Dallas-Fort Worth Real Estate Investor Club

Assignment Contracts???

  • 01 Jun 2010 3:30 PM
    Message # 352448
    Deleted user
    Are assignment contract legal in Texas?
  • 01 Jun 2010 6:39 PM
    Reply # 352546 on 352448
    Deleted user

    This was copied from texasrealestate.com:

    As a general rule, Texas views all contracts as assignable, just as all property is transferable. But there are a few limitations. Here are some points to be aware of.

    • Contracts providing extension of credit, such as owner-financed transactions, cannot be assigned because the seller is depending on a particular buyer’s creditworthiness. Likewise, contracts that depend on character, skill and confidence cannot be assigned.
    • Any contract may be made assignable by its terms. An owner-financed sales contract, which is otherwise nonassignable, can be assigned if the language in the agreement so states.
    • Contracts can be made nonassignable by their terms too. Language in a contract that forbids assignments is strictly enforced. An attempt to assign the contract renders the assignment void, the underlying contract terminates and the person attempting the assignment forfeits all rights in the contract.
    • Financing options may be limited. The Department of Housing and Urban Development issued a ruling limiting, to some degree, the financing of flipped property. If the seller of a single-family residence purchased the house within the past 90 days, the buyer is usually ineligible for Federal Housing Administration (FHA) financing.

    If you are worried about assignments then just get an option to purchase.  Once you find a buyer you collect a fee to release your option.

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