Our team of specialist property solicitors are experienced in assignments and have been involved in many assignment transactions with clients in the UK and overseas, including Hong Kong, Malaysia and China.
Simply put, an assignment is the transfer of a contract to purchase a pre-construction property, where the contract has already been exchanged.
The seller is selling their contract before they have taken possession of the property.
The seller is not selling the property, but their contract and their promise to purchase the property, along with the rights and obligations of their agreement of purchase and sale contract.
The Seller (who was the original purchaser) is known as the Assignor; the new Buyer is the Assignee. The Assignee is the one who will complete the final sale with the developer.
As an original purchaser, you can only assign your contract if there is a clause in your contract that permits you to do so. Often these clauses require the developer’s consent and a fee to be paid (if you are an original purchaser looking to assign your contract).
Points to note regarding Assignment Purchases:
- The Assignee/Buyer is not buying from the Assignor, the Assignee is buying the right to acquire the property from the developer.
- The Assignor assigns their interest and rights in the original agreement with the developer.
- The Assignor assigns to the Assignee its interest in the original deposit.
- Assignee agrees to perform all of the Assignor’s obligations under the original agreement.
Once the property is physically ready, the ownership will be transferred to the buyer.
Do assignments only happen with pre-construction properties?
No, it is possible to assign any type of property, pre-construction or resale, provided there aren’t restrictions against it in the original contract. An assignment allows a buyer of any kind of home to sell their interest in that property before they take possession of it.
How much does it cost to assign a property?
It is likely that the developer will have assignment fees to be paid, along with your estate agent fees (unless you find the buyer yourself) and legal fees. Assignment transactions are more complicated than a standard sale and purchase, so the legal fees are likely to be higher. Please contact us on 01483 451900 for a quote.
Can you negotiate on an assignment?
As the Assignee is taking over the original contract, they cannot renegotiate the price or terms of the contract with the developer. They are simply taking over the contract as it already exists.
If you have any queries regarding assignments, please contact our residential property lawyers, based in Guildford, on 01483 451900 or alternatively make an online enquiry here and we will contact you.