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In Florida, the closing process normally begins with a written sales contract where a seller commits to sell his or her home and a buyer commits to buying the property. That document creates an equitable interest in the property for the buyer.

What some buyers and sellers may not realize is that after the parties sign the contract, the parties can change (most standard residential contracts for the sale and purchase of Florida real estate contain a provision related to the buyer’s right to assign the contract). Under Florida law, the buyer can legally transfer his or her rights in the pending sale to an independent third party.

Which means, the deal may go through with a buyer who is different from the one who signed the contract (the assignment provision in most standard contracts also contemplate whether or not the original buyer will be released from any liability under the contract).



Florida Condos Are Still a Popular Real Estate Purchase


Purchasers, Executors, Heirs and Assigns

For many years, it has been generally accepted in Florida law that a land sale contract can be assigned. Sometimes, this is easily determined because either the section for assignment is checked or the language of the contract identifies the buyer as the “purchaser and/or assigns” when describing the person who is buying the property. Either one of these options places a seller on notice that he or she may be seeing a different face at the closing table.

Other language that may be used in the sales contract: “heirs, executors, or assigns.” This language is also notice to the seller that the buyer may opt to assign the deal before it closes. (See – Shirley v. Lake Butler Corp., 123 So. 2d 267  – These words, heirs, executors, or assigns, do not require the seller to approve the assignment in order to make the assignment effective.)

When Can’t a Sales Contract Be Assigned by the Buyer?

The key here is that the sales contract is not personal to the buyer under its terms or by its nature; if it is, then there can be no assignment by the purchaser.

As explained by the Florida Supreme Court, real estate buyers will be allowed to assign (sell) their contracts to someone else whenever they choose to do so — unless (1) there is language in the contract that prohibits it in that particular deal; (2) if the assignment would violate public policy in some way; or (3) if it would violate some state or federal law or statute.

One other possible limitation on assigning a real estate sales contract (assuming the contract is silent on the issue of it being assignable): it may not be assigned if the seller has agreed to sell to this particular buyer because of an explicit reliance upon that buyer’s personal credit to cover the transaction. Walton Land & Timber Co. v. Long, 135 Fla. 843, 185 So. 839 (1939).

What Are the Assignee’s Duties?

If the buyer enters into an assignment with a third party, the deal to sell the property as described in the original sales contract does not change. The buyer is subject to a legally enforceable agreement when he or she signs the sales contract to buy that home or condo.

If the buyer wants to transfer the contract to an assignee, that first contract is not changed insofar as the rights and duties of the original parties (unless the seller agrees, in writing, to allow the buyer to be released from liability).  The assignee needs to make sure that all the duties required by the buyer under the sales contract are performed in order to close the deal.

The assignee takes on the legal responsibility of tendering to the seller the purchase price at the time stated in the sales contract. He or she will need to perform as the buyer would have been required to perform under the agreement.

If the assignee doesn’t fulfill his or her duties, then the seller can argue that the sales contract has been breached (thereby allowing the seller to retain the buyers deposits and seek any other remedies set forth in the contract).

As long as the seller is ready, willing and able to provide the deed to the original buyer, the seller should win this argument.

What Are the Assignee’s Rights?

Once there is a legally binding assignment in place, the assignee has rights under the sales contract. However, the terms of the deal do not change just because there is an assignee involved now.

The assignee does not have any more rights than the buyer had at the get-go. The buyer cannot transfer something to the assignee that he or she didn’t have!

Furthermore, the assignee will be subject to the rights of the seller in the original sales contract. If the seller expects something to be done by the buyer in the contract, then the seller can legally expect that the assignee will perform that task.

If the seller has defenses against the buyer under the sales agreement, then those defenses will be able to be asserted against the assignee, too.

Bottom line, if a buyer and a third party decide to enter into their own agreement where the buyer assigns his interest in a pending sales contract to buy a home or condo in Florida to the third party, great. But that assignee will not stand in a more favorable legal position than the buyer just because he’s a third party who’s come into the deal under an assignment.

Note: that third party will also get the right to end the deal, if the buyer had a legal right to do so. As the assignee, if the buyer has a right to seek recession of that sales contract, then the third party assignee will as well. For instance, if the seller cannot provide clear legal title, then the assignee has a right to rescind the deal just as the original buyer could have done.

What Are the Seller’s Duties After the Buyer’s Assignment?

When a buyer assigns his rights to a third party, what does the seller have to do? Well, the seller is not usually a party to the assignment (unless the contract requires the seller to approve the assignment). The assignment is an agreement usually between the buyer (the ”assignor”) and a third party (the ”assignee”).

Accordingly, the seller has no responsibility to determine who the assignee is in order to close the deal. All the seller has to do is meet the terms of the sales agreement. It’s up to the buyer and his or her assignee to work out the details of getting to the closing table at the time and date set forth in the sales contract. See, Pierce & Stevenson v. Jones, 109 Fla. 517, 147 So. 842, 88 A.L.R. 192 (1933).

Buyer Needs to Make Sure There’s an Effective Assignment

For some buyers who enter into an assignment the seller may allow the buyer to be free of the obligations set forth in the sales contract. If not, the buyer will remain responsible under the real estate contract to fulfill the obligations that he or she agreed upon at the time the contract was first signed.

Any release of the buyer’s obligations by the seller has to be specifically stated and in writing.

For example, if a buyer signs a real estate purchase agreement and inserts language that he or she will be taking title to the property in the name of his or her wholly owned corporation, that’s not creating any kind of assignment from the buyer to the corporation. That’s creating a condition in the sales contract, but it’s not an assignment by the buyer to a third party (it doesn’t relieve the buyer from liability under the contract).

The buyer needs to have something in writing stating that the seller is relieving the buyer of his or her obligations under the sales contract and the buyer’s wholly-owned corporation will be liable in order for there to be an effective release of liability of the buyer. See, Greater New York Corp. v. Cenvill Miami Beach Corp., 620 So. 2d 1068 (Fla. 3d DCA 1993).

Having a Florida Real Estate Lawyer Can Help Your Residential Closing

Whether you are a seller, a buyer, or an assignee in a deal to sell a Florida home or condo, things can get complicated very fast and parties can end up confused and upset. Closings can be delayed. Some may never happen.

Having the advice of an experienced Florida real estate lawyer can be of great help here. Moreover, having an attorney review the situation before the deal is finalized at closing isn’t as expensive as some assume it to be.

See: 19 Reasons to Hire a Real Estate Lawyer When Buying or Selling Florida Real Estate

A good piece of advice if you are faced with an assignment issue, is to at least speak with an experienced Florida real estate lawyer to learn about your rights. Most real estate lawyers, like Larry Tolchinsky, offer a free initial consultation (over the phone or in person, whichever you prefer) to answer your questions.


Picture of Larry TolchinskyDo you have questions or comments? Then please feel free to send Larry an email or call him now at (954) 458-8655.
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