Assigning a Florida real estate purchase contract allows an investor to transfer contractual rights to another buyer without first purchasing the property.
The strategy is commonly used by residential wholesalers. The investor—called the assignor—contracts to purchase from the seller and then assigns the purchase contract to an assignee. The assignee completes the purchase directly from the original seller.
Although this may appear simpler than a double closing, a valid assignment requires more than writing “and/or assigns” beside the buyer’s name. The original contract, assignment agreement, seller communications, earnest-money deposit and marketing activities must work together.
Investor takeaway: An assignment transfers contractual rights. It does not automatically transfer title, release the original buyer or cure defects in the underlying purchase contract.
How a Florida Contract Assignment Works
An assignment normally involves three parties and two agreements:
| Party | Position | Principal obligation |
|---|---|---|
| Seller | Owner under the purchase contract | Convey the property according to the original contract |
| Assignor | Original contract buyer | Transfer contractual rights and satisfy any continuing obligations |
| Assignee | Replacement closing buyer | Accept the assigned rights and perform the buyer’s remaining obligations |
Assignment transaction flow
| Step | Document or event | Legal effect |
|---|---|---|
| 1 | Seller and investor execute purchase contract | Investor obtains contractual purchase rights |
| 2 | Investor conducts due diligence | Investor determines whether the contract and transaction remain viable |
| 3 | Investor and end buyer execute assignment | End buyer receives the investor’s assignable contract rights |
| 4 | Assignment fee and deposit are handled | Payment depends on the assignment’s terms |
| 5 | Assignee closes with seller | Seller conveys title directly to the assignee |
| 6 | Assignment fee is disbursed | Investor receives compensation as shown in the closing documents |
The investor ordinarily does not become the property owner. What the investor transfers is the investor’s contractual interest in the pending purchase.
Are Florida Real Estate Contracts Assignable?
Florida’s general rule favors assignability unless:
- The contract prohibits or restricts assignment;
- Assignment would violate a statute or public policy;
- The seller materially relied on the original buyer’s personal identity, credit or performance; or
- The assignment would materially alter the seller’s rights or risks.
In Kitsos v. Stanford, 291 So. 2d 632 (Fla. 3d DCA 1974), the court explained that contracts are generally assignable unless assignment is contractually forbidden, violates law or public policy, or involves reliance on the purchaser’s personal credit.
The transaction in Kitsos required cash payment and contained no assignment prohibition. The court concluded that none of the recognized grounds for nonassignability existed.
That rule is important, but it does not make every Florida purchase contract freely assignable. Investors must begin with the language of the specific agreement.
Contract Language Controls the Assignment
Freely assignable language
Language such as “buyer and/or assigns” may reinforce the buyer’s ability to assign. It does not, however, correct unrelated defects or eliminate other contract restrictions.
Assignment only with seller consent
A contract may require the seller’s prior written approval. Assigning without that approval can create a default or render the attempted transfer ineffective against the seller.
Consent should identify:
- The original buyer;
- The proposed assignee;
- The affected purchase contract;
- Whether the seller releases the original buyer; and
- Whether other terms remain unchanged.
Assignment permitted, but original buyer remains liable
Many contracts distinguish between transferring rights and obtaining a release. The assignee may receive the right to purchase while the original buyer remains responsible if the assignee fails to perform.
Assignment prohibited
Some agreements expressly prohibit assignment. Attempting to avoid that language by using an undisclosed entity, nominee or last-minute amendment may create breach, misrepresentation and closing risks.
Assignment Is Not the Same as a Novation
An assignment and a novation should not be treated as synonyms.
| Issue | Assignment | Novation |
|---|---|---|
| Transfers buyer’s contractual rights | Yes | Yes, as part of party substitution |
| Requires seller consent | Depends on the contract | Yes |
| Automatically releases original buyer | Usually no | Intended to do so |
| Replaces the original buyer | Not necessarily | Yes |
| Creates a new contractual arrangement | Usually no | Yes |
With an assignment, the assignor may remain liable under the original contract. A novation substitutes a new party and releases the outgoing party through an agreement accepted by all necessary parties.
What Should the Assignment Agreement Address?
An assignment agreement should do more than identify an assignment fee. It should address the entire transfer.
Essential terms
A properly drafted agreement commonly identifies:
- Seller and property;
- Date of the original purchase contract;
- Assignor and assignee;
- Rights and obligations being transferred;
- Assignment price or fee;
- Deposits already paid;
- Additional assignee deposit;
- Payment timing;
- Due-diligence rights, if any;
- Assignee’s proof of funds;
- Closing date;
- Default remedies;
- Representations concerning the underlying contract;
- Access to inspections and contract documents;
- Attorney-fee provisions; and
- Electronic-signature and counterpart provisions.
The original contract and all riders, addenda, disclosures and amendments should be attached or clearly incorporated.
Assignment fee structure
| Fee structure | Investor concern |
|---|---|
| Paid when assignment is signed | Refund and escrow terms must be explicit |
| Held in escrow until closing | Agreement should identify the escrow agent and release conditions |
| Paid only at closing | Investor bears the risk that the transaction never closes |
| Part paid immediately and part at closing | Each payment should have separate refund and default language |
An investor should never assume that a fee is automatically nonrefundable merely because the agreement labels it an “assignment fee.”
Who Receives the Original Earnest-Money Deposit?
The assignment agreement should address the investor’s original deposit.
Possible structures include:
- The assignee reimburses the assignor for the original deposit;
- The original deposit remains credited under the purchase contract;
- The assignee delivers an additional deposit;
- Part of the assignment consideration is held in escrow; or
- Reimbursement occurs only at closing.
The closing agent must be given the original contract, assignment agreement and accurate payment instructions.
If a Florida real estate broker holds the deposit, Chapter 475 and the Florida Real Estate Commission’s escrow rules may apply. A private investor should not casually accept or hold another party’s funds without determining whether an attorney, title company or licensed broker should serve as escrow agent.
Assignment Does Not Repair the Original Contract
The assignee normally receives only the rights the assignor possesses. If the underlying purchase contract is expired, terminated, defective or already in default, an assignment does not automatically revive it.
Before accepting an assignment, the assignee should verify:
- The purchase contract was fully executed;
- All required deposits were timely delivered;
- No cancellation notice was issued;
- Inspection and financing periods have not created an undisclosed problem;
- The investor has not already defaulted;
- Seller consent was obtained if required;
- Addenda and disclosures are complete;
- The closing date remains achievable; and
- Title can be conveyed as required.
Practical rule: A valuable assignment begins with an enforceable underlying contract.
The Unlicensed-Brokerage Risk
Florida distinguishes between selling one’s own property or contractual interest and performing brokerage services for another person.
Under section 475.01, Florida Statutes, brokerage activity includes negotiating or assisting in the purchase or sale of another person’s real property for compensation.
F.S. 475.011(2), contains an exemption for an individual or entity selling, exchanging or leasing its own real property, subject to statutory limitations. The statute does not provide a blanket exemption for someone who is actually arranging a transaction for another person while expecting compensation.
The legal risk increases when an investor:
- Markets the seller’s property rather than the investor’s contractual interest;
- Claims to own property when the investor does not hold title;
- Negotiates between seller and end buyer as an intermediary;
- Seeks compensation for procuring a buyer for the seller;
- Never intends or lacks the ability to perform the purchase contract;
- Controls the seller’s price or negotiations for a fee; or
- Advertises services that resemble brokerage services.
Marketing should accurately state what is being offered. The investor should avoid language suggesting ownership of the real property when the investor holds only contract rights.
Licensed investors must also consider Florida Administrative Code Rule 61J2-10.025, which governs real estate advertising by licensees.
Can the Seller Object to the Assignment Fee?
A large assignment profit does not, by itself, determine whether the assignment is enforceable. The controlling questions ordinarily include:
- Did the original contract permit assignment?
- Did the investor accurately describe the transaction?
- Did the investor conceal a fact the contract required to be disclosed?
- Was seller consent required?
- Did the investor perform the original buyer’s obligations?
- Did the parties engage in fraud, unlicensed brokerage or another unlawful practice?
Nevertheless, a seller who discovers a substantial fee may attempt to terminate, refuse access, challenge the investor’s authority or raise misrepresentation arguments. Clear contract language and accurate communications reduce that risk.
Assignment Versus Double Closing
| Consideration | Assignment | Double closing |
|---|---|---|
| Investor takes title | No | Yes |
| Number of deeds | One | Two |
| Separate acquisition funding | Usually unnecessary | Usually required |
| Assignment fee visible | Commonly yes | Resale spread generally appears in separate transactions |
| Closing expenses | Generally lower | Generally higher |
| Seller restrictions | Assignment clause controls | Investor must perform A–B |
| Investor becomes seller | No | Yes, in B–C |
Read Article 2, Florida Double Closings and Transactional Funding before choosing a double closing solely to conceal an assignment fee.
Florida Assignment Checklist
Before signing or marketing an assignment, confirm:
- The original contract is enforceable.
- Assignment is permitted.
- Seller consent is not required—or has been obtained.
- The investor remains capable of performing if no assignee is found.
- All deposits were timely delivered.
- The assignment identifies every incorporated contract document.
- The assignee has proof of funds.
- Payment and refund terms are unambiguous.
- The closing agent accepts the structure.
- Marketing describes the contractual interest accurately.
- The agreement allocates default and attorney-fee exposure.
- No activity crosses into unlicensed brokerage.
Have the Assignment Reviewed Before Marketing the Deal
Assignment problems are easiest to correct before the investor circulates the opportunity, accepts money or reaches the closing table.
Attorney Shah provides flat-fee legal services for Florida residential investors, including:
- Purchase-contract review;
- Assignment agreements;
- Seller-consent documents;
- Novations;
- Double closings;
- Transactional-funding review;
- Entity and vesting issues;
- Seller financing; and
- Investor closing representation.
Call Attorney Shah today at 754-888-2726 for a free consultation and before assigning your Florida real estate contract.
This article provides general Florida legal information and does not create an attorney-client relationship. Assignability, licensing, disclosure and liability depend on the particular documents and facts.