ASSIGNABLE OFFERS TO PURCHASE

30 Second Primer for Real Estate Professionals

ASSIGNABLE OFFERS TO PURCHASE

Often, buyers may wish to assign the rights under an Offer to Purchase to a relative or corporation.

For Manitoba transactions, it is preferable to insert a clause at Article 15 of the standard Offer to Purchase to accomplish this – it is not recommended to do so as part of the description of the “Buyer” itself.

To describe the Buyer as “Joseph and Jane Smith or corporate nominee” , for example, could lead to the entire contract being void for uncertainty, as the contracting party is not properly identified. Consequently, this practice is strongly discouraged.

The better way of allowing for the assignment of an offer to purchase is to insert an appropriate clause under Article 15 – OTHER TERMS. We have provided some examples below:

                  The Buyer shall be entitled to assign his rights and responsibilities under this Agreement to a wholly-owned corporation on the strict understanding that the Buyer remains liable to the Sellers for the performance of his responsibilities hereunder.

                   Buyers may assign this Agreement to their son, Jonathan Smith, but shall remain liable hereunder.

A variant of the lengthier clause is suggested in that it offers greater clarity, but the shorter version may be preferred for reasons of brevity or style.

An important and necessary consequence of inserting the clause in the body of the Offer is that the Buyer remains liable under the contract if the assignee breaches a term. The Buyer should be made aware of this by his/her Realtor. We suggest, therefore, that you always affirm this fact in the wording of the clause itself- as we have in the examples above. Doing so not only re-assures the Seller, but also protects the Buyer’s Realtor.

As always, we encourage Realtors to contact us should have you have any questions about the specific wording of a clause.

 

       Neil color                                                                                                                                                                      Neil Sullivan (204) 396-9206       

                                                                   SULLIVAN McMULLAN is a Winnipeg-based law firm with a focus on Real Estate Law.

                                                                         We are committed to the highest levels of service to our clients and offer a wide array of resources to Realtors and mortgage brokers to assist in delivering peak service.

The above information is intended for educational purposes only. As every transaction may have unique legal considerations, the above is not intended as legal advice in any specific transaction.                                                                                                                                                                                                                                                                               © copyright Sullivan McMullan 2015