In the wake of a recent flurry of media coverage related to assignments, positive changes have been made so that real estate consumers now have a tool to help them decide whether they want their contracts to be assignable.
As of May 16, 2016, the BC government requires that contracts prepared by real estate licensees include clauses stating that the contract cannot be assigned without the written consent of the seller, and that any profit from an assignment goes to the initial seller. Clients can instruct licensees to omit or change the clauses.
To help consumers and REALTORS® with the transition, BCREA has added the following paragraph to the residential and commercial Contracts of Purchase and Sale:
The Seller and the Buyer agree that this Contract: (a) must not be assigned without the written consent of the Seller; and (b) the Seller is entitled to any profit resulting from an assignment of the Contract by the Buyer or any subsequent assignee.
"Assignment" is the practice of someone assigning their rights in a contract to someone else before the transaction completes. In simple terms, someone can buy the right to step into the original buyer's shoes to complete the contract. Assigning one's right to a contract is a legitimate practice, allowed by common law and also by section 36 of the Law and Equity Act.
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