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While we certainly cannot guarantee the elimination of all problems, our experience minimizes our clients’ risk and exposure.
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.
We also recommend that our clients include an increase in the initial deposit following waiver of contingencies and/or the release of the initial deposit upon the buyer’s waiver of contingencies.
Having provided over three decades of legal advice and counsel to our clients, the lawyers at Narvid Scott are well – versed in avoiding potential pitfalls for the unwary.
Furthermore, even if a legal judgment is obtained against the purchasing assignee entity, it is often worthless because the purchaser has no assets.
Why Legal Advice Should be Sought Regarding the Buyer’s Right to Assign the Purchase Agreement Anticipating that this issue may occur, we draft assignment provisions in the purchase agreement prior to signing that require two things.Call the arrangement a shady real estate practice or insider trading, such contract assignments have been occurring for some time in Vancouver — with full knowledge of both the Real Estate Board of Greater Vancouver and the Real Estate Council of B. (They also happen regularly in Toronto.)Yet, it took only a matter of days, after a newspaper article about the practice, for the Real Estate Council to strike an advisory group to scrutinize the practice as “an urgent matter”, and for B.C.’s Communities Minister Peter Fassbender to declare that the government would take “very seriously” any recommendations.Remember: Before executing your next purchase agreement (whether as a buyer or purchaser) or better yet, before you even negotiate the Letter of Intent, I would be happy to review your transaction and provide effective and efficient advice and counsel. Maybe they are scrolling across your Facebook or Instagram feed.Other Benefits of Properly Drafting an Assignment Provision Proper drafting of the assignment provision also can avoid an even worse scenario: one in which a defaulting assignee buyer files a lis pendens on the property.In such a case the seller could be faced with tremendous legal expenses required to remove the lis pendens – none of which will be recoverable from the newly – formed shell assignee buyer, which has no assets.If anyone imagined that the Real Estate Board of Greater Vancouver was unaware of these contract assignments taking place, they had only to read the board’s website last autumn, which featured an article titled Protecting Yourself in an Assignment Agreement. rights (embedded in a Contract of Purchase and Sale) to someone else unless the contract states otherwise.This type of transaction is known as an assignment agreement.“In simple terms, someone can buy the right to step into the original buyer’s shoes to complete the contract.”The article counsels people to work with realtors on such arrangements and says the original seller should be made aware of the process, as well as ensure that “every individual involved in the transaction has been verified.”The real estate council’s Professional Standards Manual notes that the seller’s consent for a contract assignment is, in fact, not required by law — as long as written notice of the assignment is provided to him or her.Just as it was even after being tipped off about Manhattan investment mogul Bernie Madoff operating a Ponzi scheme.Regulatory bodies too often become captive to the interests of those they regulate.