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UNDERSTANDING ASSIGNABILITY OF A REAL ESTATE CONTRACT

Monday, June 3, 2024   /   by Richard Eimers

UNDERSTANDING ASSIGNABILITY OF A REAL ESTATE CONTRACT

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By Richard Eimers, June 3, 2024

Assignability in real estate contracts allows the buyer to transfer their rights and obligations to another party. In Florida, understanding the nuances of assignability is crucial for both buyers and sellers to ensure smooth and legally compliant transactions.

What is Assignability?

Assignability refers to the buyer's ability to transfer their contract rights to another party. This can be a valuable option in various situations, such as when the buyer finds a more suitable purchaser or when an investor needs to transfer the contract quickly.

Types of Assignability Clauses

In Florida, real estate contracts typically include two main types of assignability clauses:

  1. Assign and be Released from Liability: The original buyer transfers their rights and is no longer liable for any contract obligations.
  2. Assign and Remain Liable: The original buyer assigns the contract but retains liability if the assignee fails to meet the contract terms.

Key Considerations

  • Contract Language: It is essential to include clear language about assignability. For example, writing "and/or assigns" after the buyer’s name can specify the intent to allow assignment.
  • Legal Requirements: Florida does not provide a standard form for assignment contracts. Buyers must either draft their own or hire a professional to ensure all legal requirements are met.
  • AS-IS Sale and Purchase Contracts: These contracts in Florida specifically address assignability, providing options for assignment with or without release from liability.

Benefits of Assignability

  • Flexibility: Allows investors to transfer contracts if a more advantageous opportunity arises.
  • Risk Management: Provides an exit strategy for buyers unable to fulfill the contract.

Conclusion

Understanding the assignability of real estate contracts in Florida is essential for navigating the market effectively. Clear contract terms and awareness of legal implications can protect both buyers and sellers in assignable transactions.


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Beach Road Realty
Richard Eimers
17 Roundwood Drive
Inlet Beach, FL
850-259-1798

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