No Assignment Clause

About the author : Dave Dinkel

There are two ways to overcome a No Assignment Clause.


The first assumption to this question is that the language in the Purchase and Sale Contract specifically states there is a “No Assignment” clause.

I mention this because most Realtor contracts have three options – May Not Assign, May Assign, or May Assign with Liability.

If this is the case, and the contract doesn’t specifically require one of the options to be chosen, by not checking any option you have an assignable contract.

This may sound incredible, but it’s true, and we have used it for years; because of this disparity in contract law, in the past year, many Realtors’ contracts have added a short clause that says “if no options are checked”, it is assumed the contract is NOT assignable.

1. The most common way to avoid the assignment clause is to use an LLC as a buyer and just prior to the closing sell the Membership Interest to your end buyer.

This transaction is a simple “Bill of Sale” transaction and doesn’t require a further closing by an attorney or closing agent to get title insurance.

Your title insurance stays valid as it was issued to you for the LLC.

Depending on the state the property is in, you may have to pay transfer taxes, but the buyer would have to anyway.

2. You can also use your end buyer funds to close what would have been an A-B leg and give him a Quitclaim Deed at closing – this is more common than you might think.

This does cause some issues with the chain-of-title being “disrupted” in some attorneys’ minds, but a title policy was issued which should not change until the property is sold and when a new title policy will be issued.


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About the author : Dave Dinkel