Assignment of Sale to Investor

[Anonymous]

I am doing my first non-family JV with an Investor. He will be the only one on title; however I am the one putting in the offer and doing the negotiating. On the Offer to Purchase, I believe I have to allow for an assignment of sale. My Realtor gave me the wording - "The buyer reserves
the right to assign this contract with no change in liability to the
seller on
or before subject removal". I want to make sure that if I assign the sale, and the Investor backs out after subject removal, that I am not held liable to complete the sale. Is there better wording to use?



Many thanks.

 

[Thomas Beyer]

The buyer should be "your name and/or nominee"
Then you can assign to any person or corporation.




However: once you waive conditions [and put up a 2nd deposit] and you do not close the one or two deposit(s) are at risk, plus depending on the contract wording are liable to close and liable for damages !
The only way to minimize this potential loss is with a very small deposit , a appropriate wording of "no liabilities besides the deposit(s)" and a 2nd indemnity contract with the investor.

 

[RussellWestcott]

Your buyers agent should be able to help you out with much of this, and it sounds like they have dealt with this in the past. You will want to run this by your Mortgage Broker too, as it will impact the financing.



The way, I have done this with the most success is to write a clause as you mentioned above, plus I also get an amendment to the agreement (singed by both the seller and buyer (you)), before the end of the condition removal, stating who is the final buyer of the property.



This way you have the right to assign the contract, plus you have identified the ultimate buyer that everyone signs off and agrees to.



Make sure you run this by your Mortgage Broker, because they will have to get you a mortgage, and the bank will want to know whom they are lending to

 

[markl]

I think this is something to be concerned about if they do not close you are liable. You can put in a clause indemnifying yourself upon assignment have your lawyer draw up the clause. But in my opinion unless it sneaks through no seller will accept the clause.



I would ensure you screen your prospective JV partners very well to ensure that this is not a possibility.



Regards,

 

[ChrisDavies]

I usually explain this up front when I'm working for the buyer and include a term in the contract allowing us to amend the contract with the correct names. Then it's a simple amendment, and usually we draw up a fresh contract with all the same terms we've negotiated. (also handy if the offer has been faxed back and forth a couple times).