About Contract Assignments

What is a contract assignment?

A contract assignment occurs when a buyer transfers the contract to buy property to someone else before the completion date. The buyer can transfer the contract for any price, even for a higher price than they paid for the property.

Are contract assignments legal?

Yes. Real estate contracts are assignable under the law unless the contract expressly forbids it.Section 36 of the Law and Equity Act provides that the seller’s consent to the assignment is not required, provided that notice in writing of the assignment is given to the seller.

Why has the government issued requirements relating to contract assignments?

The requirements that came into force in 2016 are designed to prevent situations in which a buyer purchases a property, only to reassign the contract at a higher price before the closing date, without the seller’s knowledge.

The Regulation requires that standards terms be included by default in any offer to purchase real estate, unless the client instructs otherwise. These requirements are intended to protect sellers’ interests.

What are the requirements for licensees relating to assignments?

A licensee preparing a proposed contract for the purchase and sale of real estate (an “offer”) must include the following terms (the “Standard Assignment Terms”) unless otherwise instructed in writing by the person to whom they are providing trading services:

this contract must not be assigned without the written consent of the seller; and

the seller is entitled to any profit resulting from an assignment of the contract by the buyer or any subsequent assignee.

The British Columbia Real Estate Association has developed a revised version of the standard Contract of Purchase of Sale that includes the Standard Assignment Terms. The Contract of Purchase and Sale is available on WEBForms.

Licensees must take certain steps if they are involved in a potential real estate transaction where an offer to be presented to the seller does not include the Standard Assignment Terms. See the questions below for details on those steps.

What constitutes “profit” for the purpose of the Regulation?

The Regulation does not address the meaning of “profit.” If you are acting for a buyer or seller who has any questions or concerns about the “profit” arising from an assignment, you should advise your client to seek independent legal advice before consenting to the assignment.

The Regulation does not address how or when a “profit” is to be paid to the seller, so these issues may be resolved

“This Invitation for New Clients and is not meant as a Solicitation for Clients already Working with a Realtor, as required by our “Realtor Code of Ethics” I will only work with clients as an Exclusive Buyer’s Agent.”

Yes. Real estate contracts are assignable under the law unless the contract expressly forbids it. Section 36of the Law and Equity Act provides that the seller’s consent to the assignment is not required, provided that notice in writing of the assignment is given to the seller.

Why has the government issued requirements relating to contract assignments?

The requirements that came into force in 2016 are designed to prevent situations in which a buyer purchases a property, only to reassign the contract at a higher price before the closing date, without the seller’s knowledge.

The Regulation requires that standards terms be included by default in any offer to purchase real estate, unless the client instructs otherwise. These requirements are intended to protect sellers’ interests.

What are the requirements for licensees relating to assignments?

A licensee preparing a proposed contract for the purchase and sale of real estate (an “offer”) must include the following terms (the “Standard Assignment Terms”) unless otherwise instructed in writing by the person to whom they are providing trading services:

As of June 15, 2018 the Rules of Disclosure in British Columbia have changed… We as Realtors are now required to provide you with a number of Options for Agency before we discuss any information or provide any advice regarding Real Estate starting with “ Disclosure of Risks to Unrepresented Parties”Unrepresented in a Real Estate Transaction? Know the Risks. SEE the New Rules in the New Disclosure Document Section.