To that end, the council recommends inclusion of an “Assignment Option Clause,” stating “the buyer reserves the right to assign this contract in whole or in part to any third party without further notice to the seller.”In other words, the ostensible buyer can play the role of middle man, and subsequently flip the property, pocketing any additional profit.
It is worth noting that the original seller is not out any money; hence my neighbour’s insouciance. Housing is extremely costly and in short supply in this region and thus ideally reserved for those wishing to acquire housing units as places to live.
The aggrieved seller can also prevent the shell purchaser simply walking away from the transaction without liability for the additional costs and expenses incurred due to the breach of the purchase agreement.
The seller can avoid being blackmailed into settling for only a portion of the initial deposit in order to avoid incurring the cost, expense and delay of suing the shell assignee.
Unfortunately, prior to the close of escrow, if the new shell purchasing entity defaults on its obligations, and the seller seeks to recover the initial deposit based upon breach of contract, the seller is often left with less than a full recovery.
Real Estate Assignment Contract
When the replacement purchasing entity is a shell company with no assets, the seller may be unable to fully recoup its expenses, including attorney fees and escrow and title cancellation expenses.My neighbour told me last fall he had sold his Kerrisdale home with a distant closing date of January, in a “contract assignment” arrangement.He did not appear distressed, despite the fact he did not receive the additional profit that flowed from the quick flip that took place following the initial sale.Second, the provision should state that any such assignment to a new buying entity will NOT relieve the original buyer of its obligations under the purchase contract.By doing so, the seller will have a remedy against both the newly – formed defaulting assignee and the original purchaser.A big title saying "Learn how to make big money with real estate" or something to that effect followed by an offer to attend a free seminar. Here is when it's NOT a scam: By definition "wholesaling" is buying products, and then selling them at a profit.I get asked about these programs all the time, so I decided to attend a few of these "free seminars" to get a better idea of what they are about. In almost every industry this can be done ethically and legally.The seller, therefore, can pursue both entities for the initial deposit and if, upon default, the new buyer refuses to release the initial deposit from escrow, the seller can sue both entities for recovery of the initial deposit and all costs and expenses (including attorneys’ fees, cancellation expenses and interest).Additionally, the judgment will be “joint and several,” meaning that the seller can recover from either entity, permitting the seller to concentrate its collection efforts against the original purchaser (which has assets), rather than wasting time and money pursuing the shell entity.NDP housing critic David Eby remarked on Monday that the situation leads “to the inevitable conclusion that oversight of the real estate industry in B. is woefully inadequate.”Well, anyone who has ever made a complaint to the Law Society of B. or the College of Physicians and Surgeons may have the impression that regulatory bodies often do a better job of protecting members of their industry than members of the public.Those who have seen the movie, The Big Short, about the financial shenanigans surrounding the 2008 American housing market collapse, know that the U. Securities and Exchange Commission was entirely asleep at the switch in regulating the markets at that time.