Assignment question???

[levmills 0]

I am meeting Sellers open to a Lease Option. Is it best to have the Seller sign the option agreement first before finding the TBs? On the form it mentions the option consideration and I don't know what it is until I secure the Tenant Buyer. How do I fill out the form to secure my position and bring in the Tenant Buyer?

 

Thanks,

 

Lev

[MichaelC 160]

Lev, I'm assuming you are doing a Cooperative Assignment? If so, there are three agreements needed. The CA Residential Lease and the Option to Purchase Agreement, both between you and the homeowner. The third agreement is the CA Assignment Agreement. This requires the signatures of all parties: homeowner, you, and the t/b.

On the Option agreement between you and the homeowner, where it asks for the amount of option money being paid, this is what you are paying the homeowner as consideration, typically a buck or five. So that would be filled in at the time you are putting the paperwork together.

The option consideration being paid to you by the t/b is noted on the CA Assignment Agreement and so you can't complete that until you know the exact amount.

[Propertymagnets 7]

Hey Michael,

 

I received the Manual on July 3rd and devoured it, July 4th & 5th. Thank you!

 

I have 3 T/B's lined up in 3 different States. In your reply to Lev, you stated using "The CA Residential Lease and the Option to Purchase Agreement, both between you and the homeowner." In the manual I notice an Agreement titled "Residential Lease WITH Option to Purchase Agreement". Your Agreement does not contain the word WITH!

 

Are these one and the same? Would I use this "Residential Lease WITH Option to Purchase Agreement" when gettting the property under conteact from the Seller?

[MichaelC 160]

Hi, Charles.

Two different agreements for two different types of lease options. The combo agreement, Residential Lease With Option to Purchase Agreement is between you and the homeowner when doing a sandwich lease.

The CA Residential Lease Agreement, along with the separate Option to Purchase Agreement is between you and the homeowner when doing a Cooperative Assignment.

[Propertymagnets 7]

Thank you for the clarification. Other questions. (1) Which Agreement do I use with the T/B to get the option consideration. (2) does the Homeowner know the amount of the Option Fee obtained from the T/B from the Option to Purchase Agreement

/

[MichaelC 160]

1) If you're referring to a CA, then you would use the CA Assignment Agreement to reference the option consideration the t/b is applying.

2) From the Option to Purchase Agreement, no, the homeowner doesn't know the amount of option consideration being paid by the t/b. That amount shows up on the CA Assignment Agreement.

[baron14 1]

Hi,

 

I'm trying to get clear up and get a handle on the CA.

 

After you sign all the required docs with the Seller, you then find the T/B, collect your assignment fee and sign the assignment agreement.

 

So do you then destroy the original docs (lease and option to purchase) with you and the Seller and then have new docs (lease and option to purchase) signed with the Seller and the T/B, so that your name is out of the loop?

 

Also, when all three parties sign the assignment agreement, the Seller will know how much profit you made from seeing the assignment fee on the assignment agreement?

 

Thanks,

baron

[MichaelC 160]

 

After you sign all the required docs with the Seller, you then find the T/B, collect your assignment fee and sign the assignment agreement.

So far, so good.

 

 

So do you then destroy the original docs (lease and option to purchase) with you and the Seller and then have new docs (lease and option to purchase) signed with the Seller and the T/B, so that your name is out of the loop?

Definitely not. The lease and option agreement between you and the homeowner are the very agreements you are assigning. If you destroy them you have nothing to assign. The homeowner keeps one set, as do you, and you give a set to the t/b you assigned the deal to. The Assignment Agreement is what puts you "out of the loop" as you said. You have sold or assigned your interest in the deal to a third party.

 

 

Also, when all three parties sign the assignment agreement, the Seller will know how much profit you made from seeing the assignment fee on the assignment agreement?

Yes, all three parties sign the assignment agreement and receive a copy. The homeowner will know what you've earned. So what? He accepted the terms of the deal back when, and you delivered as promised. The homeowner has nothing to squawk about, and they usually don't. On the occasion that one does, the assignment fee is paid directly to you via cashiers check. Be polite, say thank you, and move on.

[baron14 1]

I see what you are saying now. Even though the Assignment Agreement would wipe out the deal with the Seller and me (after all three parties sign), the Seller and the T/B would both be left holding docs with my name and the Seller's name on it. -Thanks.

[MichaelC 160]

Yes, the lease and option agreements have your name on it, (or your entity's name), but the assignment agreement completes the paper trail and makes it clear that you are no longer a part of the deal.