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assignments basic law

Assignments: The Basic Law

The assignment of a right or obligation is a common contractual event under the law and the right to assign (or prohibition against assignments) is found in the majority of agreements, leases and business structural documents created in the United States.

As with many terms commonly used, people are familiar with the term but often are not aware or fully aware of what the terms entail. The concept of assignment of rights and obligations is one of those simple concepts with wide ranging ramifications in the contractual and business context and the law imposes severe restrictions on the validity and effect of assignment in many instances. Clear contractual provisions concerning assignments and rights should be in every document and structure created and this article will outline why such drafting is essential for the creation of appropriate and effective contracts and structures.

The reader should first read the article on Limited Liability Entities in the United States and Contracts since the information in those articles will be assumed in this article.

Basic Definitions and Concepts:

An assignment is the transfer of rights held by one party called the “assignor” to another party called the “assignee.” The legal nature of the assignment and the contractual terms of the agreement between the parties determines some additional rights and liabilities that accompany the assignment. The assignment of rights under a contract usually completely transfers the rights to the assignee to receive the benefits accruing under the contract. Ordinarily, the term assignment is limited to the transfer of rights that are intangible, like contractual rights and rights connected with property. Merchants Service Co. v. Small Claims Court , 35 Cal. 2d 109, 113-114 (Cal. 1950).

An assignment will generally be permitted under the law unless there is an express prohibition against assignment in the underlying contract or lease. Where assignments are permitted, the assignor need not consult the other party to the contract but may merely assign the rights at that time. However, an assignment cannot have any adverse effect on the duties of the other party to the contract, nor can it diminish the chance of the other party receiving complete performance. The assignor normally remains liable unless there is an agreement to the contrary by the other party to the contract.

The effect of a valid assignment is to remove privity between the assignor and the obligor and create privity between the obligor and the assignee. Privity is usually defined as a direct and immediate contractual relationship. See Merchants case above.

Further, for the assignment to be effective in most jurisdictions, it must occur in the present. One does not normally assign a future right; the assignment vests immediate rights and obligations.

No specific language is required to create an assignment so long as the assignor makes clear his/her intent to assign identified contractual rights to the assignee. Since expensive litigation can erupt from ambiguous or vague language, obtaining the correct verbiage is vital. An agreement must manifest the intent to transfer rights and can either be oral or in writing and the rights assigned must be certain.

Note that an assignment of an interest is the transfer of some identifiable property, claim, or right from the assignor to the assignee. The assignment operates to transfer to the assignee all of the rights, title, or interest of the assignor in the thing assigned. A transfer of all rights, title, and interests conveys everything that the assignor owned in the thing assigned and the assignee stands in the shoes of the assignor. Knott v. McDonald’s Corp ., 985 F. Supp. 1222 (N.D. Cal. 1997)

The parties must intend to effectuate an assignment at the time of the transfer, although no particular language or procedure is necessary. As long ago as the case of National Reserve Co. v. Metropolitan Trust Co ., 17 Cal. 2d 827 (Cal. 1941), the court held that in determining what rights or interests pass under an assignment, the intention of the parties as manifested in the instrument is controlling.

The intent of the parties to an assignment is a question of fact to be derived not only from the instrument executed by the parties but also from the surrounding circumstances. When there is no writing to evidence the intention to transfer some identifiable property, claim, or right, it is necessary to scrutinize the surrounding circumstances and parties’ acts to ascertain their intentions. Strosberg v. Brauvin Realty Servs., 295 Ill. App. 3d 17 (Ill. App. Ct. 1st Dist. 1998)

The general rule applicable to assignments of choses in action is that an assignment, unless there is a contract to the contrary, carries with it all securities held by the assignor as collateral to the claim and all rights incidental thereto and vests in the assignee the equitable title to such collateral securities and incidental rights. An unqualified assignment of a contract or chose in action, however, with no indication of the intent of the parties, vests in the assignee the assigned contract or chose and all rights and remedies incidental thereto.

More examples: In Strosberg v. Brauvin Realty Servs ., 295 Ill. App. 3d 17 (Ill. App. Ct. 1st Dist. 1998), the court held that the assignee of a party to a subordination agreement is entitled to the benefits and is subject to the burdens of the agreement. In Florida E. C. R. Co. v. Eno , 99 Fla. 887 (Fla. 1930), the court held that the mere assignment of all sums due in and of itself creates no different or other liability of the owner to the assignee than that which existed from the owner to the assignor.

And note that even though an assignment vests in the assignee all rights, remedies, and contingent benefits which are incidental to the thing assigned, those which are personal to the assignor and for his sole benefit are not assigned. Rasp v. Hidden Valley Lake, Inc ., 519 N.E.2d 153, 158 (Ind. Ct. App. 1988). Thus, if the underlying agreement provides that a service can only be provided to X, X cannot assign that right to Y.

Novation Compared to Assignment:

Although the difference between a novation and an assignment may appear narrow, it is an essential one. “Novation is a act whereby one party transfers all its obligations and benefits under a contract to a third party.” In a novation, a third party successfully substitutes the original party as a party to the contract. “When a contract is novated, the other contracting party must be left in the same position he was in prior to the novation being made.”

A sublease is the transfer when a tenant retains some right of reentry onto the leased premises. However, if the tenant transfers the entire leasehold estate, retaining no right of reentry or other reversionary interest, then the transfer is an assignment. The assignor is normally also removed from liability to the landlord only if the landlord consents or allowed that right in the lease. In a sublease, the original tenant is not released from the obligations of the original lease.

Equitable Assignments:

An equitable assignment is one in which one has a future interest and is not valid at law but valid in a court of equity. In National Bank of Republic v. United Sec. Life Ins. & Trust Co. , 17 App. D.C. 112 (D.C. Cir. 1900), the court held that to constitute an equitable assignment of a chose in action, the following has to occur generally: anything said written or done, in pursuance of an agreement and for valuable consideration, or in consideration of an antecedent debt, to place a chose in action or fund out of the control of the owner, and appropriate it to or in favor of another person, amounts to an equitable assignment. Thus, an agreement, between a debtor and a creditor, that the debt shall be paid out of a specific fund going to the debtor may operate as an equitable assignment.

In Egyptian Navigation Co. v. Baker Invs. Corp. , 2008 U.S. Dist. LEXIS 30804 (S.D.N.Y. Apr. 14, 2008), the court stated that an equitable assignment occurs under English law when an assignor, with an intent to transfer his/her right to a chose in action, informs the assignee about the right so transferred.

An executory agreement or a declaration of trust are also equitable assignments if unenforceable as assignments by a court of law but enforceable by a court of equity exercising sound discretion according to the circumstances of the case. Since California combines courts of equity and courts of law, the same court would hear arguments as to whether an equitable assignment had occurred. Quite often, such relief is granted to avoid fraud or unjust enrichment.

Note that obtaining an assignment through fraudulent means invalidates the assignment. Fraud destroys the validity of everything into which it enters. It vitiates the most solemn contracts, documents, and even judgments. Walker v. Rich , 79 Cal. App. 139 (Cal. App. 1926). If an assignment is made with the fraudulent intent to delay, hinder, and defraud creditors, then it is void as fraudulent in fact. See our article on Transfers to Defraud Creditors .

But note that the motives that prompted an assignor to make the transfer will be considered as immaterial and will constitute no defense to an action by the assignee, if an assignment is considered as valid in all other respects.

Enforceability of Assignments:

Whether a right under a contract is capable of being transferred is determined by the law of the place where the contract was entered into. The validity and effect of an assignment is determined by the law of the place of assignment. The validity of an assignment of a contractual right is governed by the law of the state with the most significant relationship to the assignment and the parties.

In some jurisdictions, the traditional conflict of laws rules governing assignments has been rejected and the law of the place having the most significant contacts with the assignment applies. In Downs v. American Mut. Liability Ins. Co ., 14 N.Y.2d 266 (N.Y. 1964), a wife and her husband separated and the wife obtained a judgment of separation from the husband in New York. The judgment required the husband to pay a certain yearly sum to the wife. The husband assigned 50 percent of his future salary, wages, and earnings to the wife. The agreement authorized the employer to make such payments to the wife.

After the husband moved from New York, the wife learned that he was employed by an employer in Massachusetts. She sent the proper notice and demanded payment under the agreement. The employer refused and the wife brought an action for enforcement. The court observed that Massachusetts did not prohibit assignment of the husband’s wages. Moreover, Massachusetts law was not controlling because New York had the most significant relationship with the assignment. Therefore, the court ruled in favor of the wife.

Therefore, the validity of an assignment is determined by looking to the law of the forum with the most significant relationship to the assignment itself. To determine the applicable law of assignments, the court must look to the law of the state which is most significantly related to the principal issue before it.

Assignment of Contractual Rights:

Generally, the law allows the assignment of a contractual right unless the substitution of rights would materially change the duty of the obligor, materially increase the burden or risk imposed on the obligor by the contract, materially impair the chance of obtaining return performance, or materially reduce the value of the performance to the obligor. Restat 2d of Contracts, § 317(2)(a). This presumes that the underlying agreement is silent on the right to assign.

If the contract specifically precludes assignment, the contractual right is not assignable. Whether a contract is assignable is a matter of contractual intent and one must look to the language used by the parties to discern that intent.

In the absence of an express provision to the contrary, the rights and duties under a bilateral executory contract that does not involve personal skill, trust, or confidence may be assigned without the consent of the other party. But note that an assignment is invalid if it would materially alter the other party’s duties and responsibilities. Once an assignment is effective, the assignee stands in the shoes of the assignor and assumes all of assignor’s rights. Hence, after a valid assignment, the assignor’s right to performance is extinguished, transferred to assignee, and the assignee possesses the same rights, benefits, and remedies assignor once possessed. Robert Lamb Hart Planners & Architects v. Evergreen, Ltd. , 787 F. Supp. 753 (S.D. Ohio 1992).

On the other hand, an assignee’s right against the obligor is subject to “all of the limitations of the assignor’s right, all defenses thereto, and all set-offs and counterclaims which would have been available against the assignor had there been no assignment, provided that these defenses and set-offs are based on facts existing at the time of the assignment.” See Robert Lamb , case, above.

The power of the contract to restrict assignment is broad. Usually, contractual provisions that restrict assignment of the contract without the consent of the obligor are valid and enforceable, even when there is statutory authorization for the assignment. The restriction of the power to assign is often ineffective unless the restriction is expressly and precisely stated. Anti-assignment clauses are effective only if they contain clear, unambiguous language of prohibition. Anti-assignment clauses protect only the obligor and do not affect the transaction between the assignee and assignor.

Usually, a prohibition against the assignment of a contract does not prevent an assignment of the right to receive payments due, unless circumstances indicate the contrary. Moreover, the contracting parties cannot, by a mere non-assignment provision, prevent the effectual alienation of the right to money which becomes due under the contract.

A contract provision prohibiting or restricting an assignment may be waived, or a party may so act as to be estopped from objecting to the assignment, such as by effectively ratifying the assignment. The power to void an assignment made in violation of an anti-assignment clause may be waived either before or after the assignment. See our article on Contracts.

Noncompete Clauses and Assignments:

Of critical import to most buyers of businesses is the ability to ensure that key employees of the business being purchased cannot start a competing company. Some states strictly limit such clauses, some do allow them. California does restrict noncompete clauses, only allowing them under certain circumstances. A common question in those states that do allow them is whether such rights can be assigned to a new party, such as the buyer of the buyer.

A covenant not to compete, also called a non-competitive clause, is a formal agreement prohibiting one party from performing similar work or business within a designated area for a specified amount of time. This type of clause is generally included in contracts between employer and employee and contracts between buyer and seller of a business.

Many workers sign a covenant not to compete as part of the paperwork required for employment. It may be a separate document similar to a non-disclosure agreement, or buried within a number of other clauses in a contract. A covenant not to compete is generally legal and enforceable, although there are some exceptions and restrictions.

Whenever a company recruits skilled employees, it invests a significant amount of time and training. For example, it often takes years before a research chemist or a design engineer develops a workable knowledge of a company’s product line, including trade secrets and highly sensitive information. Once an employee gains this knowledge and experience, however, all sorts of things can happen. The employee could work for the company until retirement, accept a better offer from a competing company or start up his or her own business.

A covenant not to compete may cover a number of potential issues between employers and former employees. Many companies spend years developing a local base of customers or clients. It is important that this customer base not fall into the hands of local competitors. When an employee signs a covenant not to compete, he or she usually agrees not to use insider knowledge of the company’s customer base to disadvantage the company. The covenant not to compete often defines a broad geographical area considered off-limits to former employees, possibly tens or hundreds of miles.

Another area of concern covered by a covenant not to compete is a potential ‘brain drain’. Some high-level former employees may seek to recruit others from the same company to create new competition. Retention of employees, especially those with unique skills or proprietary knowledge, is vital for most companies, so a covenant not to compete may spell out definite restrictions on the hiring or recruiting of employees.

A covenant not to compete may also define a specific amount of time before a former employee can seek employment in a similar field. Many companies offer a substantial severance package to make sure former employees are financially solvent until the terms of the covenant not to compete have been met.

Because the use of a covenant not to compete can be controversial, a handful of states, including California, have largely banned this type of contractual language. The legal enforcement of these agreements falls on individual states, and many have sided with the employee during arbitration or litigation. A covenant not to compete must be reasonable and specific, with defined time periods and coverage areas. If the agreement gives the company too much power over former employees or is ambiguous, state courts may declare it to be overbroad and therefore unenforceable. In such case, the employee would be free to pursue any employment opportunity, including working for a direct competitor or starting up a new company of his or her own.

It has been held that an employee’s covenant not to compete is assignable where one business is transferred to another, that a merger does not constitute an assignment of a covenant not to compete, and that a covenant not to compete is enforceable by a successor to the employer where the assignment does not create an added burden of employment or other disadvantage to the employee. However, in some states such as Hawaii, it has also been held that a covenant not to compete is not assignable and under various statutes for various reasons that such covenants are not enforceable against an employee by a successor to the employer. Hawaii v. Gannett Pac. Corp. , 99 F. Supp. 2d 1241 (D. Haw. 1999)

It is vital to obtain the relevant law of the applicable state before drafting or attempting to enforce assignment rights in this particular area.

Conclusion:

In the current business world of fast changing structures, agreements, employees and projects, the ability to assign rights and obligations is essential to allow flexibility and adjustment to new situations. Conversely, the ability to hold a contracting party into the deal may be essential for the future of a party. Thus, the law of assignments and the restriction on same is a critical aspect of every agreement and every structure. This basic provision is often glanced at by the contracting parties, or scribbled into the deal at the last minute but can easily become the most vital part of the transaction.

As an example, one client of ours came into the office outraged that his co venturer on a sizable exporting agreement, who had excellent connections in Brazil, had elected to pursue another venture instead and assigned the agreement to a party unknown to our client and without the business contacts our client considered vital. When we examined the handwritten agreement our client had drafted in a restaurant in Sao Paolo, we discovered there was no restriction on assignment whatsoever…our client had not even considered that right when drafting the agreement after a full day of work.

One choses who one does business with carefully…to ensure that one’s choice remains the party on the other side of the contract, one must master the ability to negotiate proper assignment provisions.

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Assignment of Contract

Jump to section, what is an assignment of contract.

An assignment of contract is a legal term that describes the process that occurs when the original party (assignor) transfers their rights and obligations under their contract to a third party (assignee). When an assignment of contract happens, the original party is relieved of their contractual duties, and their role is replaced by the approved incoming party.

How Does Assignment of Contract Work?

An assignment of contract is simpler than you might think.

The process starts with an existing contract party who wishes to transfer their contractual obligations to a new party.

When this occurs, the existing contract party must first confirm that an assignment of contract is permissible under the legally binding agreement . Some contracts prohibit assignments of contract altogether, and some require the other parties of the agreement to agree to the transfer. However, the general rule is that contracts are freely assignable unless there is an explicit provision that says otherwise.

In other cases, some contracts allow an assignment of contract without any formal notification to other contract parties. If this is the case, once the existing contract party decides to reassign his duties, he must create a “Letter of Assignment ” to notify any other contract signers of the change.

The Letter of Assignment must include details about who is to take over the contractual obligations of the exiting party and when the transfer will take place. If the assignment is valid, the assignor is not required to obtain the consent or signature of the other parties to the original contract for the valid assignment to take place.

Check out this article to learn more about how assigning a contract works.

Contract Assignment Examples

Contract assignments are great tools for contract parties to use when they wish to transfer their commitments to a third party. Here are some examples of contract assignments to help you better understand them:

Anna signs a contract with a local trash company that entitles her to have her trash picked up twice a week. A year later, the trash company transferred her contract to a new trash service provider. This contract assignment effectively makes Anna’s contract now with the new service provider.

Hasina enters a contract with a national phone company for cell phone service. The company goes into bankruptcy and needs to close its doors but decides to transfer all current contracts to another provider who agrees to honor the same rates and level of service. The contract assignment is completed, and Hasina now has a contract with the new phone company as a result.

Here is an article where you can find out more about contract assignments.

Assignment of Contract in Real Estate

Assignment of contract is also used in real estate to make money without going the well-known routes of buying and flipping houses. When real estate LLC investors use an assignment of contract, they can make money off properties without ever actually buying them by instead opting to transfer real estate contracts .

This process is called real estate wholesaling.

Real Estate Wholesaling

Real estate wholesaling consists of locating deals on houses that you don’t plan to buy but instead plan to enter a contract to reassign the house to another buyer and pocket the profit.

The process is simple: real estate wholesalers negotiate purchase contracts with sellers. Then, they present these contracts to buyers who pay them an assignment fee for transferring the contract.

This process works because a real estate purchase agreement does not come with the obligation to buy a property. Instead, it sets forth certain purchasing parameters that must be fulfilled by the buyer of the property. In a nutshell, whoever signs the purchase contract has the right to buy the property, but those rights can usually be transferred by means of an assignment of contract.

This means that as long as the buyer who’s involved in the assignment of contract agrees with the purchasing terms, they can legally take over the contract.

But how do real estate wholesalers find these properties?

It is easier than you might think. Here are a few examples of ways that wholesalers find cheap houses to turn a profit on:

Direct mailers
Place newspaper ads
Make posts in online forums
Social media posts

The key to finding the perfect home for an assignment of contract is to locate sellers that are looking to get rid of their properties quickly. This might be a family who is looking to relocate for a job opportunity or someone who needs to make repairs on a home but can’t afford it. Either way, the quicker the wholesaler can close the deal, the better.

Once a property is located, wholesalers immediately go to work getting the details ironed out about how the sale will work. Transparency is key when it comes to wholesaling. This means that when a wholesaler intends to use an assignment of contract to transfer the rights to another person, they are always upfront about during the preliminary phases of the sale.

In addition to this practice just being good business, it makes sure the process goes as smoothly as possible later down the line. Wholesalers are clear in their intent and make sure buyers know that the contract could be transferred to another buyer before the closing date arrives.

After their offer is accepted and warranties are determined, wholesalers move to complete a title search . Title searches ensure that sellers have the right to enter into a purchase agreement on the property. They do this by searching for any outstanding tax payments, liens , or other roadblocks that could prevent the sale from going through.

Wholesalers also often work with experienced real estate lawyers who ensure that all of the legal paperwork is forthcoming and will stand up in court. Lawyers can also assist in the contract negotiation process if needed but often don’t come in until the final stages.

If the title search comes back clear and the real estate lawyer gives the green light, the wholesaler will immediately move to locate an entity to transfer the rights to buy.

One of the most attractive advantages of real estate wholesaling is that very little money is needed to get started. The process of finding a seller, negotiating a price, and performing a title search is an extremely cheap process that almost anyone can do.

On the other hand, it is not always a positive experience. It can be hard for wholesalers to find sellers who will agree to sell their homes for less than the market value. Even when they do, there is always a chance that the transferred buyer will back out of the sale, which leaves wholesalers obligated to either purchase the property themselves or scramble to find a new person to complete an assignment of contract with.

Learn more about assignment of contract in real estate by checking out this article .

Who Handles Assignment of Contract?

The best person to handle an assignment of contract is an attorney. Since these are detailed legal documents that deal with thousands of dollars, it is never a bad idea to have a professional on your side. If you need help with an assignment of contract or signing a business contract , post a project on ContractsCounsel. There, you can connect with attorneys who know everything there is to know about assignment of contract amendment and can walk you through the whole process.

ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.

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Assignments: why you need to serve a notice of assignment

It's the day of completion; security is taken, assignments are completed and funds move. Everyone breathes a sigh of relief. At this point, no-one wants to create unnecessary paperwork - not even the lawyers! Notices of assignment are, in some circumstances, optional. However, in other transactions they could be crucial to a lender's enforcement strategy. In the article below, we have given you the facts you need to consider when deciding whether or not you need to serve notice of assignment.

What issues are there with serving notice of assignment?

Assignments are useful tools for adding flexibility to banking transactions. They enable the transfer of one party's rights under a contract to a new party (for example, the right to receive an income stream or a debt) and allow security to be taken over intangible assets which might be unsuitable targets for a fixed charge. A lender's security net will often include assignments over contracts (such as insurance or material contracts), intellectual property rights, investments or receivables.

An assignment can be a legal assignment or an equitable assignment. If a legal assignment is required, the assignment must comply with a set of formalities set out in s136 of the Law of Property Act 1925, which include the requirement to give notice to the contract counterparty.

The main difference between legal and equitable assignments (other than the formalities required to create them) is that with a legal assignment, the assignee can usually bring an action against the contract counterparty in its own name following assignment. However, with an equitable assignment, the assignee will usually be required to join in proceedings with the assignor (unless the assignee has been granted specific powers to circumvent that). That may be problematic if the assignor is no longer available or interested in participating.

Why should we serve a notice of assignment?

The legal status of the assignment may affect the credit scoring that can be given to a particular class of assets. It may also affect a lender's ability to effect part of its exit strategy if that strategy requires the lender to be able to deal directly with the contract counterparty.

The case of General Nutrition Investment Company (GNIC) v Holland and Barrett International Ltd and another (H&B) provides an example of an equitable assignee being unable to deal directly with a contract counterparty as a result of a failure to provide a notice of assignment.

The case concerned the assignment of a trade mark licence to GNIC . The other party to the licence agreement was H&B. H&B had not received notice of the assignment. GNIC tried to terminate the licence agreement for breach by serving a notice of termination. H&B disputed the termination. By this point in time the original licensor had been dissolved and so was unable to assist.

At a hearing of preliminary issues, the High Court held that the notices of termination served by GNIC , as an equitable assignee, were invalid, because no notice of the assignment had been given to the licensee. Although only a High Court decision, this follows a Court of Appeal decision in the Warner Bros Records Inc v Rollgreen Ltd case, which was decided in the context of the attempt to exercise an option.

In both cases, an equitable assignee attempted to exercise a contractual right that would change the contractual relationship between the parties (i.e. by terminating the contractual relationship or exercising an option to extend the term of a licence). The judge in GNIC felt that "in each case, the counterparty (the recipient of the relevant notice) is entitled to see that the potential change in his contractual position is brought about by a person who is entitled, and whom he can see to be entitled, to bring about that change".

In a security context, this could hamper the ability of a lender to maximise the value of the secured assets but yet is a constraint that, in most transactions, could be easily avoided.

Why not serve notice?

Sometimes it's just not necessary or desirable. For example:

If security is being taken over a large number of low value receivables or contracts, the time and cost involved in giving notice may be disproportionate to the additional value gained by obtaining a legal rather than an equitable assignment.
If enforcement action were required, the equitable assignee typically has the option to join in the assignor to any proceedings (if it could not be waived by the court) and provision could be made in the assignment deed for the assignor to assist in such situations. Powers of attorney are also typically granted so that a lender can bring an action in the assignor's name.
Enforcement is often not considered to be a significant issue given that the vast majority of assignees will never need to bring claims against the contract counterparty.

Care should however, be taken in all circumstances where the underlying contract contains a ban on assignment, as the contract counterparty would not have to recognise an assignment that is made in contravention of that ban. Furthermore, that contravention in itself may trigger termination and/or other rights in the assigned contract, that could affect the value of any underlying security.

What about acknowledgements of notices?

A simple acknowledgement of service of notice is simply evidence of the notice having been received. However, these documents often contain commitments or assurances by the contract counterparty which increase their value to the assignee.

Best practice for serving notice of assignment

Each transaction is different and the weighting given to each element of the security package will depend upon the nature of the debt and the borrower's business. The service of a notice of assignment may be a necessity or an optional extra. In each case, the question of whether to serve notice is best considered with your advisers at the start of a transaction to allow time for the lender's priorities to be highlighted to the borrowers and captured within the documents.

For further advice on serving notice of assignment please contact Kirsty Barnes or Catherine Phillips from our Banking & Finance team.

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Assignments by way of security

Published by a lexisnexis banking & finance expert.

Assignments by way of security can take different forms and it is important to understand how they are created and their effect. Security over choses in action such as debts and other contractual rights is often taken by way of an equitable or statutory assignment by way of security.

This Practice Note explains:

what assignments by way of security are

which types of assets they are used for

whether they take legal, statutory or equitable form and the advantages of the statutory form

why it is important to serve notice of an assignment by way of security

What is an assignment by way of security?

Assignments by way of security are a type of mortgage. They involve:

an assignment (ie transfer) of rights by the Assignor to the assignee

subject to:

an obligation to reassign those rights back to the assignor upon the discharge of the obligations which have been secured

When the obligations that have been secured have been discharged,

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Related legal acts:

Law of Property Act 1925 (1925 c 20)
Small Business, Enterprise and Employment Act 2015 (2015 c 26)

Key definition:

Assignor definition, what does assignor mean.

The entity disposing of an asset by an assignment .

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Pledge vs Hypothecation vs Lien vs Mortgage vs Assignment

The difference between pledge, hypothecation, lien, mortgage, and assignment lies in the security charge that can be created on any asset held by a lender against the money lent (usually called the collateral). The type of asset charge defines whether the agreement can be classified as a pledge, lien, or mortgage. Let us see in detail the difference between pledge vs hypothecation vs lien vs mortgage vs assignment.

There are several types of security interests that can be adopted by banks or lenders depending upon the collateral involved and the circumstances. Different forms of creating charges on assets are as follows:

Hypothecation

Short summary table.

Pledge is commonly used for goods or securities such as gold, stocks, certificates, etc. The lender (pledgee) holds the actual possession of such securities until the borrower (pledger) has the borrowed amount with him. Once the borrowed amount has been returned, the securities are returned as well. If the pledger defaults on the loan amount, the pledgee can sell off the goods pledged to him as security in order to recover the principal and the interest amount. In this case risk of lending comparatively reduces because possession of assets is with the lender.

Hypothecation is usually when the charge is on movable assets rather than having a charge on fixed assets. However, hypothecation is different from pledges in the sense that the possession of such movable security stays with the borrower. Hence, in the event of default, the lender is first required to take possession / seize such property or asset in order to recover the principal and interest. An example of hypothecation is vehicle financing, where the lender has the asset that has been hypothecated against the loan with a bank. If the borrower defaults, the bank then takes possession of the vehicle after sufficient notice to recover the money.

Basis	Pledge	Hypothecation	Lien	Mortgage	Assignment
Collateral	Goods or securities such as gold, stocks, certificates, etc	Movable assets	Property or machinery	Immovable assets	Current assets or fixed assets
Examples	Gold, stocks, certificates, etc.	Vehicle financing	Rent receivable, unpaid fees, etc	House, land, building,	Life insurance policies, books of debts, receivables, etc.

Sanjay Bulaki Borad

MBA-Finance, CMA, CS, Insolvency Professional, B'Com

Sanjay Borad, Founder of eFinanceManagement, is a Management Consultant with 7 years of MNC experience and 11 years in Consultancy. He caters to clients with turnovers from 200 Million to 12,000 Million, including listed entities, and has vast industry experience in over 20 sectors. Additionally, he serves as a visiting faculty for Finance and Costing in MBA Colleges and CA, CMA Coaching Classes.

5 thoughts on “Pledge vs Hypothecation vs Lien vs Mortgage vs Assignment”

Really simple and so easy to refer .Especially good for nonfinance people who aims to move to general top management .

Thanks for sharing. I really like your explanations.

Tysm sir it helps me easily to understand n differentiate between all type of securities

Really great way illustration. It helped me a lot.

I love the concept; so very easy to understand.

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Out-law / your daily need-to-know.

Out-Law Guide 10 min. read

Security in finance transactions

30 Aug 2011, 4:34 pm

When a borrower is granted a loan from a bank, the bank will often want security for the loan it makes.

Taking effective security over an asset means that the bank can, on the insolvency of the borrower, take possession of that asset, sell it and use the proceeds to repay the loan. This puts the bank in a stronger position than creditors who do not have security. Depending on the circumstances, the bank has the option of taking security over specific assets of the company or over all the assets of the company. If the bank chooses to do the latter a debenture will be used to create fixed and floating charges over all the property and assets of the company.

Under English law there are several types of security interest which are favoured by banks. This Guide will look at what these involve, along with their advantages and disadvantages.

Under a mortgage, ownership of an asset is transferred (by way of security for the loan) on the express or implied condition that it will be returned when the loan is repaid. What distinguishes a mortgage from an outright sale with a right of repurchase is that the transfer is only intended to secure the repayment of the debt. Transferring ownership enhances the lender's ability to sell the asset and receive cash in return if necessary, and prevents the borrower from disposing of the asset. A mortgage does not require the delivery of possession and so any kind of asset whether tangible (such as houses, ships or planes) or intangible (such as copyrights or patents) is capable of being mortgaged.

A mortgage can be legal or equitable. Under a legal mortgage, legal ownership of the property is transferred to the lender. An equitable mortgage is usually created where either a transaction does not meet the formal requirements of a legal mortgage but is recognised in equity (for example, a mortgage over property which the mortgagor does not yet own – a legal mortgage can only be created over property which exists at the time); or where the mortgage concerns property only recognised in equity (for example, an interest in a trust fund – a legal mortgage cannot be taken over property which is only recognised in equity).

Legal mortgage: This is the most secure and comprehensive form of security interest. As we have seen, it transfers ownership to the bank (the mortgagee) and so prevents the borrower (the mortgagor) from dealing with the mortgaged asset whilst it is subject to the mortgage. The formalities required for creating a legal mortgage depend on the type of property being secured, but include:

the creation of a legal mortgage over land, which must be done by deed;
a legal mortgage over debts or choses in action - rights under contracts – which is created by an absolute assignment, in writing, by the assignor which is not intended to be by way of charge. Written notice of this assignment must be given to the debtor, trustee or other person from whom the assignor would have been entitled to claim the debt or choses in action;
legal mortgages over chattels – personal property – which do not generally require any formalities to make them effective providing that there is a valid agreement and the intention to create a legal mortgage;
a legal mortgage over registered securities which is created by transferring those securities into the name of the mortgagee by novation – in essence, a new contract. The mortgagee should be registered as the new holder of those securities;
a legal mortgage of registrable intellectual property rights, which is created by entry of the details of the mortgage into the relevant register.

A legal mortgage transfers ownership of the asset to the mortgagee so it cannot be sold to a third party without the mortgage being released and ownership being transferred back to the mortgagor. Alternatively the purchaser can agree to acquire the property subject to the existing mortgage, which is unusual.

Equitable mortgage: An equitable mortgage only transfers a beneficial interest in the asset to the mortgagee, with full legal ownership remaining with the mortgagor. In general, an equitable mortgage will arise where one of the following applies:

the formalities necessary to create a legal mortgage have not been complied with;
the mortgagor's interest in the asset being mortgaged is an equitable interest;
the parties have merely entered into an agreement to create a legal mortgage in the future over the asset in question, rather than formally creating such a mortgage;
the property to be mortgaged is recognised only in equity - for example, an interest in a trust fund.

Equitable mortgages and charges can be taken in a number of ways, some of which offer very little protection against third parties obtaining an interest in the charged asset and can make enforcement over the charged asset very difficult. It is preferable to take a legal mortgage or charge wherever possible.

The term 'charge' is often used as a generic term for all types of security interest, but specifically it represents an agreement between a creditor and a debtor in which a particular asset or class of assets can be used to satisfy a debt. A charge creates an encumbrance or interest which attaches to the asset and travels with it into the hands of any third parties. The only exception to this is a genuine, arms-length purchaser of the full legal ownership for value and without notice, who will acquire the asset free of the charge.

A charge does not involve the transfer of ownership or possession of an asset. For practical reasons most lenders will not want to take possession of the borrower's assets and nor will the borrower want to lose control of them, especially if those assets are used in the day-to-day running of the business. Accordingly a lender (chargee) will instead want to take security by obtaining rights over specific assets of the borrower (chargor) as security for the loan. The chargee then has a right to resort to that asset to repay the debt.

Charges can either be fixed or floating. The nature of a charge (whether fixed or floating) is particularly important if the borrower becomes insolvent. Under a fixed charge an asset which is ascertained and definite, or capable of being ascertained and defined, can be used to satisfy a debt immediately or once the lender acquires an interest in it.

A floating charge, on the other hand, hangs over a class of assets or future assets and acts as a deferred right to use those assets to satisfy a debt. Until an event occurs which causes the floating charge to fix to those assets, the borrower is free to dispose of and add to the assets in the ordinary course of its business. When the event occurs and the floating charge becomes fixed, it attaches to the assets that make up that class at that point.

It should be noted that the label attached to the charge is not conclusive in determining whether it will be regarded by a court as fixed or floating. To be confident that a court will regard a charge over assets as fixed, the lender must demonstrate that it has exercised control over the charged assets to the extent that the charge does not 'float' over the assets but is fixed to them. In practice, this means implementing clear restrictions on the ability of the borrower to deal with the assets and enforcing those restrictions.

Fixed charges

Fixed charges attach immediately to the charged asset, providing that the asset is or is capable of being ascertained and definite. They can be granted by anyone including companies, limited liability partnerships (LLPs), traditional partnerships and individuals.

The key characteristic of a fixed charge is that it gives the lender control over the charged asset. This control is crucial to the nature of a fixed charge - without sufficient control, the charge will be deemed to be floating. Typically, a document which creates a fixed charge will give the lender the right to:

prevent the borrower from disposing of, or otherwise dealing with, the asset without the lender's consent;
sell the asset if the borrower defaults under the loan;
require the borrower to maintain the value of the asset while it remains in the borrower's possession; and
claim the proceeds of the sale of the charged asset in priority to other creditors.

The charge document should ensure that the charged assets are identified as precisely as possible.

Fixed charges have a number of important advantages over floating charges:

a floating charge given by an insolvent company within the 12 months before the onset of insolvency (two years if the chargee is a 'connected person' with an interest in the chargor) is void except to the extent that the insolvent company has acquired new assets since the security was granted;
a floating charge ranks behind the rights of preferential creditors if the company goes into administration, receivership or liquidation, while a fixed charge takes priority over all unsecured claims, preferential or otherwise;
the sale of, or any encumbrance or burden created over, an asset which is subject to a floating charge will as a general rule take effect free from that charge, while a fixed charge can only be defeated if the asset is sold to a genuine, arm's length purchaser of the legal title of that asset for value without notice;
many foreign legal systems, particularly civil law jurisdictions such as those in Europe, do not recognise floating charges;
all floating charges given by a company need to be registered at Companies House, otherwise they cannot be forced against the liquidator, administrator or any creditor of the company. A fixed charge is only registrable if taken over a class of asset specifically listed in the Companies Act.

Floating charges

Floating charges, as the name suggests, hover above a shifting pool of assets. While fixed charges can be created by anyone, floating charges can only be created by companies, LLPs and, under the Agricultural Credits Act, farmers. Individuals cannot grant floating charges over their assets.

A floating charge has the following characteristics:

it is a charge on a class of assets, present and future, of a company;
that class is one which, in the ordinary course of the company's business, would change from time to time;
it is understood that, until some future step is taken by or on behalf of the chargee, the company may carry on its day to day business as far as it concerns that particular class of assets.

Unlike assets secured by a fixed charge, the assets secured by a floating charge are described in very general terms – for example, the borrower's 'trading stock' or its 'undertaking and assets'. This group of assets may fluctuate from time to time either through the borrower disposing of them in its ordinary course of business or by it acquiring further assets in that class after the floating charge was created. This flexibility is the great advantage of a floating charge, but the freedom to deal with assets presents the lender with the problem of how to stop the borrower from disposing of all of those assets. For this reason, lenders prefer to take fixed charges over specific assets where possible. Lenders do have limited ability to control floating charge assets in some circumstances – a floating asset will fasten onto the charged assets which are in existence when a certain event occurs, either by operation of law or by agreement of the parties, which fixes the charge. At that point, the floating charge stops hovering over the pool of assets and instead becomes fixed to those assets which exist at that time.

Despite the inherent weaknesses of a floating charge, it is usually important for a lender to take a floating charge wherever possible. A floating charge has three important advantages:

it allows the bank to take security without unduly restricting or affecting the borrower's ability to carry on its business, including the buying and selling of assets;
providing the charge is a 'qualifying floating charge' for the purposes of the Insolvency Act, the holder will be able to appoint an administrator without applying to court for an order;
it acts as a catch-all, sweeping up intangible assets which cannot be specifically charged or assets which the lender is unaware of.

Banks will usually get the best of both worlds by using a combination of fixed and floating charges in one document, known as a debenture. This document usually creates fixed charges over certain assets of the company – land, plant and machinery, goodwill, uncalled capital, intellectual property rights, book debts, non-trading account bank balances – and a floating charge over all the other assets. By using this combination a bank can obtain adequate security for its loan, safe in the knowledge that all the borrower's key assets apart from stock in trade are subject to fixed charges. At the same time the company is free to carry on its business in a relatively unhindered manner, and can sell its stock in trade in the ordinary course of business without having to obtain the bank's consent for every sale.

Assignment by way of security

A borrower's rights against third parties, such as the right to receive payment for debts on its own books, can be assigned to a third party as a way of selling those rights – this is an absolute, or direct, assignment. It is also possible to carry out an assignment by way of security over a borrower's choses in action – rights the borrower is entitled to under contracts – as security for that borrower's debts. As with any assignment, an assignment by way of security can be either legal or equitable. An assignment will be legal if it is:

in writing and executed by the borrower (the assignor);
absolute - that is, unconditional and for the whole amount; and
notified in writing to the person against whom the assignor could enforce those assigned rights, usually the debtor of the borrower company.

As a result, a legal assignment should be expressed as an absolute assignment with a provision that those rights will be reassigned once the relevant debt is satisfied. If, however, an assignment is made 'by way of charge' rather than by way of security then it will take effect in equity only.

A legal assignment can only assign debts which already exist. Only an equitable assignment can assign rights under future contracts.

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What is a notice of assignment?

An assignment takes place when one party is holding a right to property, claims, bills, lease, etc., of another party and wishes to pass it along (or sell it) to a third party. As complicated as that sounds, it really isn’t. Strangely enough, many assignments can be made under the law without immediately informing, or obtaining the permission, of the personal obligated to perform under the contract. An example of this is when your mortgage is sold to another mortgage company. The original mortgage company may not inform you for several weeks, and they certainly aren’t going to ask your permission to make the sale.

If a person obligated to perform has received notice of the assignment and still insists on paying the initial assignor, the person will still be obligated to pay the new assignee according to the agreement. If the obligated party has not yet been informed of the assignment and pays the original note holder (assignor), the assignor is obligated to turn those funds over to the new assignee. But, what are the remedies if this doesn’t take place? Actually, the new assignee may find themselves in a difficult position if the assignor simply takes off with their funds or payment. They are limited to taking action against the person they bought the note from (assignor) and cannot hold the obligator liable. Therefore, it is important to remember that if any note or obligation is assigned to another party, each party should be well aware of their responsibilities in the transaction and uphold them according to the laws of their state. Assignment forms should be well thought out and written in a manner which prevents the failure of one party against another.

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Assignment of Debt – What You Need to Know

By aqila zulaiqha zulkifli ~ 23 june 2023.

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Aqila Zulaiqha Zulkifli

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Occasionally, to ensure liquidity and to reduce financial risk, a creditor may assign its rights to a debt repayment to another party. Such an arrangement is known as the assignment of debt.

An assignment generally means the transfer of contractual rights and liabilities to a third party without the concurrence of the other party to the contract. [1] The assigning party is known as the assignor, whereas the recipient party is known as the assignee.

Once an assignment occurs, the assignee stands in the exact position as the assignor and has the legal right to a debt, other remedies therein, and even the power to discharge the debt. The debtor must then, make all payments to the assignee, and not the assignor. In fact, if the debtor pays the assignor without the consent of the assignee, the debtor may risk having to pay the assignee all over again. [2]

An assignment of debt is governed by Section 4(3) of the Civil Law Act 1956 (the “Act”) (cited with approval in the Federal Court case of UMW Industries Sdn Bhd v Ah Fook [3] , in which, the elements of a statutory assignment of debt can be summarized as follows:

the assignment must be in writing under the hand of the assignor (and not, i.e the agent of the assignor);
the assignment must be absolute and not by way of charge only; and
the express notice in writing must have been given to the person liable to the assignor (i.e the debtor).

The effect of a statutory assignment is that the assignee possesses the legal right to the debt and the right to sue the debtor in respect of the debt without needing to join the assignor. [4]

However, rest assured, an assignment that is not in compliance with Section 4(3) of the Act is not automatically invalid. A non-statutory assignment could still be valid in equity [5] , though the assignee would have to join the assignor in the proceeding, either as a plaintiff or defendant [6] . This is to ensure a just disposal of the action, by ensuring that all relevant parties are before the Court so that the assignor would not make a claim against the debtor in respect of the same debt.

As such, in conclusion, before accepting an assignment of debt, it is prudent for an assignee to ensure that the elements in Section 4(3) of the Act abovementioned are fulfilled. If the assignment is meant to be absolute, such terms should be clearly reflected in the deed of assignment, or the assignee runs the risk of being crippled in a legal proceeding to recover the debt in the absence of the assignor.

[1] United General Insurance Co Sdn Bhd v Progress Credit Sdn Bhd [1988] 2 MLJ 297

[2] malayawata steel berhad v government of malaysia & anor [1980] 2 mlj 103, [3] [1996] 1 mlj 365, [4] mbf factors sdn bhd v tay hing ju (t/a new general trading) [2002] 5 mlj 536, [5] khaw poh chhuan v ng gaik peng & ors [1996] 1 mlj 761 (fc), [6] chan min swee v melawangi sdn bhd [2000] 7 clj 1.

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Difference Between Assignment And Charge

INTRODUCTION

The charges are defined under the Companies Act and the government under the Section 77, [1] Section 78, Section 79, [2] Section 89 [3] and the rules 2014. The company has the right to borrow monies by providing the security to the assets and may create a lien on the properties. [4] The company also has the right to issue debentures so that the funds can be raised which can carry right interest in the assets are the properties of the company.

The security which is given to a person for securing the loans and debentures under the mortgage of assets is known as charge. A company has the right to borrow the security for its borrowing. [5] When they both existing and future property is agreed to be available as a security for the repayment of test then the creditors have the right to make it available as there is charge created. According to Section 2(16) of the Act, “charge means an interest or lien created on the property or assets of a company or any of its undertakings or both as security and includes a mortgage”. [6] In the case of Dublin City Distillery Co. v. Deherty , [7] It was stated that charge include any portable charger whether this can be created by an instrument in writing or by the deposit of the title deed. [8]

KINDS OF CHARGES

There are two types of charges-

1. FIXED CHARGE

Fixed charge is a type of charge which is created so that assets can be covered. It is a type of security which is there under the terms of certain specific property. [9] Fixed Charges is a charge fixed or specific when it is made specifically to cover assets which are ascertainable and definite at the time of creating the charge e.g., land, buildings, heavy machinery etc. [10]

2. FLOATING CHARGE

A floating charge is a charge which is totally different to the companies as a type of security. This type of charge is not attached to any definite property. A floating charge includes a charge which is on the class of assets which is present and future in the ordinary course of business and this changing from time to time. [11] “The essence of a floating charge is that the security remains dormant until it is fixed or crystallised”. [12] Floating charge is the present security. Floating charge can affect all the assets of the company. Floating Charge, on the other hand, is not attached to any definite property but covers property which is of a fluctuating nature such as stock in trade. [13] It is an equitable charge on the assets for the time being of a going concern. [14] It attaches to the subject charged in the varying condition in which it happens to be from time to time. It is of this sense of such a charge that it remains dormant until the undertaking charged ceases to be a going concern, or until the person in whose favour the charge is created intervenes. [15]

FORM OF CHARGES

As stated above the charges under the Companies Act or defined under Section 77 [16] , Section 78 [17] and Section 79-

The charges are divided into three categories

FORMS FOR FILING: CHG-1, CHG-4, CHG-6, CHG-8, CHG-9, CHG-10.
CERTIFICATES ISSUED BY ROC: CHG-2, CHG-3, CHG-5.
REGISTER TO BE MAINTAINED.

SATISFACTION OF CHARGE

Within 30 days of treatment satisfaction should be full of any charge which is registered and the company shall get intimation of the same in CHG-4 along with the fee then the ROC will issue of certificate of registration on the satisfaction of a charged under the form number CHG-5.

The principle of assignment is recognized under Indian law and is applied by Indian courts. It derives its origin from English law. The words assignment means the transfer of rights and obligations held by one party to another party. The system of assignment is favoured under the common law such as there is no expressed prohibition against assignment in a contract.

However in India with the absence of specific laws under the transfer of a contract intention of the party has to be taken into the account. In the case of Khared and Co. Ltd v Ramon and Co. Pvt. Ltd , [18] it was stated that “as a rule, obligations under a contract cannot be assigned except with the consent of the promisee. Where such consent is obtained, it will be considered as a deemed novation, resulting in the substitution of liabilities and obligations to the assignee”. Assignment rights are usually limited pertaining to the licence of intellectual property rights and Technology.

[1] Section 77 of Companies Act, 2013 Duty to register charges, etc. 1. It shall be the duty of every company creating a charge within or outside India, on its property or assets or any of its undertakings, whether tangible or otherwise, and situated in or outside India, to register the particulars of the charge signed by the company and the charge-holder together with the instruments, if any, creating such charge in such form, on payment of such fees and in such manner as may be prescribed, with the Registrar within thirty days of its creation: Provided that the Registrar may, on an application by the company, allow such registration to be made within a period of three hundred days of such creation on payment of such additional fees as may be prescribed: Provided further that if registration is not made within a period of three hundred days of such creation, the company shall seek extension of time in accordance with section 87: Provided also that any subsequent registration of a charge(………)

[2] The provisions of section 77 relating to registration of charges shall, so far as may be, apply to—

(a) a company acquiring any property subject to a charge within the meaning of that section; or

(b) any modification in the terms or conditions or the extent or operation of any charge registered under that section.

[3] Declaration in respect of beneficial interest in any share.

Where the name of a person is entered in the register of members of a company as the holder of shares in that company but who does not hold the beneficial interest in such shares, such person shall make a declaration within such time and in such form as may be prescribed to the company specifying the name and other particulars of the person who holds the beneficial interest in such shares.
Every person who holds or acquires a beneficial interest in share of a company shall make a declaration to the company specifying the nature of his interest, particulars of the person in whose name the shares stand(…..)

[4] Vishal Thakkar, “CHARGES” under The New Companies Act, 2013 (2015), https://www.linkedin.com/pulse/charges-under-new-companies-act-2013-vishal-thakkar (last visited Apr 19, 2017).

[5] Charges under companies act, 2013 , http://www.caclubindia.com/articles/charges-under-companies-act-2013-23073.asp (last visited Apr 9, 2017).

[6] Section 2(16) of Companies Act, 2013.

[7] Dublin City Distillery Co. v. Deherty, 1914 AC 823.

[9] Mr. M. Govindarajan, Provisions Relating to ‘Charges’ Under Companies Act, 2013 (2013), https://www.taxmanagementindia.com/visitor/detail_article.asp?ArticleID=5382 (last visited Apr 9, 2017).

[10] Admin, Creation of Charges under Companies Act, 2013 (2016), http://taxguru.in/company-law/creation-charges-companies-act-2013.html (last visited Apr 9, 2017).

[11] Creation of Charges under Companies Act, 2013, (2016), http://taxguru.in/company-law/creation-charges-companies-act-2013.html (last visited Apr 9, 2017).

[12] Supra note 6.

[13] “CHARGES” under The New Companies Act, 2013 (2015).

[14] Government Stock Investment Co. Ltd. V. Manila Rly. Co. Ltd., (1897) AC 81 Per Lord Macnaghten,

[15] Supra note 9.

[16] Supra note 1.

[17] Supra note 11.

[18] Khared and Co. Ltd v Ramon and Co. Pvt. Ltd, 1962 AIR 1810, 1963 SCR (3) 183 .

Charges when Selling or Buying Leasehold Property

When you buy, own or sell a Leasehold property, many of your rights and obligations will be set out in your lease. One of your obligations will be to make certain payments to the person or the organisation responsible for administering and managing your building. That person might be a landlord, a management company, or a managing agent instructed by the landlord or management company (referred to below as "the landlord"). The typed of payments or charges can be divided into three groups. They are:

Ground Rent

Your lease may provide for you to make regular payments of ground rent as well as service charges. Although the lease may initially oblige you to pay a fixed amount of ground rent, it may also contain a clause which allows the landlord to increase the rent in years to come. When buying a leasehold property you should always ask your conveyancer to explain if there are any rent review clauses in your lease and explain what this would mean to you in financial terms.

Service Charge

Service charges normally vary according to the amount that is spent by the landlord each year on the upkeep of the building as a whole, including for example, cleaning the communal areas, gardening, maintaining and renewing the structure of the building (including the roof), building insurance. Usually, the lease will oblige you to pay a fixed percentage or a "reasonable proportion" of that amount. You should ask your conveyancer how the service charge is calculated, what it covers and whether the landlord has any plans for expensive remedial works to be carried out to the building for which you will be responsible.

Administration Charges

The landlord is likely to make an administration charge if you ask for a service connected with the buying or selling of a leasehold property. The following are examples of these charges you may have to pay,

When you are selling

1. Sellers leasehold pack: When you are selling a leasehold property it will be your responsibility to pay the landlord's charge to provide a Sellers leasehold pack (usually in the form of a Form LPE1) to provide the leasehold information required by your buyer and their lender.

2. Licence to Assign: It is possible that your lease requires you to obtain a licence from the landlord to sell the property. This involves the landlord approving the buyer as a new owner of the property. You may have to pay both the landlord's and landlord's solicitors charges for consenting to the sale and providing the Licence.

3. Exit or Transfer Fee: A retirement flat lease may include an "exit" or "transfer fee" payable by you from the sale proceeds and expressed as a percentage of the property value.

When you are buying

1. Deed of Covenant: Some leases require a buyer to enter into a Deed with the landlord to confirm that you will be bound by the terms of the lease. The buyer has to pay this charge.

2. Notice of Assignment of Transfer and Charge: The landlord will require that a notice is sent to them notifying of the change of ownership and any mortgage lender. This is to ensure that the landlord has your contact details (these may be different from the address of the property you have purchased) for the purpose of sending you ground rent and service charge invoices, and details of works to be carried out to the building.

3. Certificate of Compliance: The landlord may be required to provide this to confirm to the Land Registry that the change of ownership requirements in the lease have been complied with.

4. Share or Membership Transfer Charge: If you are required to become a member of the Management Company then the landlord may make a charge to transfer the share or membership certificate into your name.

To ensure that you are aware of the above charges and procedures, when you are selling or buying leasehold property, you should ask your conveyancer to review the lease and property title at an early stage.

Hughes Paddison has an experienced residential property team who are able to advise on all aspects of leasehold conveyancing whether you are selling or buying. Please contact our residential property team, we will spend time discussing any queries you have concerning the leasehold property you are buying or selling, and provide you with a conveyancing quote.

The information contained on this page has been prepared for the purpose of this blog/article only. The content should not be regarded at any time as a substitute for taking legal advice.

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Security assignments - not always what they say they are?

The nature of security created under a security document does not always match its description in the document. Charlotte Drake explains how this recharacterisation risk can apply to security assignments.

Is an "absolute" security assignment legal or equitable?

Legal assignments – key requirements

Lenders commonly take security over "choses in action" (such as debts or rights under contracts) by way of assignment. An assignment involves the transfer of either legal ownership (legal assignment) or equitable ownership (equitable assignment).

Section 136 of the Law of Property Act 1925 dictates the formalities for taking a legal assignment. It requires that a legal assignment must (among other things):

be in writing;
be executed by the assignor;
be "absolute";
not be expressed to be "by way of charge" only; and
be notified in writing to the person against whom the assignor could enforce the assigned rights (the third party).

Legal assignments by way of security

There has been much case law on what "absolute" means. An assignment will not be absolute if it is conditional, or of part of a debt. However, a security assignment can qualify (provided it is not "by way of charge"): the fact the assignor has an equity of redemption under a security assignment does not of itself prevent the assignment from being "absolute". Security assignments sometimes use the term "absolute" to make clear they are intended to be legal assignments. However, the terminology used is not decisive. An assignment will not be "absolute" unless the third party can then deal with the assignee alone in respect of the assigned rights. The assignee owes an obligation to the assignor to reassign the rights on discharge of the secured liability. But the third party can continue to deal with the assignee until it receives notice of that reassignment.

In practice, this usually presents a considerable stumbling block to taking security by way of a legal assignment. Security assignments often allow the assignor to continue to deal with the third party, which commercially suits assignor, assignee and third party alike. However, such an assignment will not be "absolute" and so will take effect in equity only, even if the security document claims to effect a legal assignment.

The recent case of Ardila Investments NV v. ENRC NV and another 1 highlighted this. The judge accepted that the assignment clause in the document used "the words of a legal assignment". However, he pointed to other clauses in the assignment document which suggested the parties had intended it to take effect in equity rather than law. One of these clauses obliged the assignor to "pursue its rights" under the assigned contracts, which is clearly inconsistent with an absolute assignment.

Legal or equitable – does it matter?

Often not. A notified equitable assignment has as strong a priority against other interests in the assigned rights as a legal assignment.

One advantage of a legal assignment is that a legal assignee can sue the third party without the assignor's involvement. Received wisdom used to be that an equitable assignee could not sue alone and the assignor (as owner of the legal interest) must be joined in as party to proceedings (either as co-plaintiff if willing, or as co-defendant if not).

In Ardila the judge held that the assignment took effect in equity and that both assignor and assignee should join in the proceedings as co-claimants. As it happened, when the hearing took place, the assignor had been joined as co-claimant anyway. In other cases, an equitable assignee has been able to sue the third party alone. As a purely practical matter, even if the assignor does need to be joined into proceedings this is unlikely to be more than an inconvenience.

Could a security assignment be "floating" security?

Could there be another, more unpalatable, result of control remaining with the assignor following a security assignment? In Re Spectrum Plus 2 , the House of Lords of course held that a charge over a debt will be floating, not fixed, if the security holder fails to exercise control over the debt proceeds. Is a security assignment of a debt or similar contractual right also at risk of being recharacterised in this way? This is far from a settled point, but these obiter comments from Lord Scott in Re Spectrum Plus (at paragraph 107) suggest so:

" Suppose, for example, a case where an express assignment of a specific debt by way of security were accompanied by a provision that reserved to the assignor the right, terminable by written notice from the assignee, to collect the debt and to use the proceeds for its (the assignor's) business purposes, ie, a right, terminable on notice, for the assignor to withdraw the proceeds of the debt from the security. This security would, in my opinion, be a floating security notwithstanding the express assignment. "

There is some logic in this approach. If it were possible to "solve" Re Spectrum Plus by renaming all charges over debts as security assignments, the case would not have taken on the significance that it has. The risk of this type of recharacterisation is most obvious in a UK insolvency, where there is a clear distinction between the application of fixed and floating recoveries. In this context, at least, the "fixed/floating" distinction is likely to be more of a concern to a lender than whether its security assignment is "legal" rather than "equitable".

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2024 Elections

Kamala Harris Was Never Biden’s ‘Border Czar.’ Here’s What She Really Did

Vice President Kamala Harris at the National Palace in Guatemala City on June 7, 2021.

O n her first foreign trip as Vice President in June 2021, Kamala Harris was tasked with delivering a blunt message in Guatemala City. "I want to be clear to folks in this region who are thinking about making that dangerous trek to the United States-Mexico border: Do not come," she said at a press conference, pausing for effect. "Do not come."

Three years later, that sound bite may come to haunt Harris' nascent presidential campaign. Despite her warning, border crossings reached historic highs during the Biden Administration. Republican critics cast the episode as a symbol of Harris’s ineffective tenure as President Biden's "border czar," a misleading label they applied after she was charged with helming diplomatic efforts to address the root causes of migration from Central America to the U.S.

“Kamala had one job,” Nikki Haley told the crowd at the Republican National Convention in Milwaukee last week. “One job. And that was to fix the border. Now imagine her in charge of the entire country.”

Read More: How Trump Plans To Run Against Harris .

In fact, Harris was never put in charge of the border or immigration policy. Nor was she involved in overseeing law-enforcement efforts or guiding the federal response to the crisis . Her mandate was much narrower: to focus on examining and improving the underlying conditions in the Northern Triangle of Central America—El Salvador, Guatemala, and Honduras—which has been racked by decades of poverty, war, chronic violence, and political instability. The strategy relied on allocating billions for economic programs and stimulating private-sector investment in the region in hopes that these programs would ultimately lead fewer migrants to make the dangerous journey north.

It was the first high-profile assignment in Harris' tenure as Vice President, and it was an especially thankless one. At best, addressing the “push factors” that spur migration would lead to incremental improvements and take a generation to yield results. At worst, it would make Harris the face of the border crisis, one of the Biden administration's biggest political vulnerabilities. "To the extent that this was a useful assignment, she did reasonably well in getting the private sector to invest in Central America," says Muzaffar Chishti, a senior fellow at the nonpartisan Migration Policy Institute. "But it was an assignment that could not produce results anytime soon."

The so-called "root causes strategy" focused on improving economic and security conditions by creating jobs, combating corruption, improving human and labor rights, and reducing violence. Harris allocated funds for humanitarian relief from natural disasters, and directed more than 10 million COVID-19 vaccines to the Northern Triangle countries. She held bilateral meetings with the region's leaders, as well as meetings with NGOs, business executives and human rights advocates. She worked with the U.S. Justice Department to launch an Anti-Corruption task force focused on prosecuting corruption cases with ties to the region, as well as Anti-Migrant Smuggling task forces in Mexico and Guatemala.

Read More: A Guide to Kamala Harris's Views .

Most importantly, Harris spearheaded a public-private partnership that, as of March 2024, had secured commitments from major U.S. and multi-national companies to invest more than $5 billion in the region. The Vice President "put her name on the line with very serious senior CEOs and kind of created a brand appeal for Central America that didn't exist," says Ricardo Zúniga, who until recently served as the U.S. special envoy to Central America.

Harris also spent time in Washington communicating with regional leaders. One tangible result, according to two former U.S. officials, was that it gave the U.S. the standing and relationships to help prevent Guatemalan prosecutors from overturning the results of last year’s presidential election, which was won by anti-corruption outsider Bernardo Arévalo. While delayed, the ultimately peaceful transition of power avoided the political instability that Biden Administration officials feared could cause a spike in migration. The U.S. applied public pressure through sanctions and visa restrictions on officials they accused of undermining the democratic process, as well as behind the scenes. Harris's team was directly involved, especially her national security adviser Philip Gordon, who traveled to the region to push for a peaceful democratic transfer of power, according to the two former U.S. officials.

But the narrow mandate given to Harris ignored shifting migration patterns, experts say. The slow process of addressing the "push factors," or reasons that migrants leave their countries, says Chisthi, can't compete with the "pull factors"—the economic and safety incentives that draw people to the U.S. When Biden assumed office, officials thought Central America would continue to be the epicenter of migration pressure. "We were wrong," says Zuniga. After the initial surge, migration from the Northern Triangle largely stabilized. By December 2023, 54% of encounters at the southern border involved citizens of countries other than Mexico, Guatemala, El Salvador and Honduras, according to U.S. Customs and Border Protection data.

Vice President Kamala Harris tours the El Paso U.S. Customs and Border Protection Central Processing Center, on June 25, 2021.

Much of Harris’s work failed to break through back home. Instead, she became the target of Republican broadsides about the border crisis and was repeatedly criticized for not visiting the U.S.-Mexico border. "She's dealing with a narrative problem," says Zuniga. With immigration topping the list of Americans’ concerns, according to recent Gallup polls , an ongoing humanitarian crisis at the border, and political deadlock on immigration reform and funding, Harris emerged as the most visible scapegoat.

Read More: Who Could Be Kamala Harris' Running Mate?

As they shift their focus from Biden to Harris, it’s clear that Republicans plan to attack Harris’s role on immigration issues. "The border crisis is a Kamala Harris crisis,” former President Trump's running mate, Ohio Sen. JD Vance, declared at a July 22 rally. A recent National Republican Senatorial Committee memo outlining talking points calls her "the architect of [Biden's] biggest failure." In a post on Truth Social on July 23, Trump said her "incompetence gave us the WORST and MOST DANGEROUS Border anywhere in the World." Texas Gov. Greg Abbott, a Republican, said if Harris is elected, he will "need to triple the border wall, razor wire barriers and National Guard on the border.”

Harris has a broader record on immigration, including backing a bipartisan border-security deal aimed at reducing border crossings earlier this year. As a Senator, she was an outspoken advocate of legal protections for DACA recipients, made headlines for aggressively questioning Trump immigration officials, and derided the then-President's border wall as a "medieval vanity project.” But it’s clear the “border czar” label has become a political liability.

Some Harris allies have expressed frustration with Biden for putting her in this position. In doing so, he was repeating a familiar pattern—it was a portfolio Biden himself was given as Vice President. In 2014, when a surge in children and families from Central America overwhelmed the U.S. immigration system, then-President Barack Obama tasked him with leading the international response to the crisis. "The solution to this problem is to address the root causes of this immigration in the first place," Biden said on a trip to Guatemala City that summer. "Especially poverty, insecurity and the lack of the rule of law.”

Seven years later, little had changed when Harris gave the same speech, in the same place. Politically, "the problem is that no one cares about the root causes," says Chisthi. "It's too abstract. And frankly, very little can be done about them in the short run, while the public is focused on what is happening with the border today."

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Wikidiff.com Find the difference between words.

Charge vs Assignment - What's the difference?

As nouns the difference between charge and assignment, as a verb charge, as a proper noun chargé, derived terms, related terms, external links.

Breaking down Kamala Harris' role at the border during Biden administration

SAN DIEGO (KGTV) — Within months of taking office, President Joe Biden assigned his vice president, Kamala Harris, to effectively become a leading point person on the border, coordinate diplomatic relationships and address the "root causes" of migration into the United States. Now, the Trump campaign is framing that effort as a failure, even as Democrats tout success.

Team 10 senior investigator Jim Avila, a former White House correspondent, breaks down the issue.

"That's why I've asked the vice president of the United States yesterday to be the lead person on dealing with focusing on the fundamental reasons why people leave Honduras, Guatemala and El Salvador in the first place," said President Joe Biden in March 2021.

The assignment for Vice President Harris was to focus on what was happening south of the border in the countries from which migrants were coming. She was never actually named "Border Czar." That was a moniker coined by Republicans, and it stuck.

"I remember Vice President Harris was appointed the 'Border Czar.' Whatever happened to that?" said Sen. Steve Daines (R-Montana).

Vice President Harris traveled to Mexico and Guatemala in June 2021. In her remarks, she focused on economic instability, violence and corruption, telling migrants the border is not open.

"The goal of our work is to help Guatemalans find hope at home. At the same time, I want to be clear to folks in this region who are thinking about that dangerous trek to the United States-Mexico border: Do not come. Do not come," Harris said at the time.

Back home, Harris faced sharp criticism for not going to the border itself, and bristled when pressed in an NBC News interview.

"We've been to the border," Harris said.

"You haven't been to the border," NBC News anchor Lester Holt pressed.

"And I haven't been to Europe. I mean... I don't understand the point that you're making. I'm not discounting the importance of the border," Harris replied.

Just weeks later, Harris would visit the southern border, and again, she told migrants, "Do not come."

In El Paso, she toured Border Patrol facilities and met with groups that help migrants. Again, her focus was on what causes people to come in the first place. She largely left border security enforcement to Homeland Security Secretary Alejandro Mayorkas.

Over the next two years, the vice president secured more than $5 billion to address those root causes in Central America. Nearly a billion was targeted to the "Central America Forward" initiative, which developed the region's jobs and women's empowerment programs.

The Biden administration has deported or expelled nearly 4.5 million people, the highest for any single president since George W. Bush.

Harris has agreed with criticism that our immigration system is broken; she said in March, "We need to fix it." However, she points the blame at Senate Republicans , who were pushed by former President Donald Trump to kill a bipartisan border security deal .

Harris said that's because Trump would prefer to run on a problem rather than fix it.

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Watch CBS News

The facts about Kamala Harris' role on immigration in the Biden administration

By Camilo Montoya-Galvez

Updated on: July 23, 2024 / 11:48 AM EDT / CBS News

Following President Biden's decision to abandon his reelection campaign and endorse Vice President Kamala Harris to be the Democratic nominee for president, Harris' role on immigration has come under scrutiny.

Soon after Mr. Biden's announcement, Republicans sought to blame Harris for the Biden administration's woes at the U.S.-Mexico border, where American officials have reported record levels of illegal crossings in the past three years. In a phone conversation with CBS News on Saturday, former President Donald Trump said Harris presided over the "worst border ever" as "border czar," a title her Republican detractors often give her.

Harris is all but certain to face even more criticism over the Biden administration's record on immigration, one of American voters' top concerns ahead of the election. And Harris does have an immigration-related role in the Biden White House, but her responsibilities on the issue are often mischaracterized.

What exactly is Harris' immigration role?

In March 2021, when the Biden administration faced the early stages of an influx in illegal crossings at the U.S. southern border, Mr. Biden tasked Harris with leading the administration's diplomatic campaign to address the "root causes" of migration from Guatemala, Honduras and El Salvador, including poverty, corruption and violence.

The region, known as Central America's Northern Triangle, has been one of the main sources of migration to the U.S.-Mexico border over the past decade.

Vice President Kamala Harris speaks while Guatemalan President Alejandro Giammattei listens at the Palacio Nacional de la Cultura on on Monday, June 7, 2021.

Harris was not asked to be the administration's "border czar" or to oversee immigration policy and enforcement at the U.S.-Mexico border. That has mainly been the responsibility of Homeland Security Secretary Alejandro Mayorkas and his department, which oversees the country's main three immigration agencies, including Customs and Border Protection.

In reality, the only role close to that of a "border czar" under the Biden administration was held for only a few months by Roberta Jacobson, a longtime diplomat who served as coordinator for the Southwest border until April 2021.

In her immigration role, Harris' main line of work has focused on convincing companies to invest in Central America and promoting democracy and development there through diplomacy. In March of this year, the White House announced Harris had secured a commitment from the private sector to invest over $5 billion to promote economic opportunities and reduce violence in the region.

Efforts to reduce migration by improving conditions in migrants' home countries have always been viewed as a long-term strategy by U.S. officials. In its "root causes" framework , the Biden administration conceded the "systemic change" it envisions for Central America "will take time to achieve."

Questions about her work on immigration

There are some legitimate questions about Harris' work on immigration.

Before the COVID-19 pandemic, most non-Mexican migration to the U.S. southern border originated from the Northern Triangle. In 2021, it made sense for the administration to focus on the root cases of migration in those countries. But migration flows have changed dramatically in recent years. Record numbers of migrants have been coming from places outside of Central America, including from countries like Cuba, Colombia, China, Ecuador and Venezuela.

In fiscal year 2023, for example, Border Patrol apprehensions of migrants from Guatemala, Honduras and El Salvador made up 22% of all crossings during that time period, down from 41% in fiscal year 2021, government statistics show. On the flip side, however, the administration could point to the fact that illegal crossings along the U.S. southern border by migrants from Guatemala, Honduras and El Salvador have decreased significantly every year since 2021.

While most of her critics have been Republicans, Harris' work on immigration has also garnered some criticism from the left. During a visit to Guatemala in June 2021, Harris told those intending to migrate, "Do not come," a statement that drew ire from some progressives and advocates for migrants.

As the second-highest ranking member of the Biden administration, Harris will also likely face questions over the all-time levels of unlawful border crossings reported in 2021, 2022 and 2023. Those crossings, however, have plunged this year, reaching a three-year low in June , after Mr. Biden issued an executive order banning most migrants from asylum.

Camilo Montoya-Galvez is the immigration reporter at CBS News. Based in Washington, he covers immigration policy and politics.

More from CBS News

Poll analysis: Harris slightly ahead of Biden in hypothetical Trump matchup

Trump says he thinks Harris is "no better" than Biden in 2024 matchup

Some Republicans threaten lawsuits to keep Biden on ballot. Will they work?

A look at Kamala Harris' work on foreign policy as vice president

Kamala Harris and the border: The myth and the facts

No, Kamala Harris is not a “border czar.” But that doesn’t matter to Republicans.

by Christian Paz

Vice President Kamala Harris vists Guatemala For Talks on Economy and Migration

If Vice President Kamala Harris becomes the Democratic presidential nominee, Republicans have a ready-made case against her: They can say she was President Joe Biden’s “border czar,” in charge of immigration and the border, and she failed.

At least seven different speakers at the Republican National Convention over the last week have used that moniker to describe Harris, from the president of Goya Foods to anti-immigration activists to Sen. Tom Cotton of Arkansas and Rep. Matt Gaetz of Florida.

There’s just one problem. The vice president was never in charge of the border. That job belongs to Alejandro Mayorkas, the secretary of homeland security, and to Xavier Becerra, the secretary of health and human services.

Still, a combination of right-wing spin, media fascination during Harris’s early tenure, miscommunication from the White House, and growing migrant surges during the Biden presidency have all made that label stick. Now, it stands as one of the more serious challenges Harris faces, whether she’s the vice presidential or presidential nominee.

Where the “border czar” label began

Referring to Harris as the “border czar” isn’t new. Right-wing media, anti-immigrant activists, and Republican politicians have been using the label for the vice president for years .

It has its roots in March 2021, when Biden announced that he would be giving Harris essentially the same assignment he got during his own vice presidency: coordinating diplomatic relationships to address the “root causes” of migration into the United States.

“I’ve asked her, the VP, today — because she’s the most qualified person to do it — to lead our efforts with Mexico and the Northern Triangle and the countries that help — are going to need help in stemming the movement of so many folks, stemming the migration to our southern border,” Biden said during a White House meeting on migration on March 24, 2021.

The idea behind this approach is a long-term strategy: Border surges were just one symptom of deeper economic, diplomatic, and security problems these countries face that cause people to make the trek north. The assignment was a bit cursed from the start — a “politically treacherous job with little short-term payoff,” as it was described by the Los Angeles Times — because any benefits from addressing these root causes would obviously take time to appear. Meanwhile, the border saw more legal as well as illegal crossings every month.

Senior White House officials who briefed reporters before the announcement emphasized at the time that this was a diplomatic assignment : a two-pronged approach to build diplomatic ties with these countries and to oversee investment and implementation of foreign aid to these countries to address infrastructure, grow business, and strengthen civil society.

From the start, though, media coverage and the White House’s communication about the role were muddled. Headlines described Harris as the “ point person on immigration ” and “ placed in charge of migration crisis ,” while senior officials later said Harris would “oversee a whole-of-government approach” to dealing with migration.

The White House’s communications team spent much of that early time trying to clarify the assignment, but as migrant border crossings continued to rise, much of the press and the public’s attention became focused on why Harris and the administration were not more focused on addressing short-term problems.

Adding to the mess were Harris’s own missteps. She was widely criticized in the press for being defensive during her first international trips to Mexico and Guatemala in June 2021, and by immigrant rights activists for a speech in which she urged “folks in this region who are thinking about making that dangerous trek to the United States-Mexico border: Do not come. Do not come.” She also evaded questions about why neither she nor Biden had been to the southern border when she was talking about the border abroad, leading to criticism by Republicans.

Then came a widely derided interview with NBC News’ Lester Holt during that trip, in which she appeared to mock Holt’s question about why she hadn’t visited the southern border if she was working to try to stem the flow of migration north. “At some point, you know, we are going to the border,” Harris told Holt. “We’ve been to the border. So this whole thing about the border. We’ve been to the border. We’ve been to the border.”

When Holt pointed out that she hadn’t, she seemed to discount the question, replying that she hadn’t “been to Europe. And I mean, I don’t ... understand the point that you’re making. I’m not discounting the importance of the border.”

This was a significant moment in the context of Harris’s criticism: During this first year of the Biden-Harris term, Harris and her office were facing intense media scrutiny over the VP’s role, ability to communicate to the public, and her office’s internal strife . Questions swirled in the press about whether Harris was plugged into Biden’s inner circle, whether she had a discernible portfolio of assignments, and whether her team was equipped to help her perform her duties if they were at odds with the president’s staff or leaving her office entirely.

On top of all this, Harris got another doomed assignment: to lobby for voting-rights reforms in a tied Senate, where Biden and House Democrats’ legislative proposals could not pass a filibuster.

Border crossings would continue to surge over the next three years, further fueling criticism of Harris. As my colleague Nicole Narea has explained , the nature of these immigration surges began to change, too, making Harris’s “root causes” work even more difficult:

Under the Trump administration, most migrants arriving at the southern border were from Central America’s “Northern Triangle”: Guatemala, Honduras, and El Salvador. In the last few years, however, the number of migrants coming from those countries has been eclipsed by those coming from South America — particularly Venezuela, Colombia, and Nicaragua — and the Caribbean, including Haiti and Cuba. They have been driven out by recent compounding political and economic crises and natural disasters in their home countries.

Republicans and conservative commentators had a field day with all of this, picking on immigration as a key line of attack during the 2022 midterms. They introduced legislation tying Harris to the term “border czar,” introducing a “ Border Czar Accountability Act ” and resolutions calling on Harris to be stripped of the assignment. They spent hours on cable news and in Congress talking about the Guatemala trip and the Holt interview. They ran ads during the midterms about immigration, tying Biden and Harris to the border “crisis.” Ultimately, they managed to blur the line between the assignment Harris got and the worsening conditions at the southern border.

Why Republicans are zeroing in on this attack now

The Republican National Convention has now offered a preview of how this line of attack will be used against Harris as the general election nears.

Searches for the term have spiked recently, per Google Trends data , similarly to how they spiked when Harris was first given the root-causes assignment, before the 2022 midterm elections, and during previous moments of news coverage about the border.

Former presidential candidate Nikki Haley previewed on Tuesday night how Republicans plan to harness the confusion: “Kamala had one job. One job. And that was to fix the border,” she said. “Now imagine her in charge of the entire country.”

Other speakers this week have referenced “border czar Kamala Harris” being responsible for “encourag[ing] millions of illegals to invade America ... and put[ting] the welfare of illegals over their own citizens,” as the Ohio GOP Senate candidate Bernie Moreno put it.

Even the Trump campaign’s chief has acknowledged this is their best line of attack against the VP.

The White House and the Biden campaign, meanwhile, don’t seem to have a robust answer to these attacks, calling them “lies” and “smears” while pointing to the vice president’s diplomatic work over the last few years.

There’s been less media and White House attention paid to the actual assignment she was given, but the administration has routinely provided updates on the “ Root Causes Strategy .” She only visited Guatemala, Honduras, and Mexico once during the first year of the assignments, though she did hold virtual and in -person meetings with heads of state from the region. Still, it doesn’t seem as though Central America or Mexico has been an actual focus for the vice president, especially since the midterm elections and the overturning of Roe v. Wade.

A White House official pointed me to the visits and roundtables Harris has held on this assignment, citing $5.2 billion of investments Harris has announced in Honduras, Guatemala, and El Salvador to expand internet access and combat corruption. A Biden campaign official, meanwhile, pointed to the attempts the White House made in 2021 to clarify Harris’s assignment.

As I’ve written before, Republicans’ attacks on the Biden administration’s immigration efforts aren’t going to go away anytime soon. The American public’s mood on immigration and the border has soured dramatically in the last two years, and the specifics of Harris’s original assignment may not matter to voters who just want less immigration, period. As long as the public continues its anti-immigration tilt, it seems likely the “border czar” nickname will be here to stay.

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Vice President Kamala Harris standing at a lectern. A crowd is in the background.

By Jazmine Ulloa and Nicholas Nehamas

Reporting from Milwaukee and Washington

July 17, 2024

As Democrats tangle over the re-election prospects of President Biden, Republicans at their national convention this week have trained some of their most intense criticism on Vice President Kamala Harris.

They have tied her to an administration that they say has led to increases in crime and inflation. They have cast her an enabler of an aging and ineffective president. They have blamed her for record levels of migrant crossings at the border.

But perhaps no phrase has been deployed more than this one: “border czar.”

“Kamala Harris isn’t able to do any job. She was appointed border czar,” said Representative Matt Gaetz of Florida on Wednesday to a couple of snickers in the audience. “Appointing Kamala Harris to oversee the border is like appointing Bernie Madoff to oversee your retirement plan.”

But Ms. Harris was not, in fact, appointed border czar, nor was she tasked with addressing the broader problems plaguing the border itself, where minors have at times slept on the floors of overcrowded facilities for days beyond the legal limit . Rather she was deputized by President Biden with the diplomatic mission of solving the “root causes” of migration from countries like Guatemala, El Salvador and Honduras, tackling the issues that spur people to flee in the first place, like drug violence and lack of economic opportunity.

It was the same politically unsavory task that former President Barack Obama delegated to Mr. Biden when he served as Mr. Obama’s vice president. And it’s a task that has only become harder — and more politically polarized — since then, becoming perhaps the thorniest issue facing the Biden-Harris administration.

Brian Fallon, campaign spokesman for Ms. Harris, said former President Donald J. Trump and his party have “resorted to lying about the vice president’s record,” after Mr. Trump tanked a bipartisan border deal earlier this year.

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COMMENTS

What Is an Assignment of Contract?
Fact-Checked. An assignment of contract occurs when one party to an existing contract (the "assignor") hands off the contract's obligations and benefits to another party (the "assignee"). Ideally, the assignor wants the assignee to step into their shoes and assume all of their contractual obligations and rights.
Assignments: The Basic Law
Assignments: The Basic Law. The assignment of a right or obligation is a common contractual event under the law and the right to assign (or prohibition against assignments) is found in the majority of agreements, leases and business structural documents created in the United States. As with many terms commonly used, people are familiar with the ...
To assign or not to assign that's a real question
charge instead of an assignment for legal and practical reasons. This is discussed below in the context of some of the key assets typically secured on a finance transaction. Credit balances (e.g. in bank accounts) There is considerable doubt as to whether a lender can take an assignment over a cash deposit held with itself as account bank.
PDF Thinking and Assessing Charge and Assignment Under English Law
charge, and its correlation with another type of agreement, assignment. I will address these aspects: 1. How a charge works and why it matters. 2. Assignment - legal and equitable - by way of charge and by way of security. 3. Why a charge contains assignment provisions. 4. What happens if a contract contains prohibition of assignment ...
Assignment of Contract: What Is It? How It Works
An assignment of contract is a legal term that describes the process that occurs when the original party (assignor) transfers their rights and obligations under their contract to a third party (assignee). When an assignment of contract happens, the original party is relieved of their contractual duties, and their role is replaced by the ...
How do I assign a legal charge?
83% of customers are highly satisfied with Practical Law and would recommend to a colleague. 81% of customers agree that Practical Law saves them time. We are experiencing technical difficulties. Please contact Technical Support at +44 345 600 9355 for assistance. Our client is selling a property which has a lake at the back.
Assignments: why you need to serve a notice of assignment
An assignment can be a legal assignment or an equitable assignment. If a legal assignment is required, the assignment must comply with a set of formalities set out in s136 of the Law of Property Act 1925, which include the requirement to give notice to the contract counterparty.
Assignments by way of security
Assignments by way of security are a type of mortgage. They involve: •. an assignment (ie transfer) of rights by the Assignor to the assignee. subject to: •. an obligation to reassign those rights back to the assignor upon the discharge of the obligations which have been secured. When the obligations that have been secured have been discharged,
Charge and Assignment Definition
Examples of Charge and Assignment in a sentence. In respect of the Trust Agreement, the Deed of Charge and Assignment, the Assignations in Security and the security created thereunder, see "ABSTRACT OF THE OTHER PRINCIPAL TRANSACTION DOCUMENTS" below.. In addition, the Notes are secured and share the same Security with the other Secured Obligations of the Issuer as set out in the Deed of ...
Pledge vs Hypothecation vs Lien vs Mortgage vs Assignment
An assignment is another type of charge on current assets or fixed assets. Under assignment, the charge is created on the assets held in the books. It is another mode of providing security against borrowing. Examples of assignments include life insurance policies, books of debts, receivables, etc., which the bank can finance. For example - A ...
Contract Assignments
In a contract assignment, one of the two parties to a contract may transfer their right to the other's performance to a third party. This is known as "contract assignment.". Generally, all rights under a contract may be assigned. A provision in the contract that states the contract may not be assigned usually refers to the delegation of ...
Security in finance transactions
If, however, an assignment is made 'by way of charge' rather than by way of security then it will take effect in equity only. A legal assignment can only assign debts which already exist. Only an equitable assignment can assign rights under future contracts. Debt finance; Banks; Construction;
What is a notice of assignment?
An assignment takes place when one party is holding a right to property, claims, bills, lease, etc., of another party and wishes to pass it along (or sell it) to a third party. As complicated as that sounds, it really isn't. Strangely enough, many assignments can be made under the law without immediately informing, or obtaining the permission,… Read More »
Notice Of Assignment And Charge
A Notice of Assignment and Charge is a legal document used to notify parties involved about the transfer of rights or interests in a property or asset, as well as the creation of a charge or lien on that property. It is an essential document in various financial and real estate transactions. Here are the different types of Notices of Assignment ...
Assignment
Assignment. The transfer of a right from one party to another. For example, a party to a contract (the assignor) may, as a general rule and subject to the express terms of a contract, assign its rights under the contract to a third party (the assignee) without the consent of the party against whom those rights are held. Obligations cannot be ...
Assignment of Debt
the assignment must be absolute and not by way of charge only; and the express notice in writing must have been given to the person liable to the assignor (i.e the debtor). The effect of a statutory assignment is that the assignee possesses the legal right to the debt and the right to sue the debtor in respect of the debt without needing to ...
Difference Between Assignment And Charge
SATISFACTION OF CHARGE. Within 30 days of treatment satisfaction should be full of any charge which is registered and the company shall get intimation of the same in CHG-4 along with the fee then the ROC will issue of certificate of registration on the satisfaction of a charged under the form number CHG-5. ASSIGNMENT
Charges when Selling or Buying Leasehold Property
The buyer has to pay this charge. 2. Notice of Assignment of Transfer and Charge: The landlord will require that a notice is sent to them notifying of the change of ownership and any mortgage lender. This is to ensure that the landlord has your contact details (these may be different from the address of the property you have purchased) for the ...
Assignment Charges Definition
Examples of Assignment Charges in a sentence. The total charge for service is the charge determined by applying the rates in section 1 below, plus Direct Assignment Charges in section 4 below.. The total charge for Balancing Service is the applicable rate in section 2.a., below, plus Direct Assignment Charges under section 4 and Intentional Deviation Penalty Charges under section 5.
Security assignments
However, a security assignment can qualify (provided it is not "by way of charge"): the fact the assignor has an equity of redemption under a security assignment does not of itself prevent the ...
CHARGE AND ASSIGNMENT Sample Clauses
Sample 1. CHARGE AND ASSIGNMENT. Subject to clause 8 ( Excluded Assets) of the Security Agreement and without prejudice to the generality of clause 2 (a) (Accession), [the/each] Acceding Company with full title guarantee, charges and assigns (and agrees to charge and assign) to the Collateral Agent for the payment and discharge of the Secured ...
Kamala Harris Wasn't the 'Border Czar.' Here's What She Did
In fact, Harris was never put in charge of the border or immigration policy. ... It was the first high-profile assignment in Harris' tenure as Vice President, and it was an especially thankless ...
Charge vs Assignment
As nouns the difference between charge and assignment is that charge is the scope of someone's responsibility while assignment is the act of assigning; the allocation of a job or a set of tasks. As a verb charge is to place a burden upon; to assign a duty or responsibility to. As a proper noun Chargé is a commune in the Indre-et-Loire department in France.
Breaking down Kamala Harris' role at the border during Biden administration
The assignment for Vice President Harris was to focus on what was happening south of the border in the countries from which migrants were coming. She was never actually named "Border Czar." That ...
The facts about Kamala Harris' role on immigration in the Biden
In reality, the only role close to that of a "border czar" under the Biden administration was held for only a few months by Roberta Jacobson, a longtime diplomat who served as coordinator for the ...
Notice of Assignment and Charge Sample Clauses
Related to Notice of Assignment and Charge. Notice of Assignment Upon its receipt of a duly executed and completed Assignment Agreement, together with the processing and recordation fee referred to in Section 10.6(d) (and any forms, certificates or other evidence required by this Agreement in connection therewith), Administrative Agent shall record the information contained in such Assignment ...
RNC 2024: Kamala Harris decried "border czar" by Republicans ...
The assignment was a bit cursed from the start — a "politically treacherous job with little short-term payoff," as it was described by the Los Angeles Times — because any benefits from ...
Why Republicans Keep Calling Kamala Harris the 'Border Czar'
The misleading phrase is meant to underscore one of the thorniest issues in her portfolio: immigration. By Jazmine Ulloa and Nicholas Nehamas Reporting from Milwaukee and Washington As Democrats ...

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