what is assignment of title

How to Sign an Assignment of Title by a Registered Owner

When you're ready to sell a car, sign the Assignment of Title by Registered Owner to get the buyer on his way to transferring the title into his name. Most states require the Assignment of Title -- which can be found on the back of your personal title -- as proof that the sale is legitimate. Signing the Assignment of Title by Registered Owner should take mere minutes. Once it's gone, your vehicle is as good as registered to someone else.

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Flip over your car title to find the Assignment of Title by Owner.

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Print your name, the date you're selling the vehicle and the price of the sale.

Fill in the odometer reading, if necessary. In Tennessee, for example, an odometer reading is only required on vehicles newer than 10 years.

Sign your name as the seller, where indicated.

Give the form to the buyer. She should fill out her name and address and then sign as the buyer.

Bring the Assignment of Title by Registered Owner to the office that issues new motor vehicle titles. In Virginia, for example, it's the Virginia Department of Motor Vehicles.

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How to Fill Out a Car Title Transfer

Last Updated: August 1, 2024 Fact Checked

This article was co-authored by Lahaina Araneta, JD . Lahaina Araneta, Esq. is an Immigration Attorney for Orange County, California with over 6 years of experience. She received her JD from Loyola Law School in 2012. In law school, she participated in the immigrant justice practicum and served as a volunteer with several nonprofit agencies. There are 11 references cited in this article, which can be found at the bottom of the page. This article has been fact-checked, ensuring the accuracy of any cited facts and confirming the authority of its sources. This article has been viewed 575,092 times.

If you are buying or selling a vehicle, you will need to pass ownership of the vehicle by filling out the title transfer. The rules vary from state to state, so it's important to find out the specific paperwork and regulations in your area before moving forward with the sale. In general, however, the steps are essentially the same.

Filling Out a Car Title as a Buyer

• Verify the buyer and seller’s names, the sale date, and VIN number are correct.
• Check the odometer of the car to ensure the mileage on the title is accurate.
• Search the VIN number on the DMV’s site to confirm there's no lien on the car. [1] X Research source
• Sign the title and get the Bill of Sale to transfer the title to you at the DMV.

Selling a Vehicle

• Your DMV should have an application you can complete for requesting a duplicate title. The application or form might be available online.
• You might not have the title because you haven’t paid off your car loan. In that situation, you need to work with your lender to pay off your loan before you will receive the title. Once paid, you can submit a lien clearance letter or other release form to the DMV to get the lien removed. [2] X Research source
• If the car has a lien, then the duplicate will probably be sent to the lienholder, so it is best to take care of the lien before making the sale.

• You can find your DMV online. Type “your state” and then “DMV.” Look for a link that explains transferring title.
• You can also find the specific rules and regulations in your state regarding title transfer here: https://www.dmv.org/title-transfers.php . Click on your state. This website isn’t affiliated with any state government. However, they provide links and contact information to state offices.

• names of the buyer and the seller
• notary’s signature (in some states) [3] X Research source
• date of sale
• Vehicle Identification Number (VIN)
• odometer reading (though in some states this is a separate form)

• If your state doesn’t have a form, you can create your own. It should contain a description of the vehicle, VIN, final sale price, place of sale, and the names of both buyer and seller.
• If the seller made any warranties, those should be included in the Bill of Sale as well. There will also be implied warranties if a written warranty was provided by the dealer when the car was sold. [5] X Trustworthy Source Federal Trade Commission Website with up-to-date information for consumers from the Federal Trade Commisson Go to source

• description of the vehicle, such as its make, model, year, and color
• date of the sale or title transfer
• license plate number
• odometer reading
• new owner’s name and contact information
• your name and contact information

Buying a Vehicle

• names of buyer and seller
• odometer number
• any other information necessary to the sale of the car

• Most liens are held by the bank that gave the seller their car loan. The car is used as collateral for the loan. In that situation, the bank probably has held onto the title and the only way the seller can get the title is to pay off the lien.
• However, a seller could have other liens on the car. Accordingly, don’t assume that there are no liens on the car simply because the seller has title. For example, a child support lien might have been placed on the car. Alternately, a mechanic could get a lien on the car for unpaid repairs. If you buy the vehicle with the lien on it, you now become responsible for the lien. [9] X Research source
• If you have the VIN, you can check for liens by visiting your local DMV or checking their website to see if it has a title check feature. If your DMV's website does have a title check feature, you can enter the VIN to see the title and lien information for the car. This is a critical step, so don’t neglect it.

• Ideally, you should go with the seller to the DMV office and fill out the transfer form together there. Even if not required by the state, going together can protect you because you can check for liens while you are there. [11] X Research source
• The DMV should also have a notary public in the office, in case your state requires that your signatures be notarized.

• You’ll also need the VIN and current odometer reading, which should be on the title form. In some states, the odometer reading will be written on a different form.

• You typically must pay a fee for the title transfer, which will vary by state.
• You must turn over the title. Your state should send you a new title in the mail.

• proof of insurance
• proof that you’ve paid sales tax
• certificates showing the car has passed safety and emissions inspections

Expert Q&A

• If you ever have questions about the process, contact your local DMV. They can give you the correct information you need. Thanks Helpful 1 Not Helpful 0

You Might Also Like

• ↑ https://www.txdmv.gov/motorists/buying-or-selling-a-vehicle/title-check-look-before-you-buy
• ↑ https://dmv.ny.gov/titles/how-remove-lienholder-title
• ↑ https://www.dmv.org/az-arizona/title-transfers.php
• ↑ https://www.dmv.org/bill-of-sale-form.php
• ↑ https://www.consumer.ftc.gov/articles/0055-buying-used-car
• ↑ https://www.dmv.ca.gov/portal/vehicle-registration/titles/title-transfers-and-changes/notice-of-transfer-and-release-of-liability-nrl/
• ↑ https://dmv.ny.gov/registration/how-check-title-or-lien-status
• ↑ https://www.nj.gov/mvc/vehicles/transowner.htm
• ↑ https://www.dmv.ca.gov/portal/dmv-virtual-office/title-transfers/
• ↑ https://www.txdmv.gov/motorists/buying-or-selling-a-vehicle

About This Article

To fill out a car title transfer when selling your vehicle, make sure you have the title or apply for a duplicate from the DMV. Once you secure the title, fill out the transfer form, including the names of the buyers and sellers, date of sale, price, vehicle identification number, and odometer reading. After you finish the paperwork, get all of the necessary signatures. Depending on the specific rules in your state, you might need to have your paperwork notarized and include a Bill of Sale. When you’ve completed your state’s requirements, which you can verify on the DMV website, submit the Notice of Transfer or Release of Liability to the DMV to protect you in case the new owner gets into an accident before the paperwork is processed. To learn how to fill out a car title transfer when buying a vehicle, keep reading! Did this summary help you? Yes No

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We are Title Wizards, here to help you sign your title correctly and to answer all your questions. We’ve created instructions on how to sign your title in accordance with state requirements. Feel free to call 1-877-957-2277 or email us [email protected] if you don’t see your question answered below.

Haga clic aquí para ver las instrucciones del título en español .

Select Your State Title Instructions Below:

State title instructions.

Q&A’s

How do i transfer my title.

In general, when selling or donating a vehicle you must complete the section of the title labeled “Assignment of Title by Owner” or “Transfer of Ownership”. There are typically one or more sections of the title dedicated to dealer reassignments which should be left blank.

In the “Assignment of Title by Owner” or similar section, any fields that require information about the seller/owner/transferer are asking for information about you. When the title asks for the seller’s name you would either print or sign your name exactly as it appears on the title where you are listed as the owner. Most states require that all owners listed on the title must print and sign their name when transferring ownership.

Any fields that require information about a buyer/purchaser/transferee are asking for information about the person you are selling or donating the vehicle to. This section should never, under any circumstances, be left completely blank as this can lead to abuses and liability for you.

How do I obtain a duplicate title?

To apply for a duplicate title, choose your state from the dropdown below:, state duplicate title links.

Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming

What documents do I need to donate a car to charity?

Our title specialists can tell you what is required in your state. Most states require that you have a clear title to the vehicle; some states also require a notarized signature to complete the transfer. If you cannot locate or have lost the certificate of title, we can help guide you in the right direction of how to obtain a duplicate title.

How do I obtain a California duplicate title?

If your car was last registered, titled and being picked up in California instead of obtaining a duplicate title (California DMV Form REG227) , we have a quicker solution for you. We can accept a Reg 262 and Reg 227 in place of the pink slip. The Reg 262 is a secure form that needs to be obtained at your local DMV or if you call us at 1-877-957-2277 we can mail you one. Together these forms can be used in lieu of a title.

How do I obtain a Washington duplicate title?

If your car was last registered, titled and being picked up in Washington instead of obtaining a duplicate title (Washington Title Replacement Affidavit) , we have a quicker solution for you. We can accept an Affidavit in Lieu of Title. This can be obtained at any of your local quick title offices (Washington Quick Title) .

What if the vehicle isn’t registered in my name?

The vehicle does not have to be registered in your name. The name on the title and the name on registration documents often differ. Contact our processing center at 1-877-957-2277 for more information.

How do I know my title is a clear, transferable title?

• The title must be in your name, with no cross-outs or errors.
• All liens must be released, if there is a lien listed on your title, it must be signed off on the title, or you must provide a separate lien release document.
• You must sign as the seller per our title instructions. These instructions are sent to you after you complete our donation process and are included in your Thank You Letter from your charity. Or please choose your state from the dropdown below:

My name has changed since the car has been titled. How do I sign?

You must sign the title with your name as it is shown on the front of the title. If you do not, the title will be void and you may need a correction form or duplicate title.

My title is signed over to someone else. Can I cross it off and write in Advanced Remarketing Services? Or use the next section?

No, if you do this your title will become void. Unless you are a licensed dealer, you must transfer the title into your name. Once a title is issued in your name we can then proceed with your donation. Please contact us and we will happily advise you on how to obtain the documents necessary to complete your car donation.

There are 2 people listed on the title, do both of us need to sign?

Yes. If there are 2 owners listed on the front of a title, the majority of the time, both people will need to sign as the seller. If there is an ‘or’ in between the names, typically only 1 signature is required. Check your state title instructions from the links below for your specific state.

The title is in a deceased person’s name. How do I complete the transfer of title?

Different states require different paperwork. Usually, this involves a copy of the death certificate, executor rights paperwork, and the signed title. Please call us at 1-877-957-2277 to confirm what is needed in your state.

I made a mistake/error on my title. What do I do next?

Stop! Do not cross out or write over the error. Please call us at 1-877-957-2277 or email our specialists at [email protected] and they will guide you in the right direction.

What if my car’s registration isn’t current?

Most states do not require your registration to be current. So long as you have the most current title you are able to donate; however, in the state of Oklahoma, your registration must be current in order for us to accept your donation.

More questions?

Feel free to call 1-877-957-2277 or email us [email protected] .

Release of Liability Information

Do i have to no tify the dmv about my car donation.

These states require the donor/owner of the vehicle to fill out and submit a Release of Liability form after your car has been picked up : Alaska , California , Colorado , Florida , Iowa , Illinois , Louisiana , Minnesota , Missouri , Mississippi , Oregon , South Carolina , Texas , Washington . The tow driver or program vendor cannot report this to the state on your behalf. Failure to submit these forms will result in fines from your state.

When should I cancel my insurance?

You should cancel your car insurance after the vehicle has been picked up. Please do this AFTER you have notified your state that you donated a vehicle.

Should I remove my license plates?

It depends on the state. The confirmation email that you received after you submitted your donation will specify your state’s policies. Click  here to find your state’s license plate return policy.

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How to Perform a Title Transfer in Iowa

The Iowa car title transfer process must be completed through the Motor Vehicle Division (MVD) of the state Department of Transportation (DOT) by vehicle owners who have purchased or sold a motor vehicle. However, the MVD title transfers for cars must also be finalized under other unique circumstances, such as after transferring the vehicle ownership as a gift, donation or inheritance.

Note that when completing a vehicle title transfer in IA, new car owners may also be required to apply for a new registration card at the same time. Review the IA title transfer requirements and the situations when an auto title transfer is necessary in the sections outlined below.

What is a car title transfer in Iowa?

Before applying for a transfer of car title in Iowa, vehicle owners must get more information about the car title transfer process and the function of a certificate of title. The IA title transfer for cars is a procedure that must be completed on each occasion a motor vehicle changes ownership from one person to another, regardless of the circumstances surrounding the passing of possession.

If you fail to meet the state title transfer requirements after obtaining a used vehicle, you will be unable to complete the car registration procedure and obtain new license plates . If you are the seller, on the other hand, you will also have to complete the title transfer transaction to avoid accountability for the sold vehicle in the future.

When is a vehicle title transfer required in Iowa?

Transferring a car title in Iowa is a mandatory transaction that must be initiated within a certain number of days of buying or selling a vehicle within the state. However, in addition to the standard Iowa car title transfer, which is completed between a seller and a purchaser, other unique situations will also require the completion of the transfer of vehicle title in the state.

For instance, the auto title transfer process must also be finalized if the vehicle in question is donated, inherited or transferred as a gift.

Information and Documents Necessary to Transfer a Title in Iowa

One of the most important steps in the Iowa vehicle title transfer procedure is meeting the applicable title transfer requirements, which include submitting certain documents and paying the titling and registration fees.

Note that the IA car title transfer requirements may vary depending on factors like the applicant’s circumstances, the vehicle age and the nature of the ownership transfer. The standard documents to transfer a vehicle title in IA after a private sale are outlined in the following list:

• A completed title application, if necessary
• A properly signed-over certificate of title
• A separate odometer statement if the title does not have a specific area for this purpose
• A damage disclosure statement if the title does not contain a specific section for this purpose
• A bill of sale , if required
• An official identification document, such as a license to drive

Note: If the title transfer for vehicles cannot be completed due to a lost title, the seller can obtain a replacement title certificate by submitting a paper application by mail or in person to the MVD.

If you are wondering how to fill out transfer of title forms, it is important to note that both the buyer and the seller must provide certain information in order to finalize the title transfer for cars in IA. For instance, the seller must ensure that he or she fills out the Assignment of Title section on the current title certificate with the buyer’s personal information, the date of sale and his or her official signature.

Conversely, the buyer will be required to fill out an application with his or her personal information, the purchase price of the vehicle and any applicable lien information.

Steps for Performing a Transfer of Title in Iowa

If you are wondering, “How do you transfer a title on a car in Iowa?” note that you cannot complete the title transfer online. Thus, you will need to submit the necessary items outlined in the previous section in person at your local DOT office.

While the division recommends that both the seller and the buyer complete the vehicle title transfer procedure together, you can still transfer the auto title without the assistance of the other party. After submitting the necessary documents and fee payments to complete the IA transfer of car title, the presiding MVD agent will forward your request for the manufacturing of new documents.

Note: As proof of sale, the seller can either obtain a notice signed by the buyer that confirms the sale or a copy of the back of the car title or submit a specific notice to the state MVD.

Getting a New Car Title Versus Title Transfers in Iowa

Prior to getting a new car title in Iowa, vehicle owners are encouraged to learn the differences between the process for obtaining a new car title and the title transfer procedure. A DMV new title is required for all types of motor vehicles, mobile homes, travel trailers, semi-trailers and regular trailers that are over 2,000 pounds.

The state Department of Transportation (DOT) issues a new title for a car that was recently purchased as brand-new or to new residents who want to operate their out-of-state vehicles in the state.

Thus, there are different procedures for motorists to order a new car title or transfer an existing certificate to another entity. A title transfer procedure, for instance, must be performed when motorists want to transfer the ownership rights of a motor vehicle from one person to another.

The process of transferring a title may be a requirement when purchasing or selling a motor vehicle. Moreover, drivers may also need to transfer their car titles upon inheriting a vehicle or receiving it as a gift or donation.

Car Title Transfer Fees in Iowa

When transferring your vehicle title in Iowa, you will be required to arrange payment for several types of fees. Note that the total car title transfer cost will include both the standard titling fee and the applicable registration fees.

Therefore, in addition to a titling fee, vehicle owners will also be required to pay registration fees that vary based on factors such as the vehicle type, age, weight and price.

The costs to transfer a car title in IA and register the vehicle in question may also differ depending on the applicant’s county of residence. To learn more about the costs to transfer a vehicle title in Iowa, contact your county treasurer.

• How to Sell Your Vehicle in Iowa from IowaDOT.gov
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Real Estate Contracts

What is an assignment contract.

Assignment contracts are a vehicle used by real estate investors to transfer one party’s rights and obligations under an existing real estate contract to another party. Assignment contracts don’t involve transferring or selling the property directly like a purchase agreement. Instead, the buyer under the original purchase agreement (the assignor) assigns their rights and obligations under the purchase agreement to the assignee, sometimes for a profit. The assignee then becomes the buyer under the original real estate contract.

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When Is an Assignment Contract Used?

In one scenario, a type of real estate investor called a wholesaler contracts with the current owner(s) of a distressed property that may be unsellable to average homebuyers. The wholesaler creates a purchase agreement with that owner to buy their property. The wholesaler then finds an end buyer who wants to take possession of the property. The assignment contract is then created to transfer the wholesaler’s rights and obligations under the original purchase agreement to the end buyer.  

Elements of an Assignment Contract

• Assignor : the real estate wholesaler. This is the person who is the buyer under the original purchase agreement and who is selling or transferring their rights and obligations under that contract. 
• Assignee : the end buyer. This is the person who is purchasing or receiving the assignor’s rights and obligations under the original purchase agreement and who would ultimately pay the purchase price (plus any assignment fee agreed to in the assignment contract) and take possession of the property. 
• Description or identification of contract being assigned:  a description of the original purchase agreement being assigned. Oftentimes, the assignment contract will also attach the original purchase agreement or state that it has been provided to the assignee.   
• Subject property information: the property address, legal description, or property identification number/parcel number for the property that is the subject of the original purchase agreement.  
• Assignment earnest money amount:  like with other types of real estate contracts, earnest money shows the assignee is a serious buyer. The money helps ensure that the assignee won’t back out of the deal for frivolous reasons. 
• Assignee’s purchase amount: the amount the end buyer agrees to pay that fulfills or exceeds the original purchase agreement amount. 
• Assignment fee: the amount of money the assignor will make for finding an end buyer. The assignment fee should be clearly set forth in the assignment contract.
• Name of the company holding escrow : the assignment contract will designate what company is holding escrow.  This escrow company should match the escrow company listed in the original purchase agreement or you will need an amendment to the original purchase agreement or, in states where it is permissible, a split escrow.  
• Closing date: the date by which the transaction should be finalized. This should correspond to the original purchase agreement’s closing date. If a different date is used, an amendment to the original purchase agreement may be required.  
• How assignment earnest money is handled : should one party cancel the contract or fail to meet the contractual obligations, the earnest money may either be forfeited by the assignee or returned. In instances of a dispute between the parties, the third party holding escrow may release the assignment earnest money pursuant to the terms and conditions of the assignment contract.

Writing a comprehensive assignment contract is a vital part of several real estate investing strategies. If you’re new to creating these kinds of contracts, be sure to get some legal advice before moving forward. Once you have a solid assignment contract template in place,  transactions using this contracting tool will run more smoothly. 

* The information provided on this site does not, and is not intended to, constitute legal, financial, tax, or real estate advice. Please consult your expert for advice in those areas. All content is for general informational purposes only and is not intended to provide a complete description of the subject matter. Although Blueprint provides information it believes to be accurate, Blueprint makes no representations or warranties about the accuracy or completeness of the information contained on this site. Specific processes will vary based on applicable law. The title and closing process will be handled by a third-party attorney to the extent required by law. Product offerings vary by jurisdiction and are not available or solicited in any state where we are not licensed.

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Assignment Definition

Investing Strategy , Jargon, Legal, Terminology, Title

Table of Contents

• What Is an Assignment?
• What is an Assignment in Real Estate?
• What Does it Mean to Assign a Contract in Real Estate?
• How Does a Contract Assignment Work?
• Pros and Cons of Assigning Contracts

REtipster does not provide legal advice. The information in this article can be impacted by many unique variables. Always consult with a qualified legal professional before taking action.

An assignment or assignment of contract is a way to profit from a real estate transaction without becoming the owner of the property.

The assignment method is a standard tool in a real estate wholesaler’s kit and lowers the barrier to entry for a real estate investor because it does not require the wholesaler to use much (or any) of their own money to profit from a deal.

Contract assignment is a common wholesaling strategy where the seller and the wholesaler (acting as a middleman in this case) sign an agreement giving the wholesaler the sole right to buy a property at a specified price, within a certain period of time.

The wholesaler then finds another buyer and assigns the contract to him or her. The wholesaler isn’t selling the property to the end buyer because the wholesaler never takes title to the property during the process. The wholesaler is simply selling the contract, which gives the end buyer the right to buy the property in accordance with the original purchase agreement.

In doing this, the wholesaler can earn an assignment fee for putting the deal together.

Some states require a real estate wholesaler to be a licensed real estate agent, and the assignment strategy can’t be used for HUD homes and REOs.

The process for assigning a contract follows some common steps. In summary, it looks like this:

• Find the right property.
• Get a purchase agreement signed.
• Find an end buyer.
• Assign the contract.
• Close the transaction and collect your assignment fee.

We describe each step in the process below.

1. Find the Right Property

This is where the heavy lifting happens—investors use many different marketing tactics to find leads and identify properties that work with their investing strategy. Typically, for wholesaling to work, a wholesaler needs a motivated seller who wants to unload the property as soon as possible. That sense of urgency works to the wholesaler’s advantage in negotiating a price that will attract buyers and cover their assignment fee.

RELATED: What is “Driving for Dollars” and How Does It Work?

2. Get a Purchase Agreement Signed

Once a motivated seller has agreed to sell their property at a discounted price, they will sign a purchase agreement with the wholesaler. The purchase agreement needs to contain specific, clear language that allows the wholesaler (for example, you) to assign their rights in the agreement to a third party.

Note that most standard purchase agreements do not include this language by default. If you plan to assign this contract, make sure this language is included. You can consult an attorney to cover the correct verbiage in a way that the seller understands it.

RELATED: Wholesaling Made Simple! A Comprehensive Guide to Assigning Contracts

This can’t be stressed enough: It’s extremely important for a wholesaler to communicate with their seller about their intent to assign the contract. Many sellers are not familiar with the assignment process, so if the role of the buyer is going to change along the way, the seller needs to be aware of this on or before they sign the original purchase agreement.

3. Find an End Buyer

This is the other half of a wholesaler’s job—marketing to find buyers. Once they find an end buyer, the wholesaler can assign the contract to the new party and work with the original seller and the end buyer to schedule a closing date.

4. Assign the Contract

Assigning the contract works through a simple assignment agreement. This agreement allows the end buyer to step into the wholesaler’s shoes as the buyer in the original contract.

In other words, this document “replaces” the wholesaler with the new end buyer.

Most assignment contracts include language for a nonrefundable deposit from the end buyer, which protects the wholesaler if the buyer backs out. While you can download assignment contract templates online, most experts recommend having an attorney review your contracts. The assignment wording has to be precise and comply with applicable local laws to protect you from issues down the road.

5. Close the Transaction and Collect the Assignment Fee

Finally, you will receive your assignment fee (or wholesale fee) when the end buyer closes the deal.

The assignment fee is often the difference between the original purchase price (the price that the seller agreed with the wholesaler) and the end buyer’s purchase price (the price the wholesaler agreed with the end buyer), but it can also be a percentage of it or even a flat amount.

According to UpCounsel, most contract assignments are done for about $5,000, although depending on the property and the market, it could be higher or lower.

IMPORTANT: the end buyer will see precisely how much the assignment fee is. This is because they must sign two documents that show the original price and the assignment fee: the closing statement and the assignment agreement, respectively, to close the transaction.

In many cases, if the assignment fee is a reasonable amount relative to the purchase price, most buyers won’t take any issue with the wholesaler taking their fee—after all, the wholesaler made the deal happen, and it’s compensation for their efforts. However, if the assignment fee is too big (such as the wholesaler taking $20,000 from an original purchase price of $10,000, while the end buyer buys it for $50,000), it may ruffle some feathers and lead to uncomfortable questions.

In these instances where the wholesaler has a substantially higher profit margin, a wholesaler can instead do a double closing . In a double closing, the wholesaler closes two separate deals (one with the seller and another with the buyer) on the same day, but the seller and buyer cannot see the numbers and overall profit margin the wholesaler makes between the two transactions. This makes a double closing a much safer way to conclude a transaction.

Assigning contracts is a way to lower the barrier to entry for many new real estate investors; because they don’t need to put up their own money to buy a property or assume any risk in financing a deal.

The wholesaler isn’t part of the title chain, which streamlines the process and avoids the hassle of closing two times. Compared to the double-close strategy, assignment contracts require less paperwork and are usually less costly (because there is only one closing occurring, rather than two separate transactions).

On the downside, the wholesaler has to sell the property as-is, because they don’t own it at any point and they cannot make repairs or renovations to make the property look more attractive to a potential buyer. Financing may be much more difficult for the end buyer because many mortgage lenders won’t work with assigned contracts. Purchase Agreements also have expiration dates, which means the wholesaler has a limited window of time to find an end buyer and get the deal done.

Being successful with assignment contracts usually comes down to excellent marketing, networking, and communication between all parties involved. It’s all about developing strategies to find the right properties and having a solid network of investors you can assign them to quickly.

It’s also critical to be aware of any applicable laws in the jurisdiction where the wholesaler is working and holding any licenses required for these kinds of real estate transactions.

Related terms

Double closing, wholesaling (real estate wholesaling), transactional funding.

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Title Frequently Asked Questions

A title is a secure, negotiable document issued by the DOR that represents ownership of a motor vehicle, trailer, or a manufactured housing unit.​

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Since 1969 Mississippi requires all motor vehicles to be titled. Beginning in 1999 manufactured homes are required to be titled. Pre-1969 vehicles and ATV’s may be voluntarily titled.​

When registering the vehicle in Mississippi, you will need to provide the title from the other state and an odometer disclosure statement. If the vehicle was not titled in the other state, you will need to provide the Manufacturer’s Statement of Origin.​

You should register the vehicle at your county Tax Collector’s office within 30 days of establishing residency in Mississippi. At the Tax Collector’s office you will need to complete an Application for Mississippi Title and License for each vehicle you own and pay all applicable taxes and fees. You will need the vehicle’s title and current valid registration (license plate) receipt from the state in which the vehicle was last registered.

If the title is being held by your lien holder or if the vehicle is being leased, you will need to supply documentation supporting the ownership. Appropriate ownership documentation is a registration receipt from another state or a duplicate title from another state. If all information is complete, you will be issued a license plate at that time. If there is a lien on the vehicle, DOR will hold the title application until the out-of-state title is forwarded to DOR.

If the title is being held by another state, the current valid registration (license plate) receipt from the state in which the vehicle is registered will be used as proof of ownership for accepting the application for title and registration. DOR will correspond with the lienholder and/or the other state to request that the title be surrendered to Mississippi. If the title is not surrendered, your application will not be processed and your license plate may not be renewed. The vehicle can not be legally operated without valid/current registration.

You will need to apply for a Mississippi Drivers License. Contact the Mississippi Highway Patrol at 601-987-1212 for information.

There is a $9.00 fee for a motor vehicle title or a manufactured home title. A “Fast Track” title is available for an additional $30.00 if you need expedited processing of the title application. Designated agents may add $1.00 to the transaction as their fee for services rendered.​

Titles are normally issued within 3-4 weeks after the title application is received by DOR unless further research or documentation is required. Fast Track titles are issued within 72 hours of receipt of the application by DOR.​

You must complete  Form 78-006​  “Application for Replacement Certificate of Title” and pay a $9.00 fee. For a Fast Track title, complete Form 78-026 and pay a $39.00 fee.

If you are planning either to buy or sell a vehicle and that vehicle’s title is missing, the owner of the vehicle must apply for a duplicate title. The sale is not valid without a properly assigned title. If the title has been lost, mutilated, destroyed or otherwise ruined, the owner of the vehicle must apply for a duplicate title in order for the sale to proceed.

It normally takes 10-14 days from time the application is received by DOR to receive a duplicate or replacement title. Fast Track titles are issued within 72 hours of receipt of the application by DOR.​

If you didn’t receive the title or cannot obtain a title, then you will need a title bond. Please contact the Title Bureau at 601-923-7640 for further information.​

To transfer ownership, the title for the vehicle or trailer must be assigned to the new owner. The seller must complete all information on the assignment of title except for the buyer’s printed name and signature. If the title assignment does not have a space to record the purchase price, a bill of sale will also be required.

If the buyer and seller are related as spouse, child, parent, grandchild, or grandparent, an Affidavit of Relationship should be completed.

The previous owner must remove their license plate from the vehicle or trailer once the title is assigned and the vehicle or trailer is delivered to the new owner.​

You should go to your local county Tax Collector’s office and complete a title application, form 78-002. You will need to have the previous (currently existing) title of the vehicle.

On the existing title, you will need the signature of the surviving spouse if the existing title is joint ownership listed as “John OR Jane Doe.” If the existing title is listed as “John AND Jane Doe,” or “John AND/OR Jane Doe,” you need a completed title application, the existing title signed by the surviving spouse, and a court endorsed copy of the decedent’s will.

If a will wasn't probated, you need to provide a letter of administration or testamentary naming the person (new owner) to receive the vehicle. If the owner of the vehicle died without a will, you will need to form 79-014, “Affidavit-Owner Dies without a Will.”

Legal heirs should take the completed form and information to their local county Tax Collector’s office. The executors or administrators of estates may apply for an original title using the same process. A title fee will apply, along with other appropriate fees or taxes.​

Model year 2000 and following are required to be titled. You will need to provide the original Manufacturers Statement of Origin when completing the application for certificate of title. Pre year 2000 units are required to be titled if the home is sold through a licensed mobile home dealer.​

A motorized bicycle manufactured in 1980 and after must have a seventeen (17) digit VIN conforming to the National Highway and Traffic Safety Administration requirements. There must be a decal or plate attached with a statement that the motorized bicycle meets the Federal Safety Standards. If the motorized bicycle does not meet these requirements, it is considered a “toy vehicle.” A toy vehicle can not be titled or registered in Mississippi and can not be operated on public roadways within this state.​

Please contact the Mississippi Department of Wildlife, Fisheries and Parks (phone 601-432-2065) for information on boat and watercraft registration requirements in Mississippi.

Boat trailers may be voluntarily titled if less than 5000 pounds Gross Vehicle Weight (GVW.) If the trailer is over 5000 pounds GVW, then it is required to be titled.​

Please take the incorrect title to your county Tax Collector’s office and apply for a corrected title. DOR will research the error. There is no fee if the error was made by the county and/or the state. However, if the title was issued according to the paperwork submitted, the applicant will be requested to submit a fee for the corrected title.​

To change a name(s) on the title, you need to take the title to your local county Tax Collector’s office and complete the necessary applications. You may only add a member of your immediate family, specifically your spouse, parent, child, grandparent or grandchild, to a title.

Adding additional names of non-immediate family members is considered a new title application and all fees and taxes, including casual sales tax, will be due. You will need to complete the information requested on the back of the existing title. Please record all the names that are to appear on the new title in the “purchaser’s name” space. If there is a lien holder for the vehicle, then the lienholder must be listed at the bottom of the title in the “reassignments” space.

If you are changing a name due to marriage or a court order, you will need to provide a copy of the marriage license or the court order.​

If the vehicle was purchased from a Mississippi dealer, the completed application for certificate of title is submitted by the dealer. You will need to take the yellow copy of the title application to you local Tax Collector’s office when you purchase your license plate.

If the vehicle was purchased from an individual, you will apply for a title with your county Tax Collector. If there is no "purchase price" space on the assignment of title, you will need to provide a bill of sale to the Tax Collector. You will be required to pay Sales Tax on the purchase of this vehicle.

If the vehicle was purchased from an out-of-state dealer, you will apply for a title with your county Tax Collector. You will need to provide a copy of your purchase or sales invoice to the Tax Collector. You will be required to pay Sales tax on the purchase of this vehicle.​

You need to remove the license plate(s) from a vehicle or trailer that you have sold or disposed of when handing over the title to the new owner. You should then take the license plate to the county Tax Collector’s office. Once the tag is turned in, the record for the vehicle showing your name as owner will no longer be the current ownership record.

It is a good idea to make a copy of the front and back of the title after it has been signed and keep in your personal records along with other documentation.​

​If you are buying the vehicle from a seller who does not have the title, the seller will need to obtain a duplicate or replacement title so that they may transfer ownership to you.

I just bought a vehicle and the seller did not give me the title and I can't find him or her; OR, the title that the seller gave me does not have a complete assignment (missing signatures, mileage, etc.) and I can't locate the seller to fix the problem. What do I do?  In these types of situations, please contact the Title Bureau at 601-923-7200 for information.​

No. Never deliver or accept a title that is not completely and properly assigned. It is a violation of Mississippi law to fail to show complete chain of ownership of the title.​

In Mississippi ATV’s are voluntarily titled but they are not issued a license plate (registered.) It is unlawful for any person to operate these vehicles on an interstate highway, federal highway or state highway, or in the corporate limits of any city unless authorized by such city. Please contact your local authorities and property owners for information about operation of these devices on private property.​

When you go to your county Tax Collector’s office to apply for a title and register the vehicle, you will need to take the following documentation with you: a current Registration Certificate; a notarized Bill of Sale; the foreign country's ownership documents (similar to our certificate of title); U.S. Customs Form 7501; EPA Form 3520-8; DOT Form HS-7; and, the manufacturer's statement of origin (MSO.)

(In Canada the equivalent form for a MSO is referred to as a New Vehicle Information Statement (NVIS, ) and in Europe the similar form is referred to as a European Community Certificate of Conformity.)

You must provide a certified English translation of any document printed in any language except English.​

A fast track title (original or replacement) is one that is issued within a 72-hour time period after DOR receives the application. There is an additional $30.00 fee for this expedited service. The fast-track program does not change any paperwork requirements. All required documents must be completed and attached. If paperwork is not correct or completed, all paperwork will be rejected.​

A salvage title is the title issued for a vehicle after an insurance company pays a “total loss claim” on that vehicle.​

A title brand provides important information about the condition of a vehicle. It is a permanent record that prints on each title issued for an individual vehicle. When you are buying a vehicle, check the front of the title for any brands and ask the seller if he/she should check any of the brands on the assignment of title at the time of transfer. Examples of branded titles include salvage, rebuilt, flood-damaged, and hail-damaged.​

As the seller, you must sign over the title to your insurance company so they can apply for a salvage title. If you have sold the vehicle to a salvage yard, you must apply for the salvage title and provide it to the salvage yard.​

Please contact DOR’s Title Bureau at 601-923-7200, or you may email your questions from the contact us section on our webpage.​

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ASSIGNMENT OF TITLE INSURANCE POLICY

The ALTA Owner Policy definition of insured extends to certain people beyond the named person or entity on Schedule A. It also includes "those who succeed to the interest of the named insured by operation of law as distinguished from purchase including, but not limited to, heirs, distributees, devisees, survivors, personal representatives, next of kin, or corporate or fiduciary successors." This means that anyone who takes title from the insured by a conveyance is not an insured and cannot make a claim under the policy.

For the most part, those who take title by conveyance are third parties, usually buyers in a buy/sell transaction. However, sometimes the insured will convey the property to his or her own trust, a family partnership, or some other entity that the insured controls. In this case, the new entity in title is not an insured.

On the other hand, the new entity will not really benefit from a new policy because the Policy Exclusions 3a and 3e, for matters created, suffered, or assumed by the insured and for consequences of the failure to pay value for the property, will diminish coverage.

To provide some coverage to the new entity, it is prudent to obtain an Assignment of Title Insurance Policy. In the past, assignments of title policies were entirely handled by ATG staff. Now, ATG has new procedures that allow members a choice of two ways to provide this coverage to insureds. Members can earn a fee for issuing these endorsements and provide excellent legal advice to clients about how to ensure appropriate title coverage for their estate planning transfers.

ATG has a new endorsement that allows an estate planning vehicle to be an insured under an ATG Owner Policy, despite the fact that the estate planning vehicle takes title by conveyance.

The endorsement is the Assignment of Title Insurance Policy Endorsement (ATG Form 2089), which carries a special risk premium to ATG of $200. For insureds in the process of conveying their property to an estate planning vehicle, this endorsement may be issued at the time of the conveyance to ensure that the coverage under an original ATG Owner Policy will continue for the benefit of the estate planning vehicle.

This endorsement does not extend the Date of Policy, does not add insurance for defects, liens, or encumbrances after the Date of Policy, and does not insure the validity of the conveyance or of the estate planning vehicle.

To issue this endorsement, take the following steps:

1.      Obtain a copy of the recorded deed to the estate planning vehicle and a copy of the ATG Owner’s Policy.

2.      Review the deed to be sure it conveys the same property as is covered by the Owner’s Policy, and to determine whether all the Insureds on the Owner’s Policy conveyed their interests to the estate planning vehicle. (If not, please contact the Underwriting Department for instruction).

3.      Complete the endorsement to show the names of the grantors who are assigning the Owner’s Policy, as shown on the Owner’s Policy, and the names of the assignees, as shown on the deed.

4.      Have the assignors sign the endorsement.

The assignees should attach the endorsement to the original title policy once it is complete. Remit copies of the endorsement and Owner’s Policy, together with ATG’s premium, to the Policy Records Department in Champaign.

Questions? Contact an Underwriter . 

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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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How to Write Essay Titles and Headers

The deadline for your latest writing assignment is mere minutes away. You’re rushing to get the final details together and suddenly realize you’ve forgotten a title. You quickly throw something random on top of the page and submit it to your teacher.

You’re not satisfied with your title, but you vow to do better next time. And you will!

You’ve learned from your mistake: essay titles are not a last-minute detail. They’re an integral part of any piece of written work and should be planned out earlier on in the writing process.

Titles lead to your reader’s first impression of your essay, and the headings help organize your thoughts and make the essay easier to read. Let’s take a look at how you can turn your titles from an afterthought into a well-thought-out writing element.

How Do You Write a Great Title?

People DO judge a book by its cover, and they will judge your essay by its title. So writing a strong title is an important part of starting your writing off on the right foot.

Your essay title has two main functions:

• Inform your reader
• Spark your reader’s interest

Additionally, keep in mind these three pointers:

Be clear and concise

Vague titles do not inform the reader. Provide a specific description of what your focus will be. Your audience wants to know precisely what they will be reading.

Bad Example: Oceans

Good Example: Disappearing Ocean Life in the Pacific Rim

Offer an exciting tidbit or interesting fact

If your title is boring, readers will not want to keep reading. Offer them something that will get attention.

Bad Example: How Consumers are Wrongly Spending Money

Good Example: The Seven Million Dollar Mistake

Everyone may be writing a college admissions essay, but don’t title yours: My College Admissions Essay . No matter what the prompt, make your title something that stands out from the stack.

Bad Example: My Research Project

Good Example: Relocating the Human Race to Mars

How Do You Create a Great Header?

Essay headers are often overlooked by writers, but they can really help your readers as they journey through your essay. While the title may get the reader hooked, the headers keep them moving smoothly through your paper. They enhance readability and help explain what is most relevant in the essay.

Each essay header should answer these two questions:

• What will I learn?
• What is the focus?

When readers approach a new section of your essay, they will have a better reading experience if they have a small preview of what’s to come.

Writing a useful header should be relatively easy. Read through your paragraphs and see what the main idea of is. From here, make a list of sub-topics that are discussed in each section. The best way to do this is to pull from the main points you listed out in your outline (which you, of course, remembered to do!).

Remember the following details about writing a header:

Be simple, but informative

You don’t want to give away all of your ideas here, but you need to give some guiding information.

Bad Example: Eating Too Many Fatty Foods Can Increase Your Cholesterol Levels

Good Example: How Your Diet Affects Your Health

Be consistent throughout your essay.

Choose a pattern and stick with it throughout the entirety of the assignment. If you start off by having a heading for each paragraph, keep it that way until the end. Also, make sure the format remains the same. If your first heading is in the form of a question, all of the rest should be as well.

Bad Example: Beaches, What is Up With Littering?, I Want to Clean Up the Planet

Good Example: Neglected Beaches, Effects of Litter, Motivated Activists

Just like when you are writing a title, there are generic headings you can lean on to get it done quick and easy. But don’t use these. Your conclusion shouldn’t have the header, "Conclusion." Come up with something unique for each part of your essay to keep your reader from feeling fatigued as they read on.

Bad Example: Conclusion

Good Example: Will the Pandas Survive?

Be organized and helpful

Your essay should be scannable. This means that if someone needs information fast, they can find it without having to read every word of your piece.

Although titles and headers are often neglected, they are very important to your pieces of writing. They grab your reader’s attention from the start and keep them focused throughout the rest of your essay. Taking the time to craft great titles and headers can advance your writing to the next level.

Don’t overlook the title and section headers when putting together your next writing assignment. Follow these pointers for keeping your writing organized and effective.

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Assignment of Interest In LLC: Everything You Need to Know

Assignment of interest in LLCs happens when a member communicates to other members his/her intention to transfer part or all of his ownership rights in the LLC to another entity. 3 min read updated on October 28, 2020

Assignment of interest in LLCs happens when a member communicates to other members his/her intention to transfer part or all of his ownership rights in the LLC to another entity. The assignment is usually done as a means for members to provide collateral for personal loans, settle debts, or leave the LLC. The member (assignor) and the person assigned (assignee) sign a document called the Membership Assignment of Interest.

Why a Member May Want to Assign Interest

A member may choose to assign interest for a number of reasons.

• The assignment of interest may happen as collateral to a loan to one of the members.
• Some members can assign interest to settle debts. The assignment will be effective until the debt is cleared.
• An assignment of interest can also' be done  to a member's legal heirs , going into effect upon the death of a member. 

The Rights and Limitations of the Assignee

The laws governing LLC membership interest assignments vary considerably from one state to another. 

• Most states prohibit the assignee from participating in the LLC's operations or decisions unless the Articles of Organization have this provision.
• An assignee is protected from liability from the assignor until the assignee becomes a member in most states. However, the law in a few states, including California and Florida, states that the assignee does get the assignor's liability.
• Should the assignee become a member after the assignment, he is only entitled to the rights and restrictions the assignor had.
• The assignment usually gives the assignee the right to receive the assignor's share of the profits — but not necessarily the other rights.

The Rights and Limitations of the Assignor

• In many states, all LLC members have the right to assign membership interest.
• In most states, assigning interest does not necessarily lead to forfeiting of voting and management rights and can be temporary. Texas law, on the other hand, states that the assignor ceases to be a member of the LLC after the assignment.

The Rights and Limitations of Other Members

• All members of the LLC have to be notified of any type of assignment.
• Some states require the assignment of interest to be approved by all members.
• The new person who has been assigned interest does not necessarily become a member even if the assigner has decided to leave the LLC. The other members can decide whether to admit the assignee as a member or not. Should a member assign interest without the input of other members, the interest is normally limited to financial benefits.
• In a two-member LLC, one member can easily transfer the interest to the other. 

The Membership Interest Assignment Document

The LLC's operating agreement should explain the rights of members on issues of transfer of interest, and the agreement should be followed during the assignment process. The Membership Interest Assignment acts as a record of the agreement, and the LLC normally keeps a copy of the document. The law in most states does not provide a formal template of the Membership Interest Assignment document but lists what should be included in the document. The document should have the following details:

• Percentage of interest that will go to the assignee 
• Whether the assignee will have voting rights
• The signatures of the assignor and the assignee

Assignment of Interest Versus Selling Ownership Stake

The assignment of interest is typically different from selling the ownership stake . Selling a member's ownership stake in the LLC requires unanimous approval by the other members. A departing member may also assign his membership to another member.

If a member is being paid to transfer interest, this is treated for tax purposes as a sale, and the selling member's gains might be liable to capital gains tax. Even if a departing member is not paid for his interest, if the departure results in the assignee getting the departing members' share of liability, the departure is seen as an exchange or sale.

Assignment of Interest Versus Abandoning an LLC

If a member wants to withdraw interest in an LLC, he/she can choose to simply legally abandon the LLC in most states. The abandoning member should give some kind of notice to the other members explaining that he is abandoning membership. Abandoning membership does not usually require the approval of other members.

Abandoning an LLC does not absolve the member of liability he/she may have incurred when still a member.

If you need help with the assignment of interest in LLCs, you can  post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

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Content Approved by UpCounsel

• LLC Membership Interest Transfer Agreement
• What Is the Definition of Assigns
• Assignment of Interest
• Assignment Law
• Assignment of Interest Form
• Assignment of Rights Example
• Assignment of Rights and Obligations Under a Contract
• Assignment Agreement Definition
• Legal Assignment
• Partial Assignment of Contract

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What Is an Assignment of Leases and How Can a Real Estate Lawyer Help?

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• ⇒ How A Lawyer Can Help with Landlord and Tenant Disagreements

Assigning a Lease

Assignments explained, more information on assignments.

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Command Senior Enlisted Leader Assignment

The Office of the Senior Enlisted Advisor to the Chairman of the Joint Chiefs of Staff announced today the following assignment:

Navy Command Master Chief Jason "JR" Reynolds, currently assigned as command master chief, Office of Naval Intelligence, Washington, D.C., has been selected to replace Army Command Sgt. Maj. Thomas Baird as command senior enlisted leader for the National Geospatial-Intelligence Agency, Springfield, Virginia.

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