at a specified price, within a certain period of time.

The wholesaler then finds another buyer and assigns the contract to him or her. The wholesaler isn’t selling the property to the end buyer because the wholesaler never takes title to the property during the process. The wholesaler is simply selling the contract, which gives the end buyer the right to buy the property in accordance with the original purchase agreement.

In doing this, the wholesaler can earn an assignment fee for putting the deal together.

Some states require a real estate wholesaler to be a licensed real estate agent, and the assignment strategy can’t be used for HUD homes and REOs.

The process for assigning a contract follows some common steps. In summary, it looks like this:

• Find the right property.
• Get a purchase agreement signed.
• Find an end buyer.
• Assign the contract.
• Close the transaction and collect your assignment fee.

We describe each step in the process below.

1. Find the Right Property

This is where the heavy lifting happens—investors use many different marketing tactics to find leads and identify properties that work with their investing strategy. Typically, for wholesaling to work, a wholesaler needs a motivated seller who wants to unload the property as soon as possible. That sense of urgency works to the wholesaler’s advantage in negotiating a price that will attract buyers and cover their assignment fee.

RELATED: What is “Driving for Dollars” and How Does It Work?

2. Get a Purchase Agreement Signed

Once a motivated seller has agreed to sell their property at a discounted price, they will sign a purchase agreement with the wholesaler. The purchase agreement needs to contain specific, clear language that allows the wholesaler (for example, you) to assign their rights in the agreement to a third party.

Note that most standard purchase agreements do not include this language by default. If you plan to assign this contract, make sure this language is included. You can consult an attorney to cover the correct verbiage in a way that the seller understands it.

RELATED: Wholesaling Made Simple! A Comprehensive Guide to Assigning Contracts

This can’t be stressed enough: It’s extremely important for a wholesaler to communicate with their seller about their intent to assign the contract. Many sellers are not familiar with the assignment process, so if the role of the buyer is going to change along the way, the seller needs to be aware of this on or before they sign the original purchase agreement.

3. Find an End Buyer

This is the other half of a wholesaler’s job—marketing to find buyers. Once they find an end buyer, the wholesaler can assign the contract to the new party and work with the original seller and the end buyer to schedule a closing date.

4. Assign the Contract

Assigning the contract works through a simple assignment agreement. This agreement allows the end buyer to step into the wholesaler’s shoes as the buyer in the original contract.

In other words, this document “replaces” the wholesaler with the new end buyer.

Most assignment contracts include language for a nonrefundable deposit from the end buyer, which protects the wholesaler if the buyer backs out. While you can download assignment contract templates online, most experts recommend having an attorney review your contracts. The assignment wording has to be precise and comply with applicable local laws to protect you from issues down the road.

5. Close the Transaction and Collect the Assignment Fee

Finally, you will receive your assignment fee (or wholesale fee) when the end buyer closes the deal.

The assignment fee is often the difference between the original purchase price (the price that the seller agreed with the wholesaler) and the end buyer’s purchase price (the price the wholesaler agreed with the end buyer), but it can also be a percentage of it or even a flat amount.

According to UpCounsel, most contract assignments are done for about $5,000, although depending on the property and the market, it could be higher or lower.

IMPORTANT: the end buyer will see precisely how much the assignment fee is. This is because they must sign two documents that show the original price and the assignment fee: the closing statement and the assignment agreement, respectively, to close the transaction.

In many cases, if the assignment fee is a reasonable amount relative to the purchase price, most buyers won’t take any issue with the wholesaler taking their fee—after all, the wholesaler made the deal happen, and it’s compensation for their efforts. However, if the assignment fee is too big (such as the wholesaler taking $20,000 from an original purchase price of $10,000, while the end buyer buys it for $50,000), it may ruffle some feathers and lead to uncomfortable questions.

In these instances where the wholesaler has a substantially higher profit margin, a wholesaler can instead do a double closing . In a double closing, the wholesaler closes two separate deals (one with the seller and another with the buyer) on the same day, but the seller and buyer cannot see the numbers and overall profit margin the wholesaler makes between the two transactions. This makes a double closing a much safer way to conclude a transaction.

Assigning contracts is a way to lower the barrier to entry for many new real estate investors; because they don’t need to put up their own money to buy a property or assume any risk in financing a deal.

The wholesaler isn’t part of the title chain, which streamlines the process and avoids the hassle of closing two times. Compared to the double-close strategy, assignment contracts require less paperwork and are usually less costly (because there is only one closing occurring, rather than two separate transactions).

On the downside, the wholesaler has to sell the property as-is, because they don’t own it at any point and they cannot make repairs or renovations to make the property look more attractive to a potential buyer. Financing may be much more difficult for the end buyer because many mortgage lenders won’t work with assigned contracts. Purchase Agreements also have expiration dates, which means the wholesaler has a limited window of time to find an end buyer and get the deal done.

Being successful with assignment contracts usually comes down to excellent marketing, networking, and communication between all parties involved. It’s all about developing strategies to find the right properties and having a solid network of investors you can assign them to quickly.

It’s also critical to be aware of any applicable laws in the jurisdiction where the wholesaler is working and holding any licenses required for these kinds of real estate transactions.

Related terms

Double closing, wholesaling (real estate wholesaling), transactional funding.

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The Ins and Outs of Land Contracts: What You Need to Know

May 3, 2023.

In this comprehensive guide to land contracts, you will learn about the definition, types and key elements of land contracts, as well as the legal requirements surrounding them. You’ll discover the benefits and limitations of using land contracts and how to draft and negotiate them effectively.

Additionally, this article delves into the consequences of defaulting on a land contract and how to handle disputes and resolutions. Lastly, we will explore the tax implications, reporting and record-keeping aspects related to land contracts.

Definition and Overview of Land Contracts

A land contract, also known as an installment land contract or a contract for deed, is a legal agreement between a buyer and a seller for the purchase of real estate property.

In this arrangement, the seller essentially finances the buyer’s purchase, and the buyer agrees to make regular payments, often monthly or quarterly, to the seller over a specific period, including interest. Once the payment terms are satisfied, the seller conveys the property’s legal title to the buyer.

Land contracts are commonly used when a buyer cannot secure traditional financing from a bank, or when the seller wants to expedite the sale, incentivize a buyer, or create a regular income stream.

Terminology and Concepts

Vendor and Vendee: In a land contract, the seller is called the vendor, while the buyer is called the vendee.

Legal Title and Equitable Title: One of the fundamental concepts in land contracts is the separation of the legal title and equitable title. The vendor retains the legal title to the property until the vendee pays the full purchase price, satisfying the terms of the land contract. The vendee acquires an equitable title, which grants them the right to use and possess the property.

Down Payment: A land contract typically requires the vendee to make a down payment which is a percentage of the total purchase price. This amount varies and is negotiable between the vendor and the vendee.

Interest Rate: The contract will specify an interest rate, which may be fixed or variable, for the vendee’s payments toward the purchase price of the property. Interest rates in land contracts are generally higher than those offered by traditional lenders, reflecting the increased risk for the vendor.

Balloon Payment: Some land contracts feature a balloon payment, which is a large, lump-sum payment due at the end of the contract term. This allows the vendee to make smaller, regular payments throughout the contract but requires them to secure alternative financing or make other arrangements to pay the remaining balance.

Forfeiture: In case the vendee defaults on their payments, the vendor has the right to terminate the contract and forfeit the vendee’s equitable title. In this case, the vendee loses any funds paid towards the property.

Benefits of Land Contracts

Flexibility: Land contracts are often more flexible than traditional mortgage agreements, allowing for customized payment terms and other arrangements that suit both the vendor and the vendee’s needs.

Availability: For buyers who have difficulty obtaining financing from traditional lenders due to factors such as a low credit score or self-employment, a land contract can provide an alternative pathway to homeownership.

Faster Closing: Land contracts can be processed more quickly than traditional mortgage loans, as they do not require lengthy mortgage application processes or approval from a financial institution.

No Prepayment Penalty: Many land contracts do not have penalties for early prepayment, allowing the vendee to pay off the balance of the contract without additional fees.

Limitations and Risks

Legal Risk: If the vendor defaults on their obligations or fails to convey the legal title after the vendee satisfies the terms of the land contract, the vendee may need to initiate legal action to protect their rights.

Financial Risk: If the vendee defaults on their payments, they risk losing their equitable title and any funds paid towards the property.

Higher Interest Rates: Interest rates in land contracts are often higher than those offered by traditional lenders, which could lead to higher overall costs for the vendee.

Balloon Payment: If the land contract contains a balloon payment, the vendee may face difficulty securing alternative financing or need to make other arrangements to pay the remaining balance.

Before entering into a land contract, both vendors and vendees should carefully assess the risks and consult with real estate professionals and legal advisors to protect their interests.

Types of Land Contracts

Land contracts, also known as land installment contracts, are a type of financing method for people who want to purchase a property without obtaining a traditional mortgage from a bank or other financial institution.

Land contracts allow the buyer to make monthly payments directly to the seller instead of a bank, with the seller essentially acting as the lender.

There are various types of land contracts, each suited for different types of property transactions. We will discuss four major types of land contracts: installment contracts, lease purchase contracts, option contracts, and contracts for deeds.

Installment Contracts

Installment contracts, also known as installment sales, are a common type of land contract. They involve a buyer and a seller agreeing on a purchase price for a property, with payment terms typically spread out over a set period. The buyer makes installment payments to the seller according to the agreed-upon terms, and upon successful completion of all payments, ownership of the property is transferred from the seller to the buyer.

Installment contracts are particularly useful for buyers who do not have enough money saved for a significant down payment or have difficulty obtaining a mortgage loan. These contracts afford the buyer time to make monthly payments, typically including interest, toward the purchase price of the property.

Essentially, they act as a form of “ rent -to-own” arrangement, with the buyer gradually building equity in the property as they make their payments.

Lease Purchase Contracts

Lease purchase contracts, also known as lease-to-own agreements or rent-to-own contracts, are similar to installment contracts in that they allow a buyer to make regular payments toward the purchase of a property. However, instead of making installment payments on the purchase price, the buyer pays rent to the seller for the property, with a portion of the rent applied toward the purchase price.

Typically, a lease purchase contract includes an option for the buyer to purchase the property at a specified price after a certain period, during which the buyer has been making rental payments. If the buyer exercises this option at the end of the lease term, the applied rental credits can be used as part or all of the down payment for the purchase.

Lease purchase contracts can be beneficial for individuals who want to “test out” living in a property before committing to purchasing it or need time to improve their financial situation to qualify for a mortgage.

Option Contracts

Option contracts grant the buyer the exclusive right to purchase a property at a specific price within a specified period, without obligating the buyer to complete the purchase. In exchange for this exclusive right, the buyer usually pays the seller a non-refundable option fee, which may be applied toward the purchase price if the buyer decides to exercise the option.

Option contracts can provide flexibility for buyers, as they allow them to secure the right to purchase a property while they decide whether they want to buy it, secure financing, or identify a suitable time to complete the transaction. If the buyer does not exercise the option to purchase within the specified time frame, the seller retains the option fee and can pursue other buyers or keep the property.

Contract for Deed

A contract for deed, also known as a land contract or an agreement for deed, is an arrangement where the buyer and seller agree upon the purchase price, down payment, interest rate, and other terms, and the buyer makes monthly payments directly to the seller for a certain period. However, unlike a traditional installment contract, the seller retains legal title to the property until the final payment is made.

In a contract for deed, the seller acts as the lender, providing financing for the buyer. Once the buyer has completed all payments according to the contract terms, the seller will transfer the property title to the buyer.

This kind of contract can be beneficial for buyers who do not qualify for a traditional mortgage, as well as for sellers who may struggle to sell their property on the open market.

Overall, land contracts can offer significant flexibility for both buyers and sellers, allowing property transactions to occur even when traditional financing methods may be unavailable.

Each type of land contract has its own unique advantages and considerations, making it essential for both parties to conduct thorough research and consult with legal and financial professionals before entering into a contract.

Key Elements of a Land Contract

A land contract, also known as a contract for deed or installment sale agreement, is a method of financing the sale of real property between a buyer and seller. It allows the buyer to make a series of payments to the seller while living on and using the property. Once the agreed-upon price is paid in full, the seller then transfers the title to the buyer.

The following are the key elements of a land contract that parties should include when drafting the agreement.

Property Information

One of the essential elements of a land contract is a detailed description of the property being sold. This generally includes the property’s address, legal description, and tax identification number.

The legal description is crucial for clearly identifying the property being conveyed and can be obtained from a title or abstract report, county records, or a survey.

In addition to the legal description, it is essential to disclose any easements, restrictions, or encumbrances on the property, as this may impact the buyer’s intended use of the land.

Seller and Buyer Information

A land contract must identify the parties involved in the transaction – the seller(s) and buyer(s). Typically, this information includes the full names of the parties and their respective addresses.

If the buyer or seller is a corporation or limited liability company, the contract should include the entity’s name and state of formation.

If there are co-buyers, it is essential to define their ownership interests – for example, as joint tenants or tenants in common.

Purchase Price and Terms

A vital aspect of a land contract is the agreed-upon purchase price for the property. This should be explicitly stated in the contract, along with other cost-related terms such as the:

• Required initial down payment (if any)
• Amount of each installment payment
• Number of installment payments
• Final balloon payment (if applicable)

These terms should clarify the total purchase price and provide a clear understanding of the payment structure for both parties.

Payment Schedule for Land Contracts

The land contract should include a payment schedule that outlines when each installment payment is due. Payments are commonly made on a monthly basis but can also be set for other intervals, such as quarterly or semi-annually, depending on the agreement between the parties.

It is also essential to state the grace period allowed for late payments and any late fees that apply if a payment is not made within that timeframe.

Interest Rate and Calculations

The contract should specify the interest rate and any terms related to interest accrual or adjustments. It is crucial to clearly state whether the interest rate is fixed or variable and, if variable, how and when it can be adjusted. Moreover, the contract should outline how the interest portion of each payment will be calculated.

Prepayment Penalty

Some land contracts contain prepayment penalties, which are fees charged to the buyer if they pay off their obligation pursuant to the land contract ahead of schedule. If a prepayment penalty is included, the contract should clearly state the fee amount and any conditions under which it applies.

Due on Sale Clause

A due-on-sale clause is a provision within the land contract that requires the buyer to pay off any remaining balance in the event of the property’s sale or transfer to a third party.

This clause protects the seller’s interests by ensuring they receive payment in full upon the property’s disposition.

Establishing an Escrow Account

Lastly, a land contract may require the establishment of an escrow account to hold funds for property tax and insurance payments.

If this is the case, the contract should outline who (buyer or seller) is responsible for maintaining the escrow account, the amounts required to be deposited into the account, the schedule for depositing funds, and any requirements for reporting or maintaining account balances.

Understanding Legal Requirements

When starting or running a business , it is essential to understand the various legal requirements that apply to your company. These legal obligations can include federal laws, state laws, and county or local ordinances. Adhering to these standards is crucial for the successful and lawful operation of your business, as failure to comply can result in penalties and other repercussions.

Adhering to Federal Laws

Federal laws apply across the entire United States and cover areas such as labor, taxation, workplace safety, and environmental regulations. Here are some essential federal laws to be aware of when operating a business:

Tax Law: The Internal Revenue Service (IRS) enforces US tax laws for both individuals and businesses. Companies are required to pay federal income taxes and obtain an Employer Identification Number (EIN). Depending on the type of business, you may also need to collect sales tax and pay employment taxes such as Social Security, Medicare, and unemployment taxes. Tax requirements and deadlines vary, so it is essential to understand your tax obligations as a business owner.

Labor Law: Federal labor law covers various aspects of worker’s rights, including minimum wage, overtime pay, and child labor protections. Two major federal labor laws include the Fair Labor Standards Act (FLSA) and the Family and Medical Leave Act (FMLA). Employers must be aware of these laws to ensure they are treating their employees fairly and lawfully.

Workplace Safety and Health Regulations: The Occupational Safety and Health Administration (OSHA) enforces federal laws to ensure a safe and healthy work environment for employees. OSHA sets and enforces standards for workplace safety, including training and recordkeeping requirements. Employers must be aware of and comply with these standards to avoid penalties and maintain a safe work environment for their employees.

Environmental Regulations: The Environmental Protection Agency (EPA) enforces federal environmental regulations. These laws oversee pollution control, hazardous waste disposal, and other environmental concerns that businesses may need to address. Companies must be aware of their environmental obligations to prevent fines and ensure compliance with federal guidelines.

Complying With State Laws

In addition to federal laws, businesses must also comply with state laws. These vary by state and can include additional labor laws, tax requirements, zoning regulations, and licensing requirements. Some key areas of state law to consider when operating a business include:

State Tax Law: In addition to federal taxes, companies generally need to pay state income and sales taxes. States may also impose additional taxes, such as property taxes, franchise taxes, or business licensing fees.

Employment Laws: State labor laws can include provisions for minimum wage, overtime pay, and paid time off, which may differ from federal standards. Employers must adhere to both federal and state labor laws to ensure compliance.

Business Registration, Licensing, and Permits: State requirements for registering a business, obtaining licenses, and securing permits can vary. Businesses must research and fulfill these state obligations to operate legally within their jurisdiction.

County and Local Ordinances

Finally, businesses must comply with county and local ordinances, which can include zoning regulations, noise ordinances, and building codes. These requirements may vary depending on the location of your business and the type of commercial activities you engage in.

Some local ordinances to consider include:

Zoning Regulations: Local zoning laws dictate where businesses can operate, the type of business activities permitted, and various requirements related to land use and development. It’s essential to understand and adhere to local zoning regulations when selecting a business location and planning any construction or expansion projects.

Building Codes: Local building codes ensure that businesses adhere to structural and safety standards in the construction and maintenance of commercial spaces. These codes may include specific requirements for accessibility, fire safety, and other health and safety considerations.

Licensing and Permits: Local governments may also require business licenses and permits, such as a health department permit for restaurants or a sign permit for storefronts. Be sure to research and obtain any necessary permits to operate legally within your jurisdiction.

By understanding and adhering to federal, state, and local legal requirements, you can minimize risks and ensure that your business operates legally and smoothly.

Drafting and Negotiating Land Contracts

A land contract, also known as a contract for deed or installment sale contract, is a legally binding agreement between a seller and a buyer for the purchase of real estate property. Entering into a land contract can be an attractive option for buyers who may be unable to obtain traditional financing or for sellers who are interested in a more flexible and direct financing option.

To ensure that the land contract is fair and legally enforceable, it is important to engage in proper drafting and negotiation processes including legal representation, due diligence, negotiation, and key contractual provisions.

Getting Legal Representation

Engaging the services of a skilled real estate attorney is crucial for both buyers and sellers in land contract transactions. Real estate attorneys can provide guidance and advice throughout the entire process, from drafting to negotiating and enforcing the land contract. They will ensure that the agreements are in accordance with local and state laws, as well as protect their clients’ interests.

Legal representation can also assist in resolving any disputes that may emerge between the parties during or after the negotiation process. Moreover, a knowledgeable attorney will be able to identify and deal with potential red flags, as well as address any complications that may arise during the closing process.

Conducting Due Diligence

Conducting due diligence is an essential part of the land contract process for both the buyer and seller. It refers to the investigation and research that buyers and sellers must undertake before entering into a legally binding agreement.

For the buyer, due diligence includes researching the property’s market value and condition. They should investigate the land’s title to ensure that there are no liens or encumbrances that could impact their ownership rights.

Buyers should also review zoning and land-use regulations, as well as obtain any necessary permits or approvals required for future development.

On the other hand, sellers must conduct due diligence by researching the buyer’s ability to make the required payments. They may want to conduct background checks, verify employment, and review the buyer’s financial statements and credit history to ensure their financial stability.

Negotiating the Land Contract

Negotiating a land contract is a critical step in ensuring that both parties are satisfied with the terms and conditions of the agreement. An experienced real estate attorney can aid in this process by assisting with negotiations, offering guidance on various aspects of the contract, and helping to facilitate communication between the parties.

Considerations during negotiation may include the purchase price, the down payment, monthly payment amounts and terms, the length of the contract, and the responsibility for taxes, insurance, and maintenance.

It is important for both parties to have a clear understanding of their respective rights, responsibilities, and obligations under the land contract.

Contractual Provisions in Land Contracts

A well-crafted land contract will include essential provisions that protect both the buyer’s and the seller’s interests. Some specific clauses that may need to be addressed in a land contract are:

Description of the property: This includes the legal description of the property, as well as any improvements, fixtures or appurtenances.

Purchase price and payment terms: The agreed-upon purchase price should be clearly outlined, along with the payment structure, interest rates, and balloon payment clauses if applicable.

Responsibilities for property taxes and insurance: The contract should specify who is responsible for payment of property taxes, insurance premiums, and any routine maintenance.

Default provisions: The contract should include measures to address default situations, such as the buyer’s failure to make timely payments or the seller’s failure to maintain clear title to the property.

Right to cure default: The parties should have the right to cure their default by paying outstanding obligations or addressing the underlying issue within a specified timeframe.

Transfer of title: The contract should delineate the conditions under which the title will be transferred to the buyer, such as payment of the full purchase price or meeting other contractual requirements.

In summary, drafting and negotiating a land contract requires careful planning, attention to detail, and professional assistance to ensure that the rights and interests of both parties are protected.

By engaging the services of an experienced real estate attorney and conducting thorough due diligence, buyers and sellers can increase the likelihood of a successful and equitable land contract transaction.

Default and Remedies

Default refers to the failure of a borrower to meet their financial obligations on time, either by not paying back a loan or failing to comply with other conditions specified in a loan agreement. When default occurs, there are various remedies that can be pursued by the lender. Let’s discuss several consequences of default as well as possible remedies for each scenario.

Consequences of Defaulting on a Loan

When a borrower defaults on their loan, the lender may take action to enforce the terms of the contract and protect their interests. Some common consequences of default may include:

Damage to the borrower’s credit score: Default can have a significant negative impact on the borrower’s credit rating, making it more difficult to obtain credit in the future.

Collection efforts: The lender may engage in collection efforts, using legal means (such as lawsuits) or hiring collection agencies to collect the debt from the borrower.

Acceleration: The lender may declare the entire outstanding balance of the loan due immediately, rather than waiting for scheduled payments.

Loss of collateral: If the loan is secured by collateral, the lender may take possession of the collateral property to recover the outstanding debt.

Additional fees and charges: Late fees, interest charges, and other fees may accumulate over time, increasing the borrower’s overall debt.

Forfeiture of Possession

Forfeiture is one of the remedies available to a lender when a borrower defaults on their secured loan. Under forfeiture, the lender takes possession of the property used as collateral for the loan. This often occurs when the borrower is unable to make the required payments on the loan, whether due to financial hardship or other reasons.

Once the lender takes possession of the collateral, they may sell the property to recoup the outstanding debt. The borrower may have the right to redeem the property before the sale, by paying off the outstanding debt and any fees. However, if the property is sold, and the proceeds do not cover the entire outstanding debt, the borrower may still be liable for the remaining balance.

Foreclosure of Property

Foreclosure is another remedy available to lenders when a borrower defaults on a mortgage loan. In a foreclosure, the lender legally takes ownership of the property used as collateral for the loan.

This process typically involves a court-supervised sale of the property, with proceeds from the sale being used to repay the debt.

The lender may either foreclose judicially or nonjudicially, depending on the state’s laws and the terms of the loan agreement. Judicial foreclosure involves a court proceeding, while nonjudicial foreclosure relies on a private trustee sale without court involvement.

Once the foreclosure process is complete, the borrower loses all rights to the property. In some cases, the borrower may also be liable for a deficiency judgment if the sale proceeds do not cover the entire outstanding debt.

Reinstatement of the Loan

Reinstatement is a remedy available to borrowers who have defaulted on their loans and wish to bring the loan current. Under reinstatement, the borrower pays the outstanding missed payments, fees, and interest charges in a lump sum to the lender. This action effectively “cures” the default and allows the borrower to resume their regular loan payments.

Typically, there is a limited timeframe during which the borrower can reinstate their loan, sometimes referred to as a “right to cure” or “right to reinstate” period. This period is often provided by state law or specified in the loan agreement.

It is important for borrowers to be aware of this timeframe, as once the reinstatement period expires, the lender may proceed with other remedies, such as foreclosure.

In conclusion, default on a loan has significant consequences for both the borrower and the lender. Various remedies, such as forfeiture, foreclosure, and reinstatement, can be pursued to address these consequences.

Borrowers should strive to meet their financial obligations to avoid default, and lenders should work with borrowers to resolve issues before pursuing these remedies.

Transfer and Assignment of Land Contracts

Land contracts, also known as installment sale contracts, land installment contracts, or contracts for deed, are agreements between a seller and buyer for the purchase of real property. The seller holds the legal title to the property, while the buyer makes regular payments to the seller over time, similar to a mortgage, until the purchase price is paid in full. Upon completion of the payments, the seller transfers the legal title to the buyer.

Land contracts are commonly used for real estate transactions, especially in situations where traditional bank mortgages may not be available or desirable.

There are situations where one or both of the parties involved in a land contract may wish to transfer or assign their rights and obligations to another party. Below, we will discuss selling land contracts, partial sales and assignments, and the associated risks and benefits of transfers.

Selling a Land Contract

Selling a land contract involves the transfer of the legal title to the property, along with the remaining payment obligations from the current seller (the original owner of the property) to a new buyer. The transfer typically requires the consent of the current buyer (the person making installment payments) and may be subject to specific terms and conditions set forth in the original land contract (such as a right of first refusal).

To sell a land contract, the parties should review the original land contract terms and seek professional advice to ensure compliance with all applicable legal and tax requirements. A written assignment or transfer agreement is usually required, detailing the rights and obligations of each party, including the payment schedule, interest rate, and other associated terms.

The transfer agreement is often recorded at the local county recorder’s office, to provide public notice of the change in ownership of the land contract.

Partial Sales and Assignments of Land Contracts

In some cases, a land contract holder (the seller/original owner) may want to assign or sell only a portion of their rights and obligations under the contract. This could involve selling a specific portion of the remaining payments owed, or assigning only a percentage of the future payments to another investor.

Partial sales and assignments are more complex than complete transfers, and careful consideration should be given to the legal and tax implications. The rights and obligations assigned or sold should be outlined in detail, and the remaining rights should be addressed in both the original land contract and the assignment or transfer agreement.

If the current buyer is cooperative, partial sales or assignments can provide a valuable source of cash for the seller, potentially enabling them to invest in other real estate or business opportunities.

It is important to work with experienced professionals familiar with land contracts, tax laws, and title issues in order to properly structure and document the transaction.

Risks and Benefits of Transferring Land Contracts

Transferring or assigning a land contract comes with various risks and benefits for all parties involved.

For the original land contract seller, the benefits often include receiving a lump sum payment for the value of the land contract or sharing the risk and reward of the future payments with a new investor. The current buyer, on the other hand, does not see a direct financial benefit from the transfer but may gain a more stable and professional counterpart to work with, especially if the original seller was an individual with limited resources.

The primary risk for the original seller is the potential loss of control over the property and the future receipt of payments. If the new buyer or investor fails to fulfill their obligations, enforcing the terms of the contract may require legal remedies, which can be costly and time-consuming.

For the new buyer or investor, the risks include the potential default of the current buyer on their payment obligations, as well as any unforeseen issues with the property, such as title defects, zoning restrictions, or environmental liabilities.

Thorough due diligence, including a review of the payment history, creditworthiness of the current buyer, and research on the property itself, can help to mitigate these risks.

In conclusion, transferring or assigning a land contract is a complex transaction that involves various risks and benefits for all parties involved. Proper structuring, documentation, and due diligence are crucial to ensure a successful outcome.

It is always advisable to work with experienced professionals familiar with land contracts, tax laws, and title issues when considering transferring or assigning a land contract.

Land Contract Disputes and Resolutions

Land contract disputes are common and can arise for various reasons. These disputes typically involve matters such as purchase and sale agreements, property boundaries, easements, and adverse possession claims.

Resolving land contract disputes is essential for both parties to protect their rights and prevent potential financial and legal consequences. Dispute resolution methods, such as mediation, arbitration, and litigation, are available to handle the complexities of land contract disputes.

Let’s examine common disputes, mediation and arbitration, and litigation as dispute resolution methods.

Common Land Contract Disputes

There are several types of land contract disputes that parties may encounter:

Contract interpretation: Conflicting interpretations of the terms and conditions of the land contract may lead to disputes between the parties. This typically involves disagreements over the meaning of specific clauses, provisions, or ambiguous language within the contract.

Property boundary disputes: Boundary disputes arise when the exact location of property lines is unclear or contested. This may occur due to outdated or inaccurate surveys, conflicting legal descriptions, or encroachments by neighboring property owners.

Easement disputes: An easement is a legal right to use another person’s property for a specific purpose. Disputes may arise if there are conflicting understandings of the easement’s scope and its permitted uses, or if one party claims a prescriptive easement (an easement obtained through continuous, open, and notorious use of another’s property without the owner’s permission).

Title disputes: These disputes involve ownership claims and issues with the chain of title (the historical sequence of legal transfers of the property). Inadequate or fraudulent title searches, forgery, and undiscovered liens can lead to title disputes.

Adverse possession claims: When an individual occupies and treats another person’s property as their own for a specific statutory period without the legal owner’s permission, adverse possession disputes emerge. In some cases, the occupier may gain legal ownership of the property, depending on the jurisdiction’s laws.

Mediation and Arbitration for Dispute Resolution

Mediation and arbitration are alternative dispute resolution methods that parties may use to resolve land contract disputes without resorting to litigation. Both methods can be more affordable, efficient, and flexible alternatives to court proceedings.

Mediation: In mediation, a neutral third party (the mediator) assists the disputing parties in negotiating a settlement. The mediator helps facilitate communication, identify common interests, and propose solutions. However, the mediator cannot impose a binding agreement on the parties. Instead, the parties must voluntarily consent to any proposed settlement.

Arbitration: Arbitration is a more formal process than mediation but still less formal than litigation. The parties agree to submit their dispute to an impartial arbitrator or panel of arbitrators. The arbitrator examines the evidence presented, applies the relevant law, and issues a binding award or judgment. Arbitration decisions are typically final, with limited grounds for appeal.

Litigation as a Means of Dispute Resolution

If alternative dispute resolution methods fail, litigation may be the last resort for resolving land contract disputes. In some cases, the parties may also choose to initiate litigation from the outset if they believe it is the best approach for their specific situation.

Court proceedings: The parties involved in a land contract dispute will present their respective cases to a judge or jury in a court of appropriate jurisdiction. The court will consider the evidence submitted, hear arguments, and apply relevant laws to make a binding decision.

Appeals: If a party disagrees with the court’s judgment, they may appeal the decision to an appellate court.Appellate courts review decisions made by lower courts for any legal errors, such as misinterpretation of the law or procedural mistakes. However, the appellate courts typically will not re-evaluate the facts of the case or overturn the lower court’s decision based on mere disagreement with the outcome.

Resolving land contract disputes can be a complicated and arduous process. The parties involved should consider consult legal professionals to guide them through the various options available and determine the most suitable dispute resolution method for their specific situation.

Taxes and Recordkeeping

Tax compliance and recordkeeping are essential responsibilities for individuals, households, and business entities. A failure to maintain accurate financial records or adhere to tax obligations can lead to a host of legal and financial consequences.

Let’s explore the various tax implications, income tax reporting, property tax responsibilities, and the need for keeping accurate records.

Various Tax Implications of Recordkeeping

There are several types of taxes imposed on individuals and business entities at various levels, including federal, state, and local taxes. Depending on the individual’s circumstances or the nature of the business, one may be subject to income tax, property tax, sales tax, payroll tax, and many others.

Income tax is a percentage levied on income earned by individuals and businesses. It is the primary source of revenue for the federal government and is used to fund public services and infrastructure. Income tax rates vary according to income levels, filing status, and other factors.

Property tax is assessed on real property, such as land, buildings, and other fixed assets. It is usually administered at the local level, with rates varying by jurisdiction. Property tax helps fund local services, such as public schools, law enforcement, and emergency services.

Sales tax is imposed on sales of goods and some services. It is collected by retailers and remitted to the state or local government. Some jurisdictions also impose use tax on goods purchased from out-of-state retailers.

Payroll tax is a tax on wages, salaries, and other forms of compensation paid to employees. It is generally split between employers and employees and is used to fund social insurance programs, such as Social Security and Medicare.

Income Tax Reporting

Income tax reporting is the process of preparing and filing an annual tax return, which details an individual’s or business’s income, deductions, credits, and tax liability. In the United States, the Internal Revenue Service (IRS) is the primary agency tasked with administering income tax.

There are different filing requirements and tax forms for individuals, businesses, and other entities like estates and trusts. For most individuals, the deadline for filing an annual income tax return is April 15.

When filing their tax returns, taxpayers must report all taxable income, including wages, salaries, interest, dividends, and capital gains. Taxpayers can also claim deductions and credits to reduce their taxable income and overall tax burden.

Deductions may include mortgage interest, state and local taxes, charitable contributions, and unreimbursed business expenses. Credits directly reduce the amount of tax owed and may include the Child Tax Credit, Earned Income Tax Credit, and education-related tax credits.

Property Tax Responsibilities of Property Owners

Property tax is imposed by local governments and paid by property owners. Taxing jurisdictions, such as cities, counties, and school districts, determine the tax rates and assessed property values. Tax rates can vary widely by jurisdiction, and assessments are typically based on a percentage of the property’s market value.

Property owners must pay property tax on a recurring basis, typically annually or semi-annually. Failure to pay property taxes can result in penalties, interest, and ultimately the loss of the property through tax foreclosure or tax lien sales.

It is essential to stay informed about local property tax laws and the assessment and appeal process. If a property owner believes that their property has been over-assessed or incorrectly classified, they may have the right to appeal the valuation, which can result in a reduction in taxes.

Keeping Accurate Records and Documentation

Accurate recordkeeping is critical to comply with tax laws and minimize the risk of audits, financial penalties, and legal issues. Taxpayers should maintain records of all income, expenses, deductions, and credits, as well as any supporting documentation, such as receipts, invoices, canceled checks, and bank statements.

For businesses, maintaining proper financial records includes tracking income and expenses, recording transactions, and retaining supporting documentation. It also involves maintaining and storing accurate employee records, payroll, and benefits information.

Keeping accurate records can help taxpayers and businesses comply with tax laws, prepare financial statements, monitor their financial progress, and manage cash flow. It can also help in preparing and filing accurate tax returns, substantiating claims for deductions and credits, and resolving disputes with tax authorities.

In summary, understanding the different types of taxes, complying with income tax reporting requirements, fulfilling property tax responsibilities, and maintaining accurate financial records are crucial for individuals and businesses alike.

Proper tax compliance and recordkeeping are necessary to avoid legal and financial problems and ensure a smooth and successful tax filing process.

Land Contracts FAQs

What is a land contract and how does it work.

A land contract, also known as a contract for deed or installment sale agreement, is a financing method used for purchasing real estate. The seller finances the sale and retains legal title, while the buyer takes possession and makes payments. Transfer of the title occurs after the buyer pays the agreed-upon amount (Molinsky, 2014).

Are land contracts a good alternative to traditional mortgages?

Land contracts can be a viable alternative for buyers who cannot secure a traditional mortgage. It allows them to purchase property without involving a bank or other lending institution. However, the buyer should carefully review the terms and ensure they can make the required payments before entering into the agreement (MacLaurin, 2016).

What are the risks and benefits of a land contract for buyers?

Benefits for buyers include easier qualification, potentially lower closing costs, and fewer origination fees. Risks involve the possibility of default, resulting in loss of investment and property, and the seller not holding a clear title or failing to make mortgage payments themselves (MacLaurin, 2016).

What are the risks and benefits of a land contract for sellers?

Benefits for sellers include a potentially faster sale, retaining the title as collateral, and earning interest on the loan balance. Risks involve the need to repossess the property in case of buyer default, which may involve legal action, and a lack of immediate lump-sum payment (Molinsky, 2014).

Can a land contract be refinanced or modified?

Yes, a land contract can be refinanced or modified through mutual agreement between the buyer and seller. In many cases, a buyer may seek to refinance through a traditional bank loan, allowing them to obtain the title and pay off the remaining balance with the seller directly (Federman, 2012).

What happens if the buyer defaults on a land contract?

If the buyer defaults on a land contract, the seller may repossess the property, usually through a process called forfeiture. Depending on the terms of the contract and state laws, the buyer may lose all rights to the property and any equity built up during the contract term (Molinsky, 2014).

References: Federman, M. (2012). Seller-financing restrictions under Dodd-Frank. Probate & Property, 26(1), 1–3. MacLaurin, J. A. (2016). Installment land contracts: The pitfalls for homeowners. Probate & Property, 30(4), 1–4. Molinsky, A. (2014). Homeownership in the United States: A primer on government-supported single-family mortgage finance. Probate & Property, 28(6), 1–5.

About the Author

Carlos Reyes

As a native Washingtonian, Carlos Reyes’ journey in the real estate industry began more than 15 years ago when he started an online real estate company. Since then, he’s helped more than 700 individuals and families as a real estate broker achieve their real estate goals across Virginia, Maryland and Washington, DC. Carlos now helps real estate agents grow their business by teaching business fundamentals, execution, and leadership.

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What is a Deed of Assignment and the Foolish Risk your taking for not having a Deed of Assignment for your Land

By omonilelawyer | july 15, 2017 | 43,181 | 39.

A deed of Assignment is one of the most important documents YOU MUST HAVE when you conclude a Land Transaction. In fact it baffles me that 6 out of 10 people I know who have bought lands in the past have no deed of assignment . They are always the first to complain that Omonile has defrauded them but they have no proof to show the property has been sold to them other than a receipt.

It’s funny that everyone has the title documents to their car showing who the seller was and how it was transferred from the Seller of that car to you the new owner but when it comes to landed properties which are 10 times more valuable than cars, we fail to ask for this one simple important document that can prove ownership of that land. What then is this all important deed of Assignment I am alluding to? This can be found from the following definitions below:

A deed of Assignment is an Agreement between the Seller of a Land or Property and a Buyer of that Land or property showing evidence that the Seller has transferred all his rights, his title, his interest and ownership of that land to that the Seller that has just bought land.

The Deed of Assignment acts a main document between the buyer and seller to show proof of ownership in favour of the seller . The person or Seller who transfers his rights or interests in that property is usually called the Assignor and the person who receives such right or interest from the Seller is called the Assignee.

A Deed of Assignment therefore is an Agreement where an assignor states his promise that from the date of the assignment or any date stipulated therein, the assignor assigns his ownership in that Land to the assignee. The deed contains very pertinent information for a real estate transaction. For one, it spells out the date when the ownership of the property transfers from one owner to the other. The deed also gives a specific description of the property that is included in the transfer of ownership.

Signing a Deed of Assignment and having that Deed is your number 1 evidence against another person that is trying to claim ownership of that same land too. If you have a land and no deed yet, i feel sorry for you! Better consult your Lawyer to go draft one for you now to save yourself future problems

In most situations, when the Deed of Assignment has been exchanged between both parties, it has to be recorded in the land registry to show legal proof that the land has exchanged hands and the public should be aware of the transaction. Such recorded Deed of Assignment come in the form of either a Governor’s consent or registered conveyance.

The Deed of Assignment spells out the key issues in the transaction between the Seller and the Buyer so that there won’t be any confusion or assumption after the property has been transferred to the new owner . Such Key issues include:

1. The Parties’ to the Agreement e.g between Mr A and Mrs K

2. The addresses of both parties and how it is binding on their successors, friends, colleagues and those representing them in any capacity.

3. The history of the land in question how it was first obtained down to the moment its about to be sold including and documents it previously had till this date

4. The agreed cost of the land and the willingness of the Seller to finally accept that price paid for the land

5. The description and size of the land to be transferred.

6. The covenants or promises both parties choose to undertake to perfect the transfer of the document

7. The signature of the parties to the Assignment and Witnesses to the Transaction

8. Finally the section for the Commissioner of Oaths or Governors Consent to sign and validate the agreement.

These are the important features of a Deed of Assignment and must be included in all Documents for it to be valid. Don’t listen to any Omonile who tells you he doesn’t or the family doesn’t sign a deed of assignment and that it is only a receipt you need. He is only looking for a way to resell your land to another person and to use receipt as a ploy to prevent you from establishing true ownership of your land.

Always consult a property lawyer before you buy a land to help prepare a deed of assignment. It will be your greatest mistake if you don’t have one. Below is a sample deed of assignment and how it looks so that you don’t fall victim of land swindlers

SAMPLE DEED OF ASSIGNMENT

The Cover of the Deed of Assignment must show the parties to the transaction and the description of the land sold

The first page of the Deed of Assignment must contain the parties to the transaction and the brief history of how the land became the Sellers property

The third page must contain the description of the land to be sold, the surveyor that did it, the cost of the land, the acceptance of the cost of the land and the promises both parties will make to themselves to abide with after the deal has been sealed.

The last page must show the signatures of the parties and the witnesses to that transaction and finally below , the section for the commissioner of oaths to endorse or the Governor to assent his consent to this transaction

Always consult a property lawyer before entering a legal contract.

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39 comments.

owolabi animashaun

how much is it to obtain governor consent of 3plots of land at okegbegun phase 2.,winner church along laspotech road ikorodu? or if there is C OF O Availiable? thanks

Barr. Matthew Ottah

I need the square meters of the survey plan so that I can fathom out N estimate of what it would cost. Cheers

I have a parcel of Land i had alredy built a 3-Bedroom Bungalow on at Magada behind MFM Prayer City. I only have a Signed Agreement from the One I bought it from. I have paid to the Omonile but yet to get a receipt from them. I have not done a survey yet. Kindly advice.

babatunde Ogunnowo

good morning. what is the difference bewteen a deed of sublease and a deed of assignment? which is preferable 2. what are the cost implications for processing any tyeo of deed. thanks. keep up the good work

Sir, I have plot at ogun state and for the deed of assignment, the land owners said I will pay 100K for them to get it done that there are four signatories to it. The issue now is that the said amount is too much. Pls I need your input on this. Thank You

Matthew Ottah

You need to negotiate with them to reduce the price

Please Mr Ottah can you send your number so I can call to ask for help?

My numbers are everywhere on the site. Cheers

sir,this deed…who is resposible to issusing it,i.e is it part of the document the omonile will give you when you have paid for the land or the buyer contracts a lawyer to draw it up after payment and takes to family(olori ebi) to sign their portions.

Your very correct sir. Both options are the right way to go about it.

how do you know a false land

I wanted to buy a land from one of this estate, I was told the estate has a Global C of O from Ogun state government and that upon payment I will be issued a Deed of Assignment. There after I can do the survey. My questions are: 1. I was told since the Estate has Global C of O, I might not necessarily need individual C of O. 2. What other documents do I need to process apart from the survey. You sincere advice will be appreciated. Thanks

sir, thank you very much sir for your advise, all what u said above is true even i presently find myself in dat situation, i bought just half plot of land from a family representative at abeokuta in which i only collected receipt from them without the deed of assigmnet and i started work on the land, im even through with the foundation about to start the main building. Sir, i will be very glad and happy if you can put me through on what are d next steps to take, though i have printed out all the deed of assignment you pasted up for me to rewrite and give them to sign.

Thanks you very much sir

Hi, I bought a land from a relative of which the land have a c of o under my Anty family name, my question is; 1. Do I have to do personal c of o on my name. 2. is’t secure under my Anty family name. I need an advice, and I will be looking forward to hear back from you because I don’t know what to do before is too late…thanks!

Good evening barrister, Pls must I first so a survey before I do a deed. We Purchased a land and we have just a receipt. Thank you

please is it legal for a non lawyer to prepare a deed of assignment? Thanks.

Please explain to me the difference between Deed of Assignment and Deed of Agreement. I am getting different interpretation and it is confusing. When I buy a family land, which one should I prepare for the family to sign?

They are the same thing sir and perform the same function.

Could you please tell me the importance of that red seal in a deed? What is its significance? How important is it? Thanks

Its of no serious importance in modern day execution of documents. As long as the parties have signed or attested to the documents with their signatures or personal thumbprint, the document is as good as been executed properly. People who use it are mostly Customary Land Families to show how important their signatures are

Giulia Devey

I have a deed of assignment which is signed but the property has an outstanding mortgage on the property. I have been paying this, however it fell into arrears and now the assignor is claiming against me for receiving adverse credit. This person did not take their name off the mortgage therefore would I be liable for her claim in court?

Yes you would because you have chosen to continue paying the outstanding mortgage. Your lawyer should have advised you on the perils of continuing the mortgage payment in your name

Pls. must a land have C of O before Governor conscent can be acquired if purchased from the owner? What happen when the land doesnot have C of O? can the buyer seek to get C of O in place of Governors conscent

Please can a commissioner for oath of Lagos State endorse the dead while the land is situated in ogun state

Can a deed of assignment be prepared for land that does not have C of O yet but which Allocation paper or R of O is ready?

name withheld

my friend bought a property an does not know how much to pay his attorney, the attorney are asking for 500k 180, and claimed they have to bribe some people to get them to follow the deed of assignment , is it a fraud of are the lawyers just trying to be a fraudulent?? thanks and have a good day

Good day Sir, I found this site and info therein helpful. Is it possible for a the seller to issue a 2 Deed of assignment to different person on the sme land.

What is the functional different between C of O and deed of assignment

Two people bought a plot of land. The seller bought it from another person. What documents must the new buyers get? Must each survey his own portion before the agreement?

omonile lawyer, pls i have power of attorney and deed of partition for a piece of land in abuja (4 of us bought and shared the land), do i still need deed of assignment?

Sir, I want you to send a soft copy of deed of assignment to my email. How much would it cost? [email protected]

Good day sir. I bought a plot of land, have a signed deed of assignment. But resently, d surveyor called me that there is need to create a road at my (land) back i.e a plot will b inbetween two roads and that i should shift my pillar and the corner piece. Now, i need ur advice on what to do sir. Thanks. N.B He is d one who sold d land, measured, pegged and put d pillar.

l can get in touch with the company l signed deed of assignment with 4 times no reply to me

Gabriel Joseph

To be honest with you this is really helpful. Thanks

how do I submit my deed of assignment for record purpose

pls sir,I bought a land with power of attorney from estate management.Am I entitle to omonile receipt and deed of assignment?

i have a land which was purchased from the estate developers but i lost all documents to it by an act of God. what can i do

please sir, can u help us with a sample of the shedule page so that i ccan coinfirm that the schedule page of the deed of assignment for my land is made in the right form

Ola Abiodun

I bought a land in my name and wife’s name. I have now built a property on this land and all the paper works including CofO and the plan have our names both. The land and the property was solely bought and built with my money. I understand we both have claim because her name is on the documents.

What do I need to do to take her name off the the property, both the land and the building? Can you also please advise the likely cost?

I look forward to hearing from you

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General Principles of Assignments in Real Estate Transactions

Assume a seller, ABC Company, enters into a contract to sell a parcel of land (referred to here as “Blackacre”) to Ms. Green. Ms. Green subsequently assigns her interest in the contract to Mr. Smith. Such assignments of contracts of purchase and sale raise a number of practical issues—e.g. notice to the seller, payment for the assignment, and transfer of the deposit—that affect not only the seller but also the original purchaser and the eventual purchaser. A party wishing to assign its interest in a contract of purchase and sale to a new party should not assume that the matter is as simple as entering into an assignment with the new party and then walking away and forgetting about the contract.

A real estate contract will often contain provisions that limit or prohibit an assignment of a party’s interest in the contract. If the contract is silent as to the rights to the parties to assign their interests in the contract, then the rights of the parties, with few exceptions, can be assigned. Normally, assignments of contracts relating to the purchase and sale of real estate involve the purchaser assigning its interest in the contract; however, it is not unheard of to have the seller assign its interest in the contract.

In our scenario, to be binding on it as the seller, ABC Company must be given notice of the assignment, although it does not have to receive a copy of the assignment or the business terms relating to the assignment. If ABC Company has been given notice that Ms. Green’s interest in the contract has been assigned, it may be concerned that she is ‘flipping’ her interest in the contract for a profit. Consequently, ABC Company may wish to seek advice as to whether the contract is enforceable.

Assuming that Mr. Smith is paying Ms. Green a specified amount of money for the assignment, the question arises as to when this money will be paid. Ms. Green will want the money to be paid when they enter into the assignment but Mr. Smith will want to pay at the time that they complete the purchase and sale of Blackacre. In most cases, the latter time period is the norm but, in any case, money paid for an assignment is subject to the Goods and Services Tax.

Ms. Green will likely have paid a deposit to ABC Company pursuant to the contract and will want the deposit to be repaid to her at the time of the assignment rather than having to wait until the purchase and sale of Blackacre is completed. It would not be unusual for Mr. Smith to reimburse the deposit to Ms. Green at the time that they enter into the assignment.

Mr. Smith should look to obtain assurances by way of representations and warranties from Ms. Green that the contract to purchase Blackacre is in full force and effect and that her interest can be assigned to him. In turn, Ms. Green should look to obtain representations and warranties from Mr. Smith that he will fulfill her obligations to complete the purchase of Blackacre since an assignment will not release Ms. Green of her obligations under the contract unless such release is specifically provided for—and has been agreed to by ABC Company.

Frequently, and contrary to the scenario presented here, a contract for a real estate transaction will often limit the right of the purchaser to assign its interest in the contract. A common limitation is that “. . . the purchaser may only assign its interest in the contract with the consent of the seller, such consent not to be unreasonably withheld.” In most cases, it would not be unreasonable for the seller to insist that the assignee contract directly with the seller to fulfill the obligations of the assignor under the contract so that, if there is a default, the seller has the right to seek remedies against both the assignor and the assignee.

So long as all parties to a contract of purchase and sale are aware of their rights and obligations, the completion of a purchase and sale where a contract has been assigned can and should proceed in a straightforward manner.

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Real Estate Contracts

What is an assignment contract.

Assignment contracts are a vehicle used by real estate investors to transfer one party’s rights and obligations under an existing real estate contract to another party. Assignment contracts don’t involve transferring or selling the property directly like a purchase agreement. Instead, the buyer under the original purchase agreement (the assignor) assigns their rights and obligations under the purchase agreement to the assignee, sometimes for a profit. The assignee then becomes the buyer under the original real estate contract.

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When Is an Assignment Contract Used?

In one scenario, a type of real estate investor called a wholesaler contracts with the current owner(s) of a distressed property that may be unsellable to average homebuyers. The wholesaler creates a purchase agreement with that owner to buy their property. The wholesaler then finds an end buyer who wants to take possession of the property. The assignment contract is then created to transfer the wholesaler’s rights and obligations under the original purchase agreement to the end buyer.  

Elements of an Assignment Contract

• Assignor : the real estate wholesaler. This is the person who is the buyer under the original purchase agreement and who is selling or transferring their rights and obligations under that contract. 
• Assignee : the end buyer. This is the person who is purchasing or receiving the assignor’s rights and obligations under the original purchase agreement and who would ultimately pay the purchase price (plus any assignment fee agreed to in the assignment contract) and take possession of the property. 
• Description or identification of contract being assigned:  a description of the original purchase agreement being assigned. Oftentimes, the assignment contract will also attach the original purchase agreement or state that it has been provided to the assignee.   
• Subject property information: the property address, legal description, or property identification number/parcel number for the property that is the subject of the original purchase agreement.  
• Assignment earnest money amount:  like with other types of real estate contracts, earnest money shows the assignee is a serious buyer. The money helps ensure that the assignee won’t back out of the deal for frivolous reasons. 
• Assignee’s purchase amount: the amount the end buyer agrees to pay that fulfills or exceeds the original purchase agreement amount. 
• Assignment fee: the amount of money the assignor will make for finding an end buyer. The assignment fee should be clearly set forth in the assignment contract.
• Name of the company holding escrow : the assignment contract will designate what company is holding escrow.  This escrow company should match the escrow company listed in the original purchase agreement or you will need an amendment to the original purchase agreement or, in states where it is permissible, a split escrow.  
• Closing date: the date by which the transaction should be finalized. This should correspond to the original purchase agreement’s closing date. If a different date is used, an amendment to the original purchase agreement may be required.  
• How assignment earnest money is handled : should one party cancel the contract or fail to meet the contractual obligations, the earnest money may either be forfeited by the assignee or returned. In instances of a dispute between the parties, the third party holding escrow may release the assignment earnest money pursuant to the terms and conditions of the assignment contract.

Writing a comprehensive assignment contract is a vital part of several real estate investing strategies. If you’re new to creating these kinds of contracts, be sure to get some legal advice before moving forward. Once you have a solid assignment contract template in place,  transactions using this contracting tool will run more smoothly. 

* The information provided on this site does not, and is not intended to, constitute legal, financial, tax, or real estate advice. Please consult your expert for advice in those areas. All content is for general informational purposes only and is not intended to provide a complete description of the subject matter. Although Blueprint provides information it believes to be accurate, Blueprint makes no representations or warranties about the accuracy or completeness of the information contained on this site. Specific processes will vary based on applicable law. The title and closing process will be handled by a third-party attorney to the extent required by law. Product offerings vary by jurisdiction and are not available or solicited in any state where we are not licensed.

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Understanding an assignment and assumption agreement

Need to assign your rights and duties under a contract? Learn more about the basics of an assignment and assumption agreement.

Get your assignment of agreement

by   Belle Wong, J.D.

Belle Wong, is a freelance writer specializing in small business, personal finance, banking, and tech/SAAS. She ...

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Updated on: November 24, 2023 · 3 min read

The assignment and assumption agreement

The basics of assignment and assumption, filling in the assignment and assumption agreement.

While every business should try its best to meet its contractual obligations, changes in circumstance can happen that could necessitate transferring your rights and duties under a contract to another party who would be better able to meet those obligations.

If you find yourself in such a situation, and your contract provides for the possibility of assignment, an assignment and assumption agreement can be a good option for preserving your relationship with the party you initially contracted with, while at the same time enabling you to pass on your contractual rights and duties to a third party.

An assignment and assumption agreement is used after a contract is signed, in order to transfer one of the contracting party's rights and obligations to a third party who was not originally a party to the contract. The party making the assignment is called the assignor, while the third party accepting the assignment is known as the assignee.

In order for an assignment and assumption agreement to be valid, the following criteria need to be met:

• The initial contract must provide for the possibility of assignment by one of the initial contracting parties.
• The assignor must agree to assign their rights and duties under the contract to the assignee.
• The assignee must agree to accept, or "assume," those contractual rights and duties.
• The other party to the initial contract must consent to the transfer of rights and obligations to the assignee.

A standard assignment and assumption contract is often a good starting point if you need to enter into an assignment and assumption agreement. However, for more complex situations, such as an assignment and amendment agreement in which several of the initial contract terms will be modified, or where only some, but not all, rights and duties will be assigned, it's a good idea to retain the services of an attorney who can help you draft an agreement that will meet all your needs.

When you're ready to enter into an assignment and assumption agreement, it's a good idea to have a firm grasp of the basics of assignment:

• First, carefully read and understand the assignment and assumption provision in the initial contract. Contracts vary widely in their language on this topic, and each contract will have specific criteria that must be met in order for a valid assignment of rights to take place.
• All parties to the agreement should carefully review the document to make sure they each know what they're agreeing to, and to help ensure that all important terms and conditions have been addressed in the agreement.
• Until the agreement is signed by all the parties involved, the assignor will still be obligated for all responsibilities stated in the initial contract. If you are the assignor, you need to ensure that you continue with business as usual until the assignment and assumption agreement has been properly executed.

Unless you're dealing with a complex assignment situation, working with a template often is a good way to begin drafting an assignment and assumption agreement that will meet your needs. Generally speaking, your agreement should include the following information:

• Identification of the existing agreement, including details such as the date it was signed and the parties involved, and the parties' rights to assign under this initial agreement
• The effective date of the assignment and assumption agreement
• Identification of the party making the assignment (the assignor), and a statement of their desire to assign their rights under the initial contract
• Identification of the third party accepting the assignment (the assignee), and a statement of their acceptance of the assignment
• Identification of the other initial party to the contract, and a statement of their consent to the assignment and assumption agreement
• A section stating that the initial contract is continued; meaning, that, other than the change to the parties involved, all terms and conditions in the original contract stay the same

In addition to these sections that are specific to an assignment and assumption agreement, your contract should also include standard contract language, such as clauses about indemnification, future amendments, and governing law.

Sometimes circumstances change, and as a business owner you may find yourself needing to assign your rights and duties under a contract to another party. A properly drafted assignment and assumption agreement can help you make the transfer smoothly while, at the same time, preserving the cordiality of your initial business relationship under the original contract.

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Difference Between Assignment and Transfer

The difference between assignment and transfer is that assign means it's legal to transfer property or a legal right from one person to another. 3 min read

The difference between assignment and transfer is that assign means it's legal to transfer property or a legal right from one person to another, while transfer means it's legal to arrange for something to be controlled by or officially belong to another person.

When used as verbs, assign means to set apart or designate something for a purpose while transfer means to pass or move from one person, place, or thing to someone or someplace else. When used as nouns, assign means the assignee and transfer is the act of removing or conveying something from one person, thing, or place to another. Transfer generally refers to titles whereas assignment is used with obligations and rights.

Definitions of Assignment and Transfer

• Assignment: Assignment is used in real estate law and contracts law. It covers the transfer of rights held by the assignor to the assignee.
• Transfer: To remove or convey from one person or place to someone or somewhere else.

Distinction Between Assignment and Transfer

When distinguishing between assignment and transfer, take licenses, for example. Licenses are contracts that don't allow legal action for infringement. They fall under state law. Therefore, state law will decide whether the license is an obligation or right that can be transferred or assigned legally.

One way to distinguish this example is that an individual contract under an agreement cannot be assigned, like entitlement to grant back royalties . In addition, the contract cannot be transferred. You need to break it down and figure out what the actual issue is — the parties' intent. An additional distinction is when the contract holder is an entity and the business owners want to transfer a portion or all of their stock. This can be seen as an implied transfer of the whole contract. However, it would not likely be an assignment of the rights covered under this agreement.

Difference Between Assign and License

The key difference between assign and license is that with a license, the person who grants permission, known as the licensor, keeps an interest in the product being licensed . In an assignment, the assignor will transfer his or her rights to the product or property being assigned.

Another difference is that assignments must be in writing and a license can be executed without being written. Consider, for example, intellectual property such as patents. Patents can be licensed verbally in some instances, but assignments for patents must be in writing and filed with the United States Patent and Trademark Office .

Assignments grant the assignee full ownership of a product or property. Therefore, an assignment will typically cost more to acquire than a license.

Frequently Asked Questions

Are there ever situations in which a license can be transferred but is not assignable?

• Yes, in the case of allowing an assignment to one of your affiliates, the assignor would still be liable for the performance of the agreement under general assignment law. In this situation, you would not typically permit a transfer, because in a transfer, the person transferring would not maintain any obligations related to performance. Don't rely solely on this general understanding, but still expressly detail your agreement on what a licensee can legally do.

How will transfer and assignment rights affect someone's ability to sublicense?

• In theory, if a licensee has the authority to assign license rights to someone else, you could argue that it also provides the right to sublicense it. The issue here is that with a sublicense, the person sublicensing it keeps a license right, therefore effectively creating two licensees. With an assignment, only one right is assigned, and the assignee is the one who has possession of the license. With well-drafted licenses, the right to sublicense is not typically implied, as the licensor is the one who reserves all rights that are not expressly granted.

What is the effect of poorly drafted licenses?

• A poorly drafted license could result in giving someone implied rights to also sublicense. An example is a software license that allows a licensee to access the software without clarifying any restrictions or clearly defining the word “use.” This means that, depending on what this software is supposed to do, someone could think the term “use” means the licensee has permission to grant a sublicense as part of their usage rights.

If you need help understanding the difference between assignment and transfer, you can post your legal need on UpCounsel's marketplace. UpCounsel only accepts the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

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Content Approved by UpCounsel

• Assignment Law
• Assignment and Novation Agreement: What You Need to Know
• Legal Assignment
• Assignment Legal Definition
• Assignment Of Contracts
• Assignment of Rights and Obligations Under a Contract
• Partial Assignment of Contract
• Assignment of Rights Example
• What Is the Definition of Assigns
• Transfer of Intellectual Property

Assignment of Lease: How It Works and Parties Involved

Jump to section, what is an assignment of lease.

The assignment of lease is a title document that transfers all rights possessed by a lessee or tenant to a property to another party. The assignee takes the assignor’s place in the landlord-tenant relationship.

You can view an example of a lease assignment here .

How Lease Assignment Works

In cases where a tenant wants to or needs to get out of their lease before it expires, lease assignment provides a legal option to assign or transfer rights of the lease to someone else. For instance, if in a commercial lease a business leases a place for 12 months but the business moves or shuts down after 10 months, the person can transfer the lease to someone else through an assignment of the lease. In this case, they will not have to pay rent for the last two months as the new assigned tenant will be responsible for that.

However, before the original tenant can be released of any responsibilities associated with the lease, other requirements need to be satisfied. The landlord needs to consent to the lease transfer through a “License to Assign” document. It is crucial to complete this document before moving on to the assignment of lease as the landlord may refuse to approve the assignment.

Difference Between Assignment of Lease and Subletting

A transfer of the remaining interest in a lease, also known as assignment, is possible when implied rights to assign exist. Some leases do not allow assignment or sharing of possessions or property under a lease. An assignment ensures the complete transfer of the rights to the property from one tenant to another.

The assignor is no longer responsible for rent or utilities and other costs that they might have had under the lease. Here, the assignee becomes the tenant and takes over all responsibilities such as rent. However, unless the assignee is released of all liabilities by the landlord, they remain responsible if the new tenant defaults.

A sublease is a new lease agreement between the tenant (or the sublessor) and a third-party (or the sublessee) for a portion of the lease. The original lease agreement between the landlord and the sublessor (or original tenant) still remains in place. The original tenant still remains responsible for all duties set under the lease.

Here are some key differences between subletting and assigning a lease:

• Under a sublease, the original lease agreement still remains in place.
• The original tenant retains all responsibilities under a sublease agreement.
• A sublease can be for less than all of the property, such as for a room, general area, portion of the leased premises, etc.
• Subleasing can be for a portion of the lease term. For instance, a tenant can sublease the property for a month and then retain it after the third-party completes their month-long sublet.
• Since the sublease agreement is between the tenant and the third-party, rent is often negotiable, based on the term of the sublease and other circumstances.
• The third-party in a sublease agreement does not have a direct relationship with the landlord.
• The subtenant will need to seek consent of both the tenant and the landlord to make any repairs or changes to the property during their sublease.

Here is more on an assignment of lease here .

Benjamin W.

Parties Involved in Lease Assignment

There are three parties involved in a lease assignment – the landlord or owner of the property, the assignor and the assignee. The original lease agreement is between the landlord and the tenant, or the assignor. The lease agreement outlines the duties and responsibilities of both parties when it comes to renting the property. Now, when the tenant decides to assign the lease to a third-party, the third-party is known as the assignee. The assignee takes on the responsibilities laid under the original lease agreement between the assignor and the landlord. The landlord must consent to the assignment of the lease prior to the assignment.

For example, Jake is renting a commercial property for his business from Paul for two years beginning January 2013 up until January 2015. In January 2014, Jake suffers a financial crisis and has to close down his business to move to a different city. Jake doesn’t want to continue paying rent on the property as he will not be using it for a year left of the lease. Jake’s friend, John would soon be turning his digital business into a brick-and-mortar store. John has been looking for a space to kick start his venture. Jake can assign his space for the rest of the lease term to John through an assignment of lease. Jake will need to seek the approval of his landlord and then begin the assignment process. Here, Jake will be the assignor who transfers all his lease related duties and responsibilities to John, who will be the assignee.

You can read more on lease agreements here .

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Assignment of Lease From Seller to Buyer

In case of a residential property, a landlord can assign his leases to the new buyer of the building. The landlord will assign the right to collect rent to the buyer. This will allow the buyer to collect any and all rent from existing tenants in that property. This assignment can also include the assignment of security deposits, if the parties agree to it. This type of assignment provides protection to the buyer so they can collect rent on the property.

The assignment of a lease from the seller to a buyer also requires that all tenants are made aware of the sale of the property. The buyer-seller should give proper notice to the tenants along with a notice of assignment of lease signed by both the buyer and the seller. Tenants should also be informed about the contact information of the new landlord and the payment methods to be used to pay rent to the new landlord.

You can read more on buyer-seller lease assignments here .

Get Help with an Assignment of Lease

Do you have any questions about a lease assignment and want to speak to an expert? Post a project today on ContractsCounsel and receive bids from real estate lawyers who specialize in lease assignment.

ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.

Meet some of our Assignment of Lease Lawyers

Ms. Melton-Mitchell is a seasoned executive that has obtained a law degree and is practicing law as a second career. She has spent over 25 years in the health care industry and is well versed in health law, contract law, financial law, trusts and estates, M&A and other types of transactional law. She maintains evening and weekend hours to allow clients flexibility in connecting with her around their schedule.

Robert McMillan Arthur is a collaborative attorney and mediator practicing across Wisconsin, with offices in the Metro Milwaukee area and Northeastern Wisconsin. He is a general practitioner, concentrating in Small Business Law, Entertainment Law, Intellectual Property Law, Nonprofit Law, Divorce and Family Law. Robert’s business law practice focuses on the needs of small, closely-held businesses and startups. As a veteran of a family owned business, Robert applies his extensive experience to advise his clients in a broad spectrum of legal issues, including contracts, licensing, trademark, copyright, employment, and business formation. With multidisciplinary qualifications and experiences, Robert chose his career in law to help people caught up in difficult situations in their personal or professional lives. His core principle of law practice is based on empowering and informing clients, advocating for their interests when appropriate, and guiding them in difficult problem solving.

I have practiced civil law for 13 years and have concentrated my practice serving the construction and real estate industries.

Steve has 20+ years of IP and litigation experience, including 10+ years of experience at two of the most prestigious large U.S. law firms, Greenberg Traurig LLP, (AMLAW 10) and Sheppard Mullin LLP (AMLAW 100). Steve has been a licensed U.S. Patent and Trademark Office registered attorney and litigator since 2002. Steve’s extensive experience and interpersonal skills have given him the skills that allow him to provide his clients with the very best quality and service. Steve has successfully represented clients achieve their goals in a variety of IP, patent, trademark and trade secret disputes. He has successfully obtained many hundreds, if not over a thousand, valid and enforceable U.S. and international patents and trademarks applications for his clients over the years. As a result, he has strong, longstanding relationships with many of the Examiners at the USPTO and works with an international team of foreign associates to secure foreign rights and litigate abroad whenever needed. Many of Steve’s clients have been a client of Partners Law Group for 5+ years. More than a few have been clients for 15+ years. Steve prides himself on providing accurate results and efficiency-driven advice on complicated IP, litigation, and real estate matters in a clear and concise way; helping his clients make the best decisions possible when dealing with complex and sensitive legal matters. Steve has successfully negotiated hundreds of complicated licensing and pre-litigation IP, patent, trademark, business, real estate cases and matters for various clients large and small. Steve’s IP practice focuses on all aspects of intellectual property and covers various technical disciplines. He has extensive experience in medical devices, pharmaceuticals, internet or business methods and processes, broadband and 5G technologies, data acquisition, migration, monitoring and protection, piracy, nutritional supplements, sports and nutrition products, herbal products, pharmaceuticals, orthodontics, and surgical procedures and devices, health-related products to computer hardware and software, music, and mobile device applications, hardware and software, business methods, industrial machinery, mechanical devices to other technologies he understands and believes he can help the client achieve his or her goals.

30+ Years counseling clients in entertainment, media and the arts and representing them in transactional, structural and strategic matters.

I have experience with the protection and monetization of intellectual property, negotiating license agreements that have earned several hundred thousand dollars in revenue, and I have negotiated multiple multi-million dollar agreements. Additionally, I have worked with various client to incorporate intellectual property strategies into their underlying business plans. I have been working remotely for over seven years and I have a home office dedicated to my work. I am available to travel to clients on an as needed basis. I enjoy working with clients in this manner because the costs are reduced, and I have the freedom to travel to my clients as needed.

Hello! I'm an attorney who practices mainly landlord/tenant law (eviction, both plaintiff and defendant side); and criminal law (misdemeanor). I also work as appearance counsel to fill in at hearing when conflicts arise for other lawyers.

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Assignment of Lease

Contract to lease land from a church?

I’m planning on leasing land from a church. Putting a gym on the property. And leasing it back to the school.

Ok; first step is that you will need a leasing contract with the church. Ask them to prepare one for you so you would just need an attorney to review the agreement and that should cost less than if you had to be the party to pay a lawyer to draft it from scratch. You need to ensure that the purpose of the lease is clearly stated - that you plan to put a gym on the land so that there are no issues if the church leadership changes. Step 2 - you will need a lease agreement with the school that your leasing it do (hopefully one that is similar to the original one your received from the church). Again, please ensure that all the terms that you discuss and agree to are in the document; including length of time, price and how to resolve disputes if you have one. I hope this is helpful. If you would like me to assist you further, you can contact me on Contracts Counsel and we can discuss a fee for my services. Regards, Donya Ramsay (Gordon)

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I never knew how difficult it was to obtain representation or a lawyer, and ContractsCounsel was EXACTLY the type of service I was hoping for when I was in a pinch. Working with their service was efficient, effective and made me feel in control. Thank you so much and should I ever need attorney services down the road, I'll certainly be a repeat customer.

I got 5 bids within 24h of posting my project. I choose the person who provided the most detailed and relevant intro letter, highlighting their experience relevant to my project. I am very satisfied with the outcome and quality of the two agreements that were produced, they actually far exceed my expectations.

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What Is an Assignment of Contract? [How It Works In Real Estate]

What Is an Assignment of Contract?

One intriguing strategy in real estate investing that often stirs interest among newbie investors is the assignment of contracts. This approach, which allows an investor to pass the contractual rights and obligations of a property purchase contract to another buyer, is seen to provide highly profitable opportunities.  

If you are an investor who wants to try this technique to achieve financial freedom, this blog is for you! Here, we'll delve into the nitty-gritty of contract assignment, explaining its mechanism, benefits, potential pitfalls, and the crucial steps involved. We hope that after reading this blog, you can navigate the real estate market with confidence!

What Is an Assignment of a Contract in Real Estate?

In real estate wholesaling, an investor agrees to buy a personal property, often at a below-market price, then assigns the contract to a different buyer, often another investor, for a higher price. 

The difference between the contracted price and the price paid by the end buyer represents the wholesaler's profit, known as the assignment fee. 

For example, an investor might secure a contract to purchase a personal property for $100,000, then find an end buyer or new party willing to pay $120,000 for the same property. By assigning the contract to the end buyer, the investor earns a $20,000 assignment fee. 

However, it's crucial to note that not all real estate contracts can be freely assigned. Some contracts may include a "no assignment" clause that prevents the transfer of the contract to another party. 

Thus, an investor needs to ensure that assigning contractual rights is allowed before proceeding with this strategy. If an assignment clause is not present in the contract, the investor may need to negotiate with the original party or owner to include in the contract rights it or find an alternate method to transfer the property to a new party.

In essence, an assignment contract is a way for real estate investors to connect sellers and buyers, while generating a profit from the transaction without needing to purchase, own, or manage the property themselves. It's a strategy that requires careful planning, thorough due diligence, and an understanding of real estate laws and market conditions.

Assignment Contract vs. Double Closing

Both assignment contracts and double closings are strategies used in real estate investing, particularly wholesaling, but they function differently.

As previously discussed, an assignment of contract involves the wholesaler (assignor) transferring their contractual rights in a property purchase agreement to another party (assignee), typically another investor. 

The wholesaler never actually purchases the property . Instead, they sell their contract to buy the property. The assignee pays an assignment fee to the wholesaler, then proceeds to close the deal with the original seller. In this arrangement, the end buyer is aware of the wholesaler's profit.

Meanwhile, double closing , also known as a "simultaneous close," involves the wholesaler actually purchasing the property before quickly reselling it to the end buyer. This is perhaps the main difference between the two.

Essentially, there are two separate transactions: one where the wholesaler buys from the original seller and another where the wholesaler sells to the end buyer. 

Both transactions of the contract occurs back-to-back, even on the same day. The wholesaler uses the funds from the end buyer to pay the original seller and keeps the difference as profit. This approach allows the wholesaler's profit to remain hidden from all parties.

Is an Assignment Contract Considered Legal?

Yes, an assignment contract is generally considered legal in real estate transactions. It is a common practice, especially in real estate investing and wholesaling.

However, the legality can depend on several factors, including the terms of the original contract and the laws in a particular area.

Some contracts may disallow assignment through a clause that "prohibits the assignment of the contract without the consent of the other party." In such cases, assignment of the written contract without consent would violate public policy and could potentially lead to legal repercussions. This may also encourage litigation.

Additionally, while an assignment contract is generally legal, some states in the U.S. have specific rules and regulations about how real estate contract assignments and wholesaling, more generally, should be conducted. 

Some require specific disclosures to be given to the other party to the contract or have particular rules about how the transaction can be advertised. Some do not also allow material alteration, In some jurisdictions, regular wholesaling activity might require a real estate license, contract expiration date for commercial contracts, etc.

Pros and Cons of Assignment of Contract in Real Estate

The assignment of contracts in real estate comes with its own set of advantages and disadvantages, which investors need to consider carefully before entering any deal.

To help you decide if this real estate investing strategy is indeed for you, read the following pros and cons.

Pros of Assignment of Contract

• Less Capital Required: Because the wholesaler is simply assigning the contract and not actually purchasing the property, less capital is required compared to traditional real estate transactions.
• Profit Potential: Assigning a contract can be profitable, especially when properties are secured under market value and the seller and buyer guarantees performance. The difference between the contract agreement price from the assignee and the purchase price the end buyer pays can result in significant earnings.
• Faster Transactions: Assignments often lead to faster transactions as the assignor is not taking possession of the property. They don't have to do heavy obligations such as a title search, contact a company to make repairs, etc. Once a suitable assignee is found, the existing contract can be assigned and the transaction completed.

Cons of Assignment of Contract

• Dependent on Buyers: Wholesalers are reliant on finding end buyers and getting a closing date. If an assignee can't be found in time, the wholesaler may be forced to back out of the deal or risk legal consequences.
• Limited Control: The wholesaler doesn't own the property and therefore has limited control over it. They can't make improvements or changes to increase its value since it isn't part of their obligations.
• Transparency of Profit: In an assignment, the assignee can see how much profit the assignor is making, which could potentially lead to negotiations or dissatisfaction in the obligations. But, of course, the assignor warrants that the fee is fair.
• Legal Considerations: You cannot assign rights to all types of contracts, and the federal government law may have specific regulations around how assignments work. Wholesalers must be aware of the legal landscape to ensure they conduct business following the law and that the two parties they will involve know the legal term of transfer.

Steps in Contract Assignment in Real Estate

Contract assignment in real estate can be a profitable strategy when done correctly. Each step in this process requires careful attention to detail and due diligence so as not to break the law. It is ideal to consult with a real estate attorney or other professionals before doing any transfer of property.

Nevertheless, here are the steps typically involved in a contract assignment in real estate.

Step 1. Find the Right Investment Property

The first step in contract assignment is identifying a suitable investment property. You need to find a property that can be purchased under market value and resold at a profit. 

This could be a distressed property, a foreclosed property, or simply a property that a seller needs to unload quickly. Market research and property analysis are critical at this stage.

Step 2. Prepare the Real Estate Contract 

Once a property has been identified, you need to prepare a real estate purchase agreement. This is the contract agreement that you will eventually assign to another buyer. It's crucial that this original contract either expressly allows for assignment or at least does not prohibit it.

If you are using a template from others or it has a trade name, make sure you are not going against the intellectual property law. There are already certain claims in the past about this, so be cautious.

Step 3. Submit the Contract

After preparing the original contract, it needs to be submitted to the seller. The seller may accept the contract as is, reject it outright, or propose changes. If changes are proposed, negotiations will take place until an agreement is reached. 

Step 4. Find an End Buyer Who Will Accept the Contractual Obligations

With an accepted contract in hand, you can now seek an end buyer to whom the contract will be assigned.

This could be another investor or a traditional homebuyer. Marketing the original contract can involve networking, advertising on real estate platforms, or working with a real estate agent.

Step 5. Assign the Contract to an End Buyer

After identifying an end buyer, you will assign or transfer the existing contract agreement to them (this may be an individual or a real estate company).

This involves an assignment agreement, which transfers your contractual rights and obligations under the original purchase contract agreement to one party or the end buyer (real estate company or investor).

The assignment agreement should clearly outline the original terms of the assignment, including the assignment fee that you, as the assignor, will receive.

Step 6. Collect the Fee

After the assignment agreement has been signed and transferred on the closing date, you can collect the assignment fee from one party. This is your profit from the assignment contract transaction.

The closing process then proceeds between the original seller and the end buyer, without any further involvement on your part. The property ownership will be transferred to the end buyer and you would no longer have any responsibilities or duties with them.

Final Thoughts: What are Assignment Contracts? [How Does Assignment of Contract Work in Real Estate]

Whether you're a seasoned real estate wholesaler or just starting, it's clear that understanding assignment contracts and how they function within the real estate sector can open doors to new opportunities and potentially profitable ventures. 

With the right approach, a keen understanding of the property market, negotiation skills, thorough due diligence, and creativity, these contracts can be your main income stream.

If you want to find leads on properties that you can assign to another buyer, reach out to us at Property Leads . We offer highly motivated seller leads in your target area for a very reasonable price. We guarantee a high conversion rate since we generate our leads through SEO.

Fill out our form below to start finding the best contract reassignment deals!

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Easement Basics

By Robert Rafii, Esq. | Legally reviewed by Chris Meyers, Esq. | Last reviewed May 15, 2024

Legally Reviewed

This article has been written and reviewed for legal accuracy, clarity, and style by  FindLaw’s team of legal writers and attorneys  and in accordance with  our editorial standards .

Fact-Checked

The last updated date refers to the last time this article was reviewed by FindLaw or one of our  contributing authors . We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please  contact an attorney in your area .

The term easement is often used, but some might be uncertain as to what it means. In real estate law, an easement  is a property right that:

• Gives its holder (the dominant tenement) a limited legal right in land
• Is owned by someone else (the servient tenement)

It's common for people not to have a clear understanding of easements. Numerous legal problems can arise in their creation, interpretation, and implementation. State laws also affect private property easements differently depending on various factors. This article will provide some basic information, including:

• How easements are created and transferred
• The rights and remedies provided by easements
• Legal issues to consider when creating a legal document for an easement

You can use the links below to jump to specific topics in this article if you wish.

Easements at a Glance

Types of easements, creation of an easement, rights and remedies under an easement, transferability, termination of easements.

• Easement Attorneys

Read on to learn what you need to know about easements.

An easement is a nonpossessory property interest. It allows the holder of the easement to have a right of way or use property that they do not own or possess. An easement doesn't allow the easement holder to:

• Permanently occupy the land
• Exclude others from the land unless they interfere with the easement holder's use

In contrast, the property owner may continue to enjoy their real property. They may exclude everyone except the easement holder from the land.

Land affected or burdened by an easement is called a servient estate. Land or person benefited by the easement is known as the dominant estate. It is the responsibility of the dominant estate holder to maintain the easement.

If the easement benefits a particular piece of land, it's said to be appurtenant to the land. If the easement only benefits an individual, the easement is known as in gross. Easements in gross do not run with a person’s land and thus do not pass to new owners in the future.

Most types of easements are affirmative easements. This means that they allow the use of another's land. Less common are  negative easements , which usually involve preserving a person's access to light or view. This is accomplished by limiting what can be done on a neighboring or nearby property.

Easements may also be prescriptive, implied, or express . Prescriptive easements are made over time when someone gains a right of way that is continuous. This can come up under  adverse possession .

Implied easements exist where it is reasonably necessary for neighboring properties to function as intended. Express easements are created by deeds or legal documents that set out the terms of the easement.

There are many categories of easements, each of which suits a different purpose. In general, private easements concern land use rights between two or more private parties.

Public easements benefit government interests for the public good. They include accommodation in private lands for public roads and utilities. For example, utility easements allow utility companies to run plumbing and power lines through the private lands of homeowners.

Easements are usually created by a transfer in a deed. They may also be made through written documents such as:

• Wills in estate planning
• Private contract

Except as provided above with respect to implied and prescriptive easements, creating an easement requires writing. The writing involves the same formalities as the transferring or creating of other interests in land. It often requires:

• A legal document that describes the property ownership
• The specific purpose of the easement and the affected use of the property line
• Notarized signatures in most states
• Proper recording at the  county clerk's office or register of deeds  where the property is located

Like liens, recorded easements will show up during a title search .

In limited cases, a court will create an easement by implying its existence based on the circumstances. Two common easements created by implication are:

• Easements of necessity
• Easements implied from quasi-easements

Easements of necessity are often implied to give access to a landlocked piece of property. Easements implied from quasi-easements are based on a landowner's prior use of part of their property for the benefit of another portion of their land.

Other methods of establishing easements include:

• Prescriptive use  (the routine, adverse use of another's land)
• Easement by estoppel , custom,  public trust , and  condemnation

As a general rule, an easement holder has a right to do whatever is reasonably convenient or necessary in order to enjoy fully the purposes for which the easement was granted. This is as long as they do not place an unreasonable burden on the servient land.

The owner of the servient land may make any use of that land that does not unduly interfere with the easement holder's use of the easement. What constitutes an undue burden depends on the facts of each individual situation.

If a court determines that a servient estate is unduly burdened by unreasonable use of the easement, the owner has several potential legal remedies. These include court orders:

• Restricting the dominant owner to an appropriate enjoyment of the easement
• Monetary damages when the easement holder exceeds the scope of their rights and damages the servient estate
• In some cases, termination of the easement

Likewise, remedies exist for interference by the servient owner. Interference with an easement is a form of  trespass , and courts frequently order the removal of an obstruction to an easement.

If interference with an easement causes a reduction in the property value of the dominant estate, courts may also award compensatory damages to the easement holder.

In general, an easement appurtenant is transferred with the dominant property. This occurs even if transferability isn’t mentioned in the legal document. The document transferring the dominant estate may expressly provide that the easement shall not pass with the land. This may or may not be enforceable depending on the terms of the original easement and local laws.

Because easements in gross are treated as a right of personal enjoyment for the original holder, they are generally not transferable. However, several states have enacted statutes designed to facilitate the transfer of easements in gross. The transfer of easements in gross for may be permitted for commercial uses such as:

• Transmission lines

There are other types of transfer of easement in gross.

Courts assume easements are created to last forever unless otherwise indicated in the document creating the easement. Despite this, an individual granting an easement should avoid any potential problems by providing that the easement is permanent.

Although permanent easements are the norm, they  can be terminated  in a number of ways. These include:

• Construction work ends : Easements of limited duration used to provide temporary access to a dominant estate will be terminated upon the completion of construction work.
• One owner buys the other out : An easement may be terminated when an individual owning the dominant estate purchases the servient estate. It may also be terminated when the holder of an easement releases their right in the easement (in writing) to the owner of the servient estate.
• Abandonment of an easement : As a general rule, not using an easement doesn't constitute abandonment.
• Misuse or sale of a servient estate : It's uncommon, but either of these may terminate an easement.

Condemnation of an easement by a public authority can also terminate it. This means the government can step in to end the easement as long as it is permissible under the law.

For instance, suppose a state condemns servient estate because of health safety concerns. The land may no longer be accessible given the priority of public health. This is for a purpose that conflicts with an easement that would otherwise allow access to that property. In this case, government action will terminate the existing easement.

Let an Attorney Ease Your Easement Concerns

The prevalence of easements and their nonpossessory nature creates a unique set of considerations. These considerations apply when creating, interpreting, and implementing an easement. It's essential to have a basic understanding of the way easements are created while considering their scope, transferability, and how they're terminated.

A  real estate attorney  with easement experience can help set you on the right path.

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SUMMARY OF DIFFERENCE BETWEEN CONTRACT OF SALE AND DEED OF ASSIGNMENT

Contract of sale and deed of assignment are both documents used in real estate-related transactions in Nigeria. Although they are both used in property transactions the difference between both documents can be derived from their distinctive features and the role they each individually play in the acquisition of title to landed properties in Nigeria.

Generally, there are five stages involved in the process of acquisition of land in Nigeria, which range from the pre-contract stage to the post-completion stage. The contract of sale is executed at the second stage of a land transaction; it is evidenced in writing and is not mandated to be under seal. It is a preliminary land document executed in the transfer of ownership in the land to another from the seller to the buyer. A contract of sale takes effect after it has been exchanged between parties and it contains not only the basic requirements but goes further to include detailed terms, consideration, and future obligations of what the parties have agreed in respect of the land transaction. Some of the provisions of a contract of sale are:

• Full details of the parties – (name and address).
• Particulars of the property to be transacted (location, survey plan, etc).
• Particulars of witnesses.
• Purchase price of the property.
• Payment of deposit, to whom it is to be paid, and in what capacity.
• Balance and interest on unpaid purchase sum where the payment is to be paid in installments.
• The capacity of the vendor.
• Risk and insurance.
• Possession before completion
• Completion date of the transaction.
• Provision for fixtures and fittings.
• Specific terms, risks, etc.

Where a contract of sale has been executed between parties, an equitable right of the title is passed to the buyer as the vendor still retains legal title to the land and holds the same in trust for the buyer. A vendor cannot transact with the land contrary to the agreement in the contract and no party can rescind the contract without being held liable for a breach of contract.

Features of a Contract of Sale

• In a contract of sale, the vendor is committed to the transaction and the purchaser has sufficient time to investigate the title before the final completion of the transaction.
• The death of either party to the transaction does not terminate the contract as personal representatives can proceed with the contract of sale.
• A contract of sale prevents last-minute withdrawal as withdrawal would amount to a breach of the contract.
• A contract of sale protects the equitable interest of the purchaser
• It crystallizes the position of the parties as terms have been expressly agreed upon.
• The vendor cannot unilaterally and subsequently increase the purchase price as the price has already been fixed in the contract.
• Payment of lesser stamp duties.

Deed of Assignment is the legal instrument executed between a buyer and seller upon the negotiation and completion phase of a sale of land transaction, subject to perfection. It is usually demanded by the buyer of the real property at the conclusion of the property transaction as the final legal document that transfers the interest of title in a land without any conditions attached, beyond the payment of the consideration price of the property. In a deed of assignment, the nomenclature of parties changes from Vendor to Assignor and Buyer to Assignee. Upon the execution of a deed of assignment between parties, there is a permanent transfer of legal title and ownership to land from the assignor to the assignee for a consideration paid and accepted by the assignor.

Deed of assignment is required to be evidenced in writing; to be signed, sealed, and delivered by parties to the transaction. A deed of assignment is said to have been delivered when interest has passed to the Assignee and the interest can be passed with or without a physical handover.

Another major difference between a contract of sale and deed is that under a deed of assignment, the title of land acquired is required to be perfected upon payment of the full consideration and execution of the deed. The perfection of title involves the assignee taken the required steps to register the deed of assignment at the appropriate Land Registry. The process for the perfection of a deed of assignment involves the following three steps;

• Obtaining Governors Consent.
• Stamping of the deed of assignment, and
• Registration of the deed of assignment.

Finally, in a contract of sale, the buyer only acquires equitable interest in the property while the seller retains the legal interest in trust for the buyer. In the deed of assignment, the assignee acquires legal interest in the property and it can serve as a good root of title to subsequent buyers while the interest of the assignor on the same property is completely extinguished.

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Deed of Assignment and its Importance in Land Transactions

Buying a property or piece of land should be a great moment of joy. But that great moment of joy can get turned on its head, to be followed by sorrow and regret. This can easily happen without proper due diligence. A lot of Nigerians have fell victim due to laxity in due diligence when transacting real estate.

When a property or piece of land is purchased or transferred from one owner to another, there are some important documents the new owner must obtain from the individual transferring the land. One of these documents is referred to as a Deed of Assignment and it is the most important legal document you need to get for your land. It is akin to getting a receipt from a retailer after purchasing a valuable item.

What is a Deed of Assignment?

By definition, a Deed of Assignment is simply a contract or an agreement between the seller of a piece of land and the buyer showing details and evidence that all title, rights, and interest of ownership of the land has been transferred to the buyer.

In legal terms, a Deed of Assignment is an agreement where an assignor declares a promise that from the assignment date or any date stated within the contract, the assignor allocates the entirety of its stake in that land or property to the assignee.

By these definitions, it is easy to understand why a Deed of Assignment has such importance in real estate transactions. It is considered a must for all transactions of transfer of ownership of land.

In Nigeria, it is believed that 6 out of 10 people have been victims to property fraudsters that pretend to be owners of a piece of land. They proceed to show off the land to numerous prospective buyers who would often accept a receipt as a proof of transfer of ownership.

So, in plain terms, a Deed of Assignment can be likened to the legal equivalent of a receipt for goods purchased at a store or the particulars of a newly bought vehicle. With the Deed of Assignment document, the bearer has all legal rights to the transferred property and can use it as he or she deem fit.

For a Deed of Assignment to be legally binding, it needs to clearly identify the seller and the buyer, and it must also contain the following information:

- Date of transfer of ownership

- Addresses of the seller and buyer and how they are binding to the successors, friends and other people who represent the seller and buyer in any capacity

- Price of purchase of property

- Detailed description of property, including the size of the property

- A history of transfer of ownership of property, from the date it was first acquired to the time it is to be sold to the new owner

- Covenants or promises that the buyer and seller will undertake in order to execute the deed

- A section for the Commissioner of Oaths or Governors Consent to authenticate and sign the agreement

- Signature of the seller and buyer

As a legally binding document in real estate transactions, a Deed of Assignment is often recorded in the local land registry as a proof of transfer of the property to the new owner. The format of a Deed of Assignment is made up of a cover page that show the identities of the buyer and seller as well as a description of the land; a second page that show the date of the transfer, names and location of buyer and seller, and a history of how the seller came into possession of the land; a third page that show the description and cost of the land, a survey plan number including the date and name of surveyor, and the promises that both buyer and seller would abide after the transaction is completed; and a last page that display signatures of the buyer and seller as well as signatures of witnesses to the transaction.

Because most property buyers are not familiar with the documents that are required to be prepared and transferred to them by land sellers, it is advisable for property buyers to always get the services of a lawyer in order to protect their interest during the course of property transactions.

Tucker reinstated, 'overly excited' to be back with Astros

Brian McTaggart

HOUSTON -- The Astros welcomed All-Star outfielder Kyle Tucker back to their starting lineup for Friday’s series-opening 8-0 win over the Diamondbacks at Minute Maid Park, marking his first game action since he fractured his right shin on a foul ball on June 3.

Tucker, who didn’t have a Minor League rehab assignment, batted fourth and started at designated hitter against Arizona. To make room on the roster, infielder Zach Dezenzo was optioned to Triple-A Sugar Land, while left-hander Parker Mushinski was designated for assignment to clear room on the 40-man.

"He is overly excited,” Astros manager Joe Espada said. “He’s happy to be back in the lineup. We all are happy to have him back in the lineup. The extra energy [he brings] to the club, the extra bat in there, everyone is excited to have him back.”

• Be there for Jeremy Peña flex bobblehead on Saturday

Espada said the Astros will have to monitor Tucker’s playing time closely the remainder of the season, meaning he won’t play every day. Tucker is running at about 75-80 percent intensity, Espada said.

"Day to day, we’ll see how he feels,” Espada said. “It’s not going [to be] pencil him in [for] days in a row. We just have to wait and see how he feels."

Despite playing only 60 games, Tucker earned his third All-Star selection this season on the strength of a terrific start: a .266/.395/.584 slash line with 19 home runs, 40 RBIs and 10 steals. Houston was 27-34 and seven games out of first place at the time of Tucker's injury, but it entered Friday with a 4 1/2-game lead over Seattle for first place in the AL West.

Tucker revealed Monday that a small fracture was found in his shin, which comes as no surprise considering he's been sidelined for three months. The injury had been called a shin contusion following the initial imaging and testing.