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Mr. Feichthaler:
We entered into a contract to sell our home to a neighbor. He prepared the contract and we signed it, a sale for $400,000, with a $5,000 escrow deposit. He also chose the law firm handling the closing and title work. The firm just wrote to us saying the contract has been assigned to a new buyer, and that we would be selling to someone else. Should we be concerned?
-- Leanne P.
Dear Leanne:
In our seemingly ever-increasing real estate market, we are seeing more assignments. First, take a look at the contract. The standard contract generally provides that the buyer can assign the contract, but not be released from liability. That means another buyer is expected to make the purchase, but if they fall through, the original buyer is still on the hook to perform, including the potential of forfeiting the $5,000 escrow deposit to you. If the contract is not assignable, then it can only be assigned with your approval.
Generally speaking, so long as the sale is completed and you receive your funds, assignments should not matter. It is likely the new buyer paid the old buyer money for the assignment, but the amount will have no bearing on your contract. Whatever you bargained for on the sale is still in effect. I would require the firm or buyer to provide a copy of the assignment for your records.
When the closing documents arrive for signature, just confirm you are receiving all funds you contracted to receive. You should finish the transaction in the same position you would have with the original buyer — $400,000 minus any legitimate costs of the transaction.
Eric P. Feichthaler has lived in Cape Coral for over 35 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, Cape Coral Museum of History, and Cape Coral Kiwanis. He has been married to his wife, Mary, for over 20 years, and they have four children together. He earned his board certification in Real Estate Law from the Florida Bar. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator. He can be reached at eric@capecoralattorney .com, or 239-542-4733.
This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.