florida assignment of contract form

Can a Buyer Assign or Transfer Rights in Florida Real Property to Third Person Before Closing?

by Larry Tolchinsky | Closings , Florida Law , Florida Real Estate , Real Estate Title | 1 comment

In Florida, the closing process normally begins with a written sales contract where a seller commits to sell his or her home and a buyer commits to buying the property. That document creates an equitable interest in the property for the buyer.

What some buyers and sellers may not realize is that after the parties sign the contract, the parties can change (most standard residential contracts for the sale and purchase of Florida real estate contain a provision related to the buyer’s right to assign the contract). Under Florida law, the buyer can legally transfer his or her rights in the pending sale to an independent third party.

Which means, the deal may go through with a buyer who is different from the one who signed the contract (the assignment provision in most standard contracts also contemplate whether or not the original buyer will be released from any liability under the contract).

Florida Condos Are Still a Popular Real Estate Purchase

Purchasers, Executors, Heirs and Assigns

For many years, it has been generally accepted in Florida law that a land sale contract can be assigned. Sometimes, this is easily determined because either the section for assignment is checked or the language of the contract identifies the buyer as the “ purchaser and/or assigns ” when describing the person who is buying the property. Either one of these options places a seller on notice that he or she may be seeing a different face at the closing table.

Other language that may be used in the sales contract: “ heirs, executors, or assigns .” This language is also notice to the seller that the buyer may opt to assign the deal before it closes. (See – Shirley v. Lake Butler Corp., 123 So. 2d 267  – These words, heirs, executors, or assigns, do not require the seller to approve the assignment in order to make the assignment effective.)

When Can’t a Sales Contract Be Assigned by the Buyer?

The key here is that the sales contract is not personal to the buyer under its terms or by its nature; if it is, then there can be no assignment by the purchaser.

As explained by the Florida Supreme Court, real estate buyers will be allowed to assign (sell) their contracts to someone else whenever they choose to do so — unless (1) there is language in the contract that prohibits it in that particular deal; (2) if the assignment would violate public policy in some way; or (3) if it would violate some state or federal law or statute.

One other possible limitation on assigning a real estate sales contract (assuming the contract is silent on the issue of it being assignable): it may not be assigned if the seller has agreed to sell to this particular buyer because of an explicit reliance upon that buyer’s personal credit to cover the transaction. Walton Land & Timber Co. v. Long, 135 Fla. 843, 185 So. 839 (1939).

What Are the Assignee’s Duties?

If the buyer enters into an assignment with a third party, the deal to sell the property as described in the original sales contract does not change. The buyer is subject to a legally enforceable agreement when he or she signs the sales contract to buy that home or condo.

If the buyer wants to transfer the contract to an assignee, that first contract is not changed insofar as the rights and duties of the original parties (unless the seller agrees, in writing, to allow the buyer to be released from liability).  The assignee needs to make sure that all the duties required by the buyer under the sales contract are performed in order to close the deal.

The assignee takes on the legal responsibility of tendering to the seller the purchase price at the time stated in the sales contract. He or she will need to perform as the buyer would have been required to perform under the agreement.

If the assignee doesn’t fulfill his or her duties, then the seller can argue that the sales contract has been breached (thereby allowing the seller to retain the buyers deposits and seek any other remedies set forth in the contract).

As long as the seller is ready, willing and able to provide the deed to the original buyer, the seller should win this argument.

What Are the Assignee’s Rights?

Once there is a legally binding assignment in place, the assignee has rights under the sales contract. However, the terms of the deal do not change just because there is an assignee involved now.

The assignee does not have any more rights than the buyer had at the get-go. The buyer cannot transfer something to the assignee that he or she didn’t have!

Furthermore, the assignee will be subject to the rights of the seller in the original sales contract. If the seller expects something to be done by the buyer in the contract, then the seller can legally expect that the assignee will perform that task.

If the seller has defenses against the buyer under the sales agreement, then those defenses will be able to be asserted against the assignee, too.

Bottom line, if a buyer and a third party decide to enter into their own agreement where the buyer assigns his interest in a pending sales contract to buy a home or condo in Florida to the third party, great. But that assignee will not stand in a more favorable legal position than the buyer just because he’s a third party who’s come into the deal under an assignment.

Note: that third party will also get the right to end the deal, if the buyer had a legal right to do so. As the assignee, if the buyer has a right to seek recession of that sales contract, then the third party assignee will as well. For instance, if the seller cannot provide clear legal title, then the assignee has a right to rescind the deal just as the original buyer could have done.

What Are the Seller’s Duties After the Buyer’s Assignment?

When a buyer assigns his rights to a third party, what does the seller have to do? Well, the seller is not usually a party to the assignment (unless the contract requires the seller to approve the assignment). The assignment is an agreement usually between the buyer (the ”assignor”) and a third party (the ”assignee”).

Accordingly, the seller has no responsibility to determine who the assignee is in order to close the deal. All the seller has to do is meet the terms of the sales agreement. It’s up to the buyer and his or her assignee to work out the details of getting to the closing table at the time and date set forth in the sales contract. See,  Pierce & Stevenson v. Jones, 109 Fla. 517, 147 So. 842, 88 A.L.R. 192 (1933).

Buyer Needs to Make Sure There’s an Effective Assignment

For some buyers who enter into an assignment the seller may allow the buyer to be free of the obligations set forth in the sales contract. If not, the buyer will remain responsible under the real estate contract to fulfill the obligations that he or she agreed upon at the time the contract was first signed.

Any release of the buyer’s obligations by the seller has to be specifically stated and in writing.

For example, if a buyer signs a real estate purchase agreement and inserts language that he or she will be taking title to the property in the name of his or her wholly owned corporation, that’s not creating any kind of assignment from the buyer to the corporation. That’s creating a condition in the sales contract, but it’s not an assignment by the buyer to a third party (it doesn’t relieve the buyer from liability under the contract).

The buyer needs to have something in writing stating that the seller is relieving the buyer of his or her obligations under the sales contract and the buyer’s wholly-owned corporation will be liable in order for there to be an effective release of liability of the buyer. See, Greater New York Corp. v. Cenvill Miami Beach Corp ., 620 So. 2d 1068 (Fla. 3d DCA 1993).

Having a Florida Real Estate Lawyer Can Help Your Residential Closing

Whether you are a seller, a buyer, or an assignee in a deal to sell a Florida home or condo, things can get complicated very fast and parties can end up confused and upset. Closings can be delayed. Some may never happen.

Having the advice of an experienced Florida real estate lawyer can be of great help here. Moreover, having an attorney review the situation before the deal is finalized at closing isn’t as expensive as some assume it to be.

See: 19 Reasons to Hire a Real Estate Lawyer When Buying or Selling Florida Real Estate

A good piece of advice if you are faced with an assignment issue, is to at least speak with an experienced Florida real estate lawyer to learn about your rights. Most real estate lawyers, like Larry Tolchinsky, offer a free initial consultation (over the phone or in person, whichever you prefer) to answer your questions.  

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What is impossible to locate anywhere online is how you are legally able to market a property that you are trying to assign. I understand no MLS, but FB, Craiglist, Zillow, Signage? Help.

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• Real Estate Purchase Agreement

Florida Real Estate Purchase Agreement

Last Updated: December 15, 2023 by Phil Ahn

The Florida residential real estate purchase agreement (“residential purchase and sale agreement”) sets forth the terms and conditions by which both buyer and seller are bound to until the closing of the residential sale. The agreement covers details such as price, earnest money, financing, property condition, disclosures, and other contingencies.

Do Sellers in Florida Have to Disclose Property Defects?

Florida  does  require real estate sellers to disclose any material defects. Certain states do not require the seller to disclose all defects (caveat emptor), meaning the buyer assumes the responsibility to conduct a real property inspection to seek out any potential defects with the property. In those states, if a buyer fails to conduct a proper examination, they may not have a legal alternative to reverse the real estate transaction.   

Required Seller Disclosures in Florida

Along with any material defects with the property, sellers in Florida will also need to provide the following:

• Sellers Property Disclosure Statement . Florida property sellers are required to disclose facts materially affecting the value or desirability of the property which are not readily observable and are not known to the buyer.
• Lead-Based Paint Disclosure . Any home that was constructed earlier than 1978  must  come with a disclosure upon the transfer of the property that includes any data concerning the presence of lead on the premises as well as educational materials that communicate the risks involved with coming into contact with the harmful substance.
• Property Tax Disclosure Summary . Sellers are required to provide a statement notifying potential buyers that property taxes may increase and that they can contact an appraiser for more information if they so wish.
• Association Membership . If an individual is selling their unit in a common interest community such as a condominium project, they are required to submit a disclosure summary prior to carrying out the contract that notifies the buyer that they will have to become a member of the Homeowners’ Association.
• Coastal Properties . If the property being sold is located partially or completely seaward of the coastal construction control line, the seller is obligated to present the prospective buyer with a disclosure statement expressing this information.
• Nondeveloper Disclosure . Sellers of condominium units must attach this disclosure providing the purchaser with the necessary documentation describing how the property or association operates.
• Radon Gas . A seller must attach a statement conveying the dangers of radon gas.

Frequently Asked Questions

Purchase agreements in other states.

Mississippi

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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The Florida Contractor’s Guide to AOBs: Laws, Requirements, and FAQs

In Florida, the use of an assignment of benefits (AOB) has become increasingly popular as a means of streamlining property insurance claims. They also have come under fire from insurance carriers, and as part of the recent sweeping property insurance reforms in Florida, the Florida legislature banned the future use of AOBs in property claims. But they’re not gone yet — at least for insurance policies issued before 2023.

But even for those pre-2023 policies, Florida law extensively regulates the use of AOBs. Whether you’re a roofer, restoration pro, or general contractor, you need to know about these rules and regulations if you want to legally use an AOB in Florida. The cost of violating these rules is high, often meaning the AOB is void and entirely unenforceable! So read on to make sure you comply with Florida AOB law.

Table of Contents

How Recent Property Insurance Reforms in Florida Affect AOBs

In December 2022, the Florida legislature enacted Senate Bill 2-A, a game-changing law that transformed the property insurance landscape in Florida. Among other major changes to Florida property insurance and claims, SB 2-A effectively outlawed the future use of assignment of benefits in property insurance claims. Under the new reforms, any homeowner’s insurance policy or commercial property insurance policy that issued on or after January 1, 2023 is not eligible for an AOB.

In other words, due to the 2022 Florida property insurance reforms, neither homeowners nor business property owners can enter an AOB if their insurance policy issued on or after January 1, 2023 .

Is an Assignment of Benefits Enforceable under Florida Law?

Maybe. The answer depends on whether the underlying policy issued before January 1, 2023, and whether the assignment of benefits complies with all the requirements of Section 627.7152, Florida Statues. If the answer to either of those questions is no, then the AOB is not enforceable for property claims in Florida.

Requirements for an Enforceable AOB in Florida

The issue of whether an AOB in Florida is enforceable is complicated. To make the issue more understandable, we’ve broken it down in the sections below.

The Underlying Policy Must Have Issued Before January 1, 2023

As we’ve said already, the threshold question for whether an AOB is enforceable in Florida is when the applicable policy issued. If the policy issued on or after January 1, 2023, that’s the end of the story — any AOB based on that policy is unenforceable, full stop.

The AOB contract must meet the requirements of Section 627.7152(2), Florida Statutes.

If the insurance policy issued before 2023, then the AOB still must comply with the rest of Section 627.7152, Florida Statutes. In particular, under Section 627.7152(2)(a), an assignment of benefits is not enforceable in Florida unless the AOB contract meets all of the following requirements:

The AOB contract must be in writing and signed by both parties.

Florida law requires that an AOB contract “[b]e in writing and executed by and between the assignor and the assignee.” Section 627.7152(2)(a)(2), Florida Statutes .

This one is straightforward: An AOB isn’t enforceable in Florida unless both your company and the policyholder sign a written AOB contract.

The AOB contract must explicitly allow the policyholder to rescind the AOB without penalty within certain periods

Florida law requires that an AOB contract “[c]ontain a provision that allows the assignor to rescind the assignment agreement without a penalty or fee by submitting a written notice of rescission signed by the assignor to the assignee within 14 days after the execution of the agreement, at least 30 days after the date work on the property is scheduled to commence if the assignee has not substantially performed, or at least 30 days after the execution of the agreement if the agreement does not contain a commencement date and the assignee has not begun substantial work on the property.” Section 627.7152(2)(a)(3), Florida Statutes .

Don’t forget, this provision doesn’t just give a policyholder rights to rescind an AOB within the time periods stated above — it requires that the AOB contract actually contain the statutory language giving the policyholder those rights.

Also, the AOB contract needs to include all of this statutory language. At least one court has suggested that if even part of this language is missing, then the AOB does not meet the requirements of Section 627.7152, Florida Statues, and is therefore invalid and unenforceable. JPJ Servs. LLC v. New Hampshire Ins. Co. , No. 21-14329-CIV, (S.D. Fla. June 3, 2022) .

The AOB contract must explicitly require you to notify the insurance company about the AOB

Florida law requires that an AOB contract “[c]ontain a provision requiring the assignee to provide a copy of the executed assignment agreement to the insurer within 3 business days after the date on which the assignment agreement is executed or the date on which work begins, whichever is earlier. Delivery of the copy of the assignment agreement to the insurer may be made: a. By personal service, overnight delivery, or electronic transmission, with evidence of delivery in the form of a receipt or other paper or electronic acknowledgment by the insurer; or b. To the location designated for receipt of such agreements as specified in the policy.” Section 627.7152(2)(a)(4), Florida Statutes .

When the AOB contract is signed, it must contain an itemized, per-unit cost estimate of the repair work.

Florida law requires that an AOB contract “[c]ontain a written, itemized, per-unit cost estimate of the services to be performed by the assignee.” Section 627.7152(2)(a)(5), Florida Statutes .

Two important notes here.

First, you need to attach the estimate to the AOB before the policyholder signs the AOB . Providing an estimate to the policyholder after the parties sign the AOB puts the AOB at risk of being attacked as unenforceable. Several Florida contractors have learned this the hard way. In one case, a court held that providing the estimate to the property owner just one day after the parties had signed the AOB rendered it unenforceable. JPJ Servs. LLC v. New Hampshire Ins. Co. , No. 21-14329-CIV (S.D. Fla. June 3, 2022) .

Second, the estimate needs to be detailed . A top-line price for the work won’t suffice. Nor will a standard pricing list for products or services. In fact, a Florida appellate court has specifically decided that a standard pricing list for remediation services attached to an AOB did not qualify as an “itemized, per-unit cost estimate” under Section 627.7152(2)(a)(5) and therefore the AOB was void and unenforceable. Air Quality Experts Corp. v. Fam. Sec. Ins. Co., 351 So. 3d 32 (Fla. Dist. Ct. App. 2022) .

The AOB contract must be limited to repairs or mitigation for dwellings and structures

Florida law provides that the AOB contract “must relate only to work to be performed by the assignee for services to protect, repair, restore, or replace a dwelling or structure or to mitigate against further damage to such property.” Section 627.7152(2)(a)(6), Florida Statutes .

The AOB contract must contain a very specific notice to the policyholder

Specifically, Florida law requires that the AOB contract contain the following notice in 18-point uppercase and boldfaced type:

YOU ARE AGREEING TO GIVE UP CERTAIN RIGHTS YOU HAVE UNDER YOUR INSURANCE POLICY TO A THIRD PARTY, WHICH MAY RESULT IN LITIGATION AGAINST YOUR INSURER. PLEASE READ AND UNDERSTAND THIS DOCUMENT BEFORE SIGNING IT. YOU HAVE THE RIGHT TO CANCEL THIS AGREEMENT WITHOUT PENALTY WITHIN 14 DAYS AFTER THE DATE THIS AGREEMENT IS EXECUTED, AT LEAST 30 DAYS AFTER THE DATE WORK ON THE PROPERTY IS SCHEDULED TO COMMENCE IF THE ASSIGNEE HAS NOT SUBSTANTIALLY PERFORMED, OR AT LEAST 30 DAYS AFTER THE EXECUTION OF THE AGREEMENT IF THE AGREEMENT DOES NOT CONTAIN A COMMENCEMENT DATE AND THE ASSIGNEE HAS NOT BEGUN SUBSTANTIAL WORK ON THE PROPERTY. HOWEVER, YOU ARE OBLIGATED FOR PAYMENT OF ANY CONTRACTED WORK PERFORMED BEFORE THE AGREEMENT IS RESCINDED. THIS AGREEMENT DOES NOT CHANGE YOUR OBLIGATION TO PERFORM THE DUTIES REQUIRED UNDER YOUR PROPERTY INSURANCE POLICY.

Section 627.7152(2)(a)(6), Florida Statutes .

In the AOB contract, you must indemnify the policyholder.

Under Florida law, the AOB must “[c]ontain a provision requiring the assignee to indemnify and hold harmless the assignor from all liabilities, damages, losses, and costs, including, but not limited to, attorney fees.” Section 627.7152(2)(a)(7), Florida Statutes .

The AOB contract cannot contain a penalty or fee for rescission, processing checks, cancelling the agreement, or administrative costs.

Under Florida law, “an assignment agreement may not contain: 1. A penalty or fee for rescission under subparagraph (a)3.; 2. A check or mortgage processing fee; 3. A penalty or fee for cancellation of the agreement; or 4. An administrative fee.” Section 627.7152(2)(b), Florida Statutes .

The Law Requires You to Cooperate with Insurance Carriers

Florida law set out very specific actions that a roofer, mitigation pro, restoration specialist, or other contractor working under an AOB must take when dealing with an insurance company. The requirements are specific enough that it’s worth reproducing the statutory language directly:

A [contractor, roofer, restoration pro, etc.] (a) Must provide the assignor with accurate and up-to-date revised estimates of the scope of work to be performed as supplemental or additional repairs are required. (b) Must perform the work in accordance with accepted industry standards. (c) May not seek payment from the assignor exceeding the applicable deductible under the policy unless the assignor has chosen to have additional work performed at the assignor’s own expense. (d) Must, as a condition precedent to filing suit under the policy, and, if required by the insurer, submit to examinations under oath and recorded statements conducted by the insurer or the insurer’s representative that are reasonably necessary, based on the scope of the work and the complexity of the claim, which examinations and recorded statements must be limited to matters related to the services provided, the cost of the services, and the assignment agreement. (e) Must, as a condition precedent to filing suit under the policy, and, if required by the insurer, participate in appraisal or other alternative dispute resolution methods in accordance with the terms of the policy. Section 627.7152(4), Florida Statutes .

Limited Reimbursements for Emergency Repair AOBs

Contractors should know that Florida law limits insurance reimbursements for emergency repairs, such as roof tarping and water mitigation. Specifically, Section 627.7152(2)(c), Florida Statutes , caps insurance reimbursements for AOB repairs made under “urgent or emergency circumstances” at $3,000 or 1 percent of the applicable Coverage A limit, whichever is greater. Section 627.7152(2)(d), Florida Statutes . In addition, if the AOB contract provides for reimbursement beyond these limits, the AOB is invalid and unenforceable. The statute defines “urgent or emergency circumstances” as “a situation in which a loss to property, if not addressed immediately, will result in additional damage until measures are completed to prevent such damage.”

Collecting Against Policyholders Prohibited

By signing an AOB, you permanently waive your right to collect from or sue the policyholder for payments owed for services described in the AOB. This waiver of your right to collect or sue is fundamental to the AOB, and specifically covered by statutes. In Florida, the waiver applies even if the policyholder rescinds the AOB or the AOB is later held to be invalid.

There are a few important exceptions to the general waiver above. Specifically, a policyholder is responsible for:

• Any applicable deductible.
• Any betterment ordered and performed that is approved by the named insured.
• Any contracted work performed before the assignment agreement is rescinded.

Section 627.7152(7), Florida Statutes .

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Assignment of Contract – Assignable Contract Basics for Real Estate Investors

What is assignment of contract? Learn about this wholesaling strategy and why assignment agreements are the preferred solution for flipping real estate contracts.

Beginners to investing in real estate and wholesaling must navigate a complex landscape littered with confusing terms and strategies. One of the first concepts to understand before wholesaling is assignment of contract, also known as assignment of agreement or “flipping real estate contracts.”  

An assignment contract is the most popular exit strategy for wholesalers, and it isn’t as complicated as it may seem. What does assignment of contract mean? How can it be used to get into wholesaling? Here’s what you need to know.

What Is Assignment of Contract?

How assignment of contract works in real estate wholesaling, what is an assignment fee in real estate, assignment of agreement pros & cons, assignable contract faqs.

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Assignment of real estate purchase and sale agreement, or simply assignment of agreement or contract, is a real estate wholesale strategy that facilitates a sale between the property owner and the end buyer.

This strategy is also known as flipping real estate contracts because that’s essentially how it works:

• The wholesaler finds a property that’s already discounted or represents a great deal and enters into a contract with the seller,
• The contract contains an assignment clause that allows the wholesaler to assign the contract to someone else (if they choose to!), then
• The wholesaler can assign the contract to another party and receive an assignment fee when the transaction closes.

Assignment of contract in real estate is a popular strategy for beginners in real estate investment because it requires very little or even no capital. As long as you can find an interested buyer, you do not need to come up with a large sum of money to buy and then resell the property – you are only selling your right to buy it .

An assignment contract passes along your purchase rights as well as your contract obligations. After the contract assignment, you are no longer involved in the transaction with no right to make claims or responsibilities to get the transaction to closing.

Until you assign contract to someone else, however, you are completely on the hook for all contract responsibilities and rights.

This means that you are in control of the deal until you decide to assign the contract, but if you aren’t able to get someone to take over the contract, you are legally obligated to follow through with the sale .

Assignment of Contract vs Double Closing

Double closing and assignment of agreement are the two main real estate wholesaling exit strategies. Unlike the double closing strategy, an assignment contract does not require the wholesaler to purchase the property.

Assignment of contract is usually the preferred option because it can be completed in hours and does not require you to fund the purchase . Double closings take twice as much work and require a great deal of coordination. They are also illegal in some states.

Ready to see how an assignment contract actually works? Even though it has a low barrier to entry for beginner investors, the challenges of completing an assignment of contract shouldn’t be underestimated. Here are the general steps involved in wholesaling.

Step #1. Find a seller/property

The process begins by finding a property that you think is a good deal or a good investment and entering into a purchase agreement with the seller. Of course, not just any property is suitable for this strategy. You need to find a motivated seller willing to accept an assignment agreement and a price that works with your strategy. Direct mail marketing, online marketing, and checking the county delinquent tax list are just a few possible lead generation strategies you can employ.

Step #2: Enter into an assignable contract

The contract with the seller will be almost the same as a standard purchase agreement except it will contain an assignment clause.

An important element in an assignable purchase contract is “ and/or assigns ” next to your name as the buyer . The term “assigns” is used here as a noun to refer to a potential assignee. This is a basic assignment clause authorizing you to transfer your position and rights in the contract to an assignee if you choose.

The contract must also follow local laws regulating contract language. In some jurisdictions, assignment of contract is not allowed. It’s becoming increasingly common for wholesalers to assign agreements to an LLC instead of an individual. In this case, the LLC would be under contract with the seller. This can potentially bypass lender objections and even anti-assignment clauses for distressed properties. Rather than assigning the contract to someone else, the investor can reassign their interest in the LLC through an “assignment of membership interest.”

Note: even the presence of an assignment clause can make some sellers nervous or unwilling to make a deal . The seller may be picky about whom they want to buy the property, or they may be suspicious or concerned about the concept of assigning a contract to an unknown third party who may or may not be able to complete the sale.

The assignment clause should always be disclosed and explained to the seller. If they are nervous, they can be assured that they will still get the agreed-upon amount.

Step #3. Submit the assignment contract for a title search

Once you are under contract, you must typically submit the contract to a title company to perform the title search. This ensures there are no liens attached to the property.

Step #4. Find an end buyer to assign the contract

Next is the most challenging step: finding a buyer who can fulfill the contract’s original terms including the closing date and purchase price.

Successful wholesalers build buyers lists and employ marketing campaigns, social media, and networking to find a good match for an assignable contract.

Once you locate an end buyer, your contract should include earnest money the buyer must pay upfront. This gives you some protection if the buyer breaches the contract and, potentially, causes you to breach your contract with the seller. With a non-refundable deposit, you can be sure your earnest money to the seller will be covered in a worst-case scenario.

You can see an assignment of contract example here between an assignor and assignee.

Step #5. Receive your assignment fee

The final step is receiving your assignment fee. This fee is your profit from the transaction, and it’s usually paid when the transaction closes.

The assignment fee is how the wholesaler makes money through an assignment contract. This fee is paid by the end buyer when they purchase the right to buy the property as compensation for being connected to the original seller. Assignment contracts should clearly spell out the assignment fee and how it will be paid.

An assignment fee in real estate replaces the broker or Realtor fee in a typical transaction as the assignor or investor is bringing together the seller and end buyer.

The standard real estate assignment fee is $5,000 . However, it varies by transaction and calculating the assignment fee may be higher or lower depending on whether the buyer is buying and holding the property or rehabbing and flipping.

The assignment fee is not always a flat amount. The difference between the agreed-upon price with the seller and the end buyer is the profit you stand to earn as the assignor. If you agreed to purchase the property for $150,000 from the seller and assign the contract to a buyer for $200,000, your assignment fee or profit would be $50,000.

In most cases, an investor receives a deposit when the Assignment of Purchase and Sale Agreement is signed with the rest paid at closing.

Be aware that assignment agreements can have a bad reputation . This is usually the case when the end buyer and seller are unsatisfied, realizing they could have sold higher or bought lower and essentially paid thousands to an investor who never even wanted to buy the property.

Opting for the standard, flat assignment fee is much more readily accepted by sellers and buyers as it’s comparable to a real estate agent’s commission or even much lower and the parties can avoid working with an agent.

Real estate investors enjoy many benefits of an assignment of contract:

• This strategy requires little or no capital which makes it a popular entry to wholesaling as investors learn the ropes.
• Investors are not added to the title chain and never own the property which reduces costs and the amount of time the deal takes.
• An assignment of agreement is easier and faster than double closing which requires two separate closings and two sets of fees and disclosures.
• Wholesaling can be a great tool to expand an investor’s network for future opportunities.

As with most things, there are important drawbacks to consider. Before jumping into wholesaling and flipping real estate contracts, consider the downsides .

• It can be difficult to work with sellers and buyers who are not familiar with wholesaling or assignment agreements.
• Some sellers avoid or decline assignment of contract offers because they are suspicious of the arrangement, think it is too risky, or want to know who they are selling to.
• There is a limited time to find an end buyer. Without a reliable buyer’s list, it can be very challenging to find a viable end buyer before the closing date.
• The end buyer may back out at the last minute. This may happen if they do not have owner’s rights until the contract is assigned or they do not want to pay an assignment fee.
• Not all properties are eligible for wholesaling like HUD and REO properties. There may be anti-assignment clauses or other hurdles. It is possible to get around this by purchasing the property with an LLC which can then be sold, but this is a level of complication that many wholesalers want to avoid.
• Assignors do not have owner’s rights. When the property is under contract, investors cannot make repairs or improvements. This makes it harder to assign a contract for a distressed property in poor condition.
• It can be hard to confirm an end buyer is qualified. The end buyer is responsible for paying the agreed upon price set by the seller and assignor. Many lenders do not handle assignment agreements which usually means turning to all-cash end buyers. Depending on the market, they can be hard to find.

In the worst-case scenario, if a wholesaling deal falls through because the end buyer backs out, the investor or assignor is still responsible for buying the property and must follow through with the purchase agreement. If you do not, you are in breach of contract and lose the earnest money you put down.

To avoid this worst-case scenario, be prepared with a good buyer’s list. You should only put properties under contract that you consider a good deal and you can market to other investors or homeowners. You may be able to get more time by asking for an extension to the assignment of contract while you find another buyer or even turn to other wholesalers to see if they have someone who would be a good fit.

What is the difference between assignor vs assignee?

In an assignment clause, the assignor is the buyer who then assigns the contract to an assignee. The assignee is the end buyer or final buyer who becomes the owner when the transaction closes. After the assignment, contract rights and obligations are transferred from the assignor to the assignee.

What Is an assignable contract?

An assignable contract in real estate is a purchase agreement that allows the buyer to assign their rights and obligations to another party before the contract expires. The assignee then becomes obligated to meet the terms of the contract and, at closing, get title to the property.

Is Assignment of Agreement Legal?

Assignment of contract is legal as long as state regulations are followed and it’s an assignable contract. The terms of your agreement with the seller must allow for the contract to be assumed. To be legal and enforceable, the following general requirements must be met.

• The assignment does not violate state law or public policy. In some states and jurisdictions, contract assignments are prohibited.
• There is no assignment clause prohibiting assignment.
• There is written consent between all parties.
• The property does not have restrictions prohibiting assignment. Some properties have deed restrictions or anti-assignment clauses prohibiting assignment of contract within a specific period of time. This includes HUD properties, short sales, and REO properties which usually prohibit a property from being resold for 90 days. There is potentially a way around these non-assignable contracts using an LLC.

Can a non-assignable contract still be assigned?

Even an non-assignable contract can become an assignable contract in some cases. A common approach is creating an agreement with an LLC or trust as the purchaser. The investor can then assign the entity to someone else because the contractual rights and obligations are the entity’s.

Assignment agreements are not as complicated as they may sound, and they offer an excellent entry into real estate investing without significant capital. A transaction coordinator at Transactly can be an invaluable solution, no matter your volume, to keep your wholesaling business on track and facilitate every step of the transaction to closing – and your assignment fee!

Adam Valley

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Florida Promissory Notes: Requirements, Types & Differences

Table of Contents

The Purpose of Promissory Notes in Florida Law

The purpose of a Florida promissory note is to create a legally enforceable financial instrument that states the key terms to a loan agreement. As the name suggests, a promissory note involves a “promise” from the borrower under the note to repay the stated amount of money to the lender. 

Secured vs Unsecured Promissory Note, What’s the Difference?

A Florida promissory note can be either secured or unsecured. A secured promissory note is one that is backed by collateral (e.g., real estate, a business interest, intellectual property, or some other personal property held by the borrower). An unsecured promissory note has no collateral. 

The collateral (also known as a security interest) provides the lender with some recourse in the event of defaults. The lender can retain or sell the underlying property used as collateral to recover any losses from the default. 

An unsecured promissory note is simply one that does not have any attached collateral or security interest. If a borrower fails to meet its repayment requirements, the lender does not have any inherent property interests and will generally have to obtain a court judgment for recourse. 

Using a secured versus unsecured promissory note will be an important business decision often determined by the relationship between the borrower and lender and the amount of the note. In many cases, having a promissory note secured by collateral is preferable. The collateral can help a lender prevent losses in the event of a borrower default due to late payment or other breach of contract. 

Different Types of Promissory Note & When to Use Them

A promissory note for borrowing money will have different types depending on the context of the loan agreement. The key piece of this context usually has to do with the reason for the loan and the borrower’s intended use for the funds. That reason is often either personal or commercial in nature. 

Personal Promissory Notes

Personal promissory notes are those between individuals (e.g., family members or friends) who would like to help the borrower financially but do not want to gift money. You might use a personal promissory note to pay for things like school, a car, a down payment on real property or some other consumer use.

Commercial Promissory Notes 

A commercial promissory note is standard in many business deals that involve financing. The borrower and lender are often business entities rather than individuals and the purpose is in furtherance of some commercial goal. Common types of commercial notes include: 

• Financing the purchase of real estate 
• Business loans (i.e., funds to start or continue operation of a commercial venture)
• Investments and raising capital (i.e., a lender may loan funds to a business and receive an ownership interest in the business in addition to repayment of the loan as consideration). 

Commercial promissory notes tend to be sophisticated and are often paired with other agreements or legal documents of a business deal. For example, you may have a security agreement, asset purchase agreement, NDA, shareholder agreement, and other written agreements that accompany the note. 

What Are the Florida Promissory Note Requirements?

A promissory note Florida requires several terms stated clearly in the written instrument that explain the key rights and obligations for both the lender and borrower. Some of these requirements include: 

• Interest rate and how it accrues (e.g., per annum)
• Principal sum (i.e., the loan amount)
• Due date (This includes the due date for an installment payment and the maturity date when the borrower must repay full loan amount)
• Late fees in the event of nonpayment or late payment 
• Mailing address of the borrower and lender 

Florida Promissory Note Witness Requirements

In general, having a witness or notary public to a promissory note is a good precaution to protect the authenticity of the note in the event a party must use it as evidence to enforce its terms. 

The Cost of Reasonable Attorney’s Fees 

A promissory note should state who will cover the cost of paying reasonable attorney’s fees in the event a party has to enforce the note. In most cases, the note will state the borrower has the obligation to pay the lender’s reasonable attorney’s fees for enforcement. 

Florida Statutes That Affect Promissory Notes 

A couple of Florida laws relate to promissory notes that both lenders and borrowers should be aware of before entering into a loan agreement. For example, Florida statute has usury rates that lenders should know to avoid predatory lending practices. For loans under $500,000, interest rates cannot exceed 18 percent simple interest per annum. 

The state of Florida also has a documentary stamp tax in the amount of 35 cents for every $100 loaned up to a total amount of $2,540. 

Sample Promissory Note Florida Template 

You can download our Florida secured promissory note form for more information about what goes into a promissory note secured by collateral.  This template is only for educational purposes and you should not use it without first consulting a lawyer.

Sample unsecured promissary notes

Sample secured promissary notes, need help with promissory note florida law.

A promissory note for borrowing money is a useful instrument for a variety of financial and business arrangements. The attorneys at Cueto Law Group regularly assist clients with drafting, negotiating, and reviewing promissory notes for both personal and commercial uses. 

Contact Cueto Law Group today to schedule a consultation concerning Florida promissory notes. 

Who Is a Guarantor in a Promissory Note?

A guarantor is a person or entity (other than the borrower) who agrees to perform the borrower’s obligations under a loan agreement in the event of default such as nonpayment. Some lenders will require a guarantor for a loan because of risks that a borrower will not be able to repay.

What Is a Waiver of a Promissory Note?

In some cases, a lender may waive the obligations of the borrower under a promissory note. Often this happens with loans between friends and family members or for the restructuring of business deals. However, parties should be careful of tax consequences such as gifting or discharges of indebtedness in these cases.

Are Promissory Note Prepayments Allowed?

The terms of a promissory note should state if the borrower can make prepayments to fully repay the principal balance of a loan prior to the maturity date. Sometimes prepayments are allowed without question, but a lender may not allow for early payments.

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Legal Templates

Home Real Estate Lease Agreement

Rental and Lease Agreement Templates

Use our Lease Agreement to rent out your residential property.

Updated May 15, 2024 Written by Jana Freer | Reviewed by Susan Chai, Esq.

A lease agreement (or rental agreement) is a document that explains the terms under which a tenant rents a residential or commercial property from a landlord.

Lease agreements are legally binding contracts that explain the obligations and rights of the tenant and landlord. Even if you’re renting out a room in your house to a friend or family member, you need a lease agreement for legal protection if you encounter problems with your tenants.

Lease Agreements – By State

• Connecticut
• District of Columbia
• Massachusetts
• Mississippi
• New Hampshire
• North Carolina
• North Dakota
• Pennsylvania
• Rhode Island
• South Carolina
• South Dakota
• West Virginia
• Lease Agreements - By State
• Lease Agreements - By Type

How to Lease a Property [Landlord Lifecycle]

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Security Deposit

Lease terms to know, how to write (fill out) a lease/rental agreement, sample lease agreement, frequently asked questions, lease agreements – by type, residential lease agreement forms [for landlords].

Use this template to rent out a residential property for a fixed period of typically one year.

This agreement includes the most essential and common clauses and can be used for a house, apartment, studio, condo, duplex, townhouse, basement, or mobile home.

Standard Lease Agreement

Use this template if you don’t want to commit to renting out your property for a full year or more, but still need to protect your rights. Using a monthly lease allows you (and your tenant) to be flexible.

Month-to-Month Lease Agreement

Use this template to rent out your property for a short period of time (usually between 1–31 days), most commonly as a vacation rental. A short-term rental agreement explains to guests the rules of their stay, and what they can expect when they arrive.

Short Term (Vacation) Rental

Rent-to-Own Lease Agreement

Lease Extension Agreement

Lease Renewal Agreement

Sublease agreement forms [for tenants].

Use this template to rent out a property (or just a room) when you’re already renting the property from another landlord. For example, you may want to sublet a property if you need to move out but don’t want to break your lease.

Sublease Agreement

Use this template when you’re renting out a room in your property and need to set rules and boundaries. For example, you can use this agreement to explain how you'll divide rent and utility payments, and whether your tenant can have guests visit.

Room Rental Agreement

Roommate Agreement

Commercial lease agreement forms.

Use this template if you’re renting out an office building, retail space, restaurant, industrial facility, or any property where the tenant will operate a business.

Commercial Lease Agreement

Use this template to rent out a piece of land that does not have a property on it. A land or ground lease can have multiple purposes, including agricultural, residential, and commercial.

Land Lease Agreement

Equipment Lease Agreement

Parking Space Rental Agreement

Disclosures & addendums.

Commercial Lease Agreement Addendum

Residential Lease Agreement Amendment

Lease Agreement Amendment

Rental Inspection Checklist

Rent Receipt

Tenant Approval Letter

Tenant Rejection Letter

• Asbestos Disclosure ( Word ) – Notifty tenants of asbestos at the property (required for properties built before 1979).
• Bed Bug Addendum ( Word ) – Explain how both parties should act in case of a bedbug infestation.
• Carbon Monoxide and Smoke Detector Addendum ( Word )– State whether the landlord will provide carbon monoxide/smoke detectors and how the tenant is responsible for keeping them in good condition.
• Commercial Lease Addendum ( PDF ) – Modify an existing commercial lease or expand upon the current contract.
• Death in Rental Unit Disclosure ( Word ) – Inform the tenant if anyone previously died on the property.
• Disclosure of Lead-Based Hazard s ( PDF ) – Notify tenants of lead-based paint or other materials (required for properties built before 1978).
• Flood Hazard Area Disclosure ( Word ) – State whether the property is in a special flood hazard area.
• Foreclosure Notice ( Word ) – Inform the tenant of an impending foreclosure.
• Illegal Substance Contamination Disclosure ( Word ) – Notify the tenant if parts of the property have been contaminated due to manufacturing or storing an illicit substance (such as methamphetamine).
• Mold Disclosure ( Word ) – Notify the tenant that the property may contain mold and whether the landlord will fix it.
• Notice of Abandoned Personal Property ( Word ) – Tell the tenant they left something in the unit when they moved out and need to collect it before it’s thrown out.
• Pet Addendum ( PDF , Word ) – Let a tenant know the specific rules for having a pet on your property.
• Shared Utilities Disclosure ( Word ) – Explain how utilities are calculated and shared between multiple residents.
• Smoke-free Addendum ( PDF , Word ) – Specify whether your tenant can smoke marijuana or tobacco on your property.

Follow the steps below to rent your property easily:

Step 1 – Show Your Rental Unit to Tenants

The first step in renting out a house or an apartment is to allow people to view the property . If tenants like the property and want to move in, they will likely inquire about the rent amount and other details.

Hosting viewings can be inconvenient if you have multiple properties, so many landlords hire a property management company to show their rental units to potential tenants.

Step 2 – Give the Tenant a Rental Application Form to Fill Out

Once you agree on the rent price, the tenant should complete a rental application . This form helps the landlord screen the tenant, and it includes information such as the applicant’s:

• Current address
• Place of employment
• Income level
• Rental references

The tenant can confirm their workplace using an employment verification letter . This document is accessible for renters to show proof of income.

Typically, landlords require a small, non-refundable fee from the tenant to process the rental application.

Be aware of what you can and can’t ask on a rental application to abide by federal laws and prevent discrimination in the selection process.

Step 3 – Run a Background and Credit Check

After reviewing the tenant’s application, you should run a background check (and/or a credit check).

Running a credit check as part of the tenant-screening process can help avoid scams and problem tenants. The tenant usually pays for the cost of a credit check.

A background check shows if the applicant has a prior criminal history, and a credit check confirms whether the applicant has good or bad credit. Bad credit may signify poor financial planning, resulting in missed rent payments.

Although these checks help you avoid dealing with bad tenants, you shouldn’t base your decision to rent the property solely on the results.

Many states have strict guidelines on tenant discrimination. Refusing tenancy because of minor criminal offenses or bad credit may justifiably violate federal anti-discrimination law.

Step 4 – Check the Tenant’s References

Next, you must check the tenant’s references in their rental application form mentioned in step 2.

You should contact the references and ask questions such as:

• Did the applicant pay their rent and utilities on time?
• Were there any noise complaints at the tenant’s previous apartment?
• Have the police ever been called to the tenant’s last rental unit?
• Would you consider renting to this person again?

Rental references are usually from current or previous landlords and can give insight into the tenant’s character and behavior.

Step 5 – Create a Lease Agreement

Once you’re happy to rent your property to a tenant, you must create a lease/rental agreement in the correct format.

You make a lease agreement by writing it yourself from scratch, filling in a blank lease agreement template that includes all the necessary clauses, or using a lease agreement builder to create a lease specific to your property.

Remember to include the following:

• The move-in date
• The monthly rent payment amount
• When the rent is due each month
• How you’ll handle late rent payments
• Who should pay or manage the utilities
• The penalties, if any, for breaking a lease

Both parties sign the agreement after you create the lease contract and review all the details with the tenant. You may need to calculate prorated rent depending on when the tenant moves in.

Step 6 – Hand Over the Keys

Once the lease agreement is completed and signed, give the tenant the keys to move into the property.

Remember to conduct a unit walkthrough alongside the tenant to finish the process. Bring a rental inspection checklist and document the property’s condition before the tenant moves in.

Step 7 – Renew or Terminate the Lease

Allow the tenant to remain on the property until the lease termination date. If you thought your tenant was responsible and you want to renew their lease (and they also want to renew), use a lease renewal agreement to renew their tenancy.

If you don’t want to renew the lease, use a lease termination letter . 

Landlord and Tenant Laws by State

Federal law recognizes that landlords and tenants have individual legal rights and obligations .

Find out what the law in your state says about your rights using the table below, or check the following specific laws for your property:

Landlord-Tenant Acts

Here are the general landlord-tenant acts by state:

Landlord’s Access

Tenants have the right to privacy when they rent a property. However, there may be reasons why a landlord needs to access the property , such as for maintenance or inspections.

Nearly every state requires a landlord to give advance notice to their tenants before accessing a rental unit. Use the table below to check how much notice you need to give in your state and review the relevant law:

Each state regulates the maximum amount of money a landlord can collect as a security deposit from a tenant. Some states also require landlords to return security deposits to tenants within a specific time (potentially with interest).

Usually, a landlord can deduct the following costs from the tenant’s security deposit:

• Unpaid rent
• Cleaning costs
• Key replacement costs
• Cost to repair damages above ordinary wear and tear
• Any other amount legally allowable under the lease

Use the table below to see the maximum security deposit limit in your state, whether it needs to be held in a separate account, and how much time you have to refund it after the lease ends:

Here are some helpful definitions for the legal language commonly present in lease and rental agreement forms:

• Access : The right to enter a property.
• Accidents : Artificial or naturally occurring events that may damage a property (fire, flood, earthquake, etc.).
• Alterations : Modifications made to a property.
• Appliances : Standard home equipment like a refrigerator or dishwasher.
• Assignment : The transfer of an interest in a lease.
• Attorney Fees : A payment made to a lawyer.
• Condemnation : The government is seizing private property for a public purpose, such as highway construction.
• Default : When a breach of contract occurs and persists, such as not paying rent or violating other terms of a rental agreement.
• Furniture : Standard home equipment such as couches, tables, beds, etc.
• Guarantor /Co-Signer : Someone accountable for paying rent if the tenant cannot.
• Guests : Short-term occupants of a rental property.
• Joint and several liabilities : Two or more people are independently held accountable for damages, regardless of who is at fault.
• Late Rent Fee : An additional, reasonable sum of money paid by a tenant after making a rent payment past the due date listed in the landlord-tenant agreement.
• Noise Policy : A provision outlining “quiet hours” in the apartment building, condominium, or neighborhood.
• Notice : A written announcement of some fact or observation.
• Option to Purchase : The tenant’s right to purchase the rental property later.
• Parking : Designated spaces where the tenant can keep their vehicles.
• Pet Policy : The permission or restriction of a tenant’s ability to have an animal in a rental property.
• Property Maintenance : Preserving a rental unit and who is responsible. Such as cutting the grass, removing the garbage, or unclogging the kitchen and bathroom drains.
• Renewal : A tenant’s option to continue the lease.
• Renter’s Insurance : A paid policy that protects personal belongings against theft or damage.
• Severability : A clause of a lease stating that if one part of the agreement is invalid for any reason, the rest of the lease is still enforceable.
• Smoking Polic y: The permission or restriction of a tenant’s smoking ability inside a rental property.
• Sublet : A temporary housing arrangement between current and new tenants to rent all or part of the currently leased property. The subletting period must be for less than the lease term.
• Successor : Someone who takes over the obligations of a lease from a tenant or landlord.
• Utilities : A public or private service supplying electricity, water, gas, or trash collection to a property.
• Waterbed : A water-filled furnishing used to sleep and not typically permitted in most rental properties.

Here’s how to write a lease :

Step 1 – Name the Parties

A simple rental agreement form must name the parties signing the lease and where they live. First, you should write down the following:

• The landlord or property management company and their current address

Step 2 – Describe the Premises

The “premises” are the exact address and type of rented property , such as an apartment, house, or condominium.

Step 3 – Define the Terms of the Lease

The “term” is the length of time a tenant will rent the listed property. A standard agreement should detail when the lease term begins and ends .

Furthermore, a lease can either be fixed-term or month-to-month.

• A fixed-term rental lease means the agreement is set for a predetermined or fixed period. This lease expires on the end date listed in the agreement (usually up to 6 months, one year, or two years from the start date).
• A month-to-month rental lease means the agreement lasts one month with no defined end date. It continues monthly until either the landlord or tenant terminates the agreement.

Step 4 – Set How Much Rent the Tenant Will Pay

A lease agreement must explicitly list the monthly rental amount and outline the consequences of late rent.

It’s up to the landlord to decide how much to charge for rent, but the cost is usually comparable to other properties within the same area.

In addition, standard rent control laws may limit the amount you can charge for rent. Check your local rent control ordinance to ensure your lease agreement complies with those regulations.

Step 5 – Assign a Security Deposit Amount

A security deposit is a set amount of money a landlord collects at the beginning of the lease.

Landlords have the right to collect a security deposit from their tenants. Still, their states’ security deposit laws define what landlords can use that money for (check the security deposit laws of your state ).

Step 6 – Finalize the Lease

Once you finish discussing the details with your tenant, remember to:

• Print – print at least two copies of the rental lease for you and the other party
• Sign – sign and date the lease agreement (both the tenant(s) and landlord)
• Save – safely file a hard copy of the signed document and consider scanning an electronic copy for extra safekeeping.

The following standard residential lease agreement works for all states except California , Florida , and Washington, DC .

Why do I need a lease agreement?

]You need a lease agreement because it explains your responsibilities as a landlord and sets rules for the tenants living on your property. This form helps you avoid disputes with your tenants and address issues when they arise.

Suppose you rent out a property but don’t use a lease agreement. In that case, you could lose rent money, be liable for illegal activities on the property, receive penalties for unpaid utility costs, or spend a lot on property damage repairs and lawyer fees. Anyone renting a home, land, or commercial building should have a lease agreement.

How do I rent a room in my house?

You rent out a room in your house by using an agreement stating you’re renting out a room, not the entire property. If you’re a tenant living in a rental property, you can sublet a room to another tenant using a room rental agreement .

A standard residential lease and a room rental agreement allow you to establish quiet hours, the times guests can visit, the division of utility payments, and rules regarding pets, smoking, and parking.

Both parties sign the agreement to rent a room, and the landlord collects a security deposit from the tenant before handing over the keys.

What’s the difference between a lease and a rental agreement?

The difference between a lease and a rental agreement is the duration of the contract. Lease agreements are typically long-term (12 to 24 months), whereas rental agreements are usually short-term (a few weeks or months).

If you decide whether a lease or rent is best for you, remember that a lease agreement provides more security, but a rental agreement offers more flexibility.

What are my responsibilities as a landlord?

Your responsibilities as a landlord include the following:

• Repairing and maintaining the normal wear and tear of appliances like the air conditioner or heater.
• Respecting a tenant’s right to “quiet enjoyment” (living without disturbances). For example, you should deal with noise complaints accordingly, and you shouldn’t visit the property unnecessarily.
• Providing the tenant with a safe and clean home for the lease term. Examples include removing mold , resolving water damage, and fixing ventilation problems.
• Returning the tenant’s security deposit if the tenant treats the property respectfully and the rental is in good condition at the end of the lease term.
• Giving the tenant advance notice when you must enter the premises to fix something or show someone the property.

What happens if a tenant violates a lease?

If a tenant violates a lease , the landlord may try to resolve the problem by allowing the tenant to fix it (unless the violation is significant, such as using the property to sell or manufacture illegal drugs). If the issue is not resolved within a specific period (as set by state law), the landlord can begin eviction to remove the tenant.

Common lease violations include unpaid rent/utility bills and damage to the property.

What should I include in a lease agreement?

You should include the following information and clauses in a lease agreement:

• Names of all tenants : Write the names of every adult living on the property.
• Term : State the lease’s duration and whether it’s for a fixed period or will automatically renew.
• Rent : Set the amount of money the tenant will pay to live in the property and which day of the month the tenant will pay the rent.
• Premises : Describe the property and its location.
• Security deposit : Assign an amount of money the tenant will give the landlord to hold in case of any damages

Depending on your property and its location, you may need to include some standard disclosures and addendums that address specific situations, such as smoking or pets.

Related Documents

• Lease Termination Letter : A document created by the landlord or tenant in order to end an existing lease or rental agreement.
• Lease Renewal Agreement : Extends the term of an existing lease agreement between a landlord and a tenant.
• Eviction Notice : A written record that the Landlord properly notified the Tenant of a problem (i.e. lease violation, late rent, the lease ended).
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Sean Kingston's Florida Home Raided by Authorities Amid Fraud Lawsuit

Sean Kingston's home was raided more than three months after he was sued in Florida for breach of contract and fraud.

Sean Kingston 's home in Broward County, Florida, was raided by authorities on Thursday, which resulted in his mother's arrest on numerous fraud and theft charges.

According to the Broward Sheriff's Office, the department is currently working on an incident regarding a law enforcement investigation at the rapper's home. The scope of the investigation is still unclear, but a spokesperson for the Broward Sheriff's Office tells ET that its office, Dania Beach District detectives, along with members of Broward Sheriff's Strategic Investigation Unit and Davie Police SWAT served arrest and search warrants at Kingston's residence.

The investigation, which began in the city of Dania Beach, resulted in the arrest of Kingston's mother, Janice Turner, who was taken into custody on eight fraud and theft charges, according to booking information provided to ET by the Broward County Sheriff.

The investigation remains active and ongoing. ET has reached out to Kingston's attorney for comment.

Following the raid, Kingston  took to his Instagram Story to assure his fans that he's "good" and his lawyers are "handling everything."

"People love negative energy," the 34-year-old wrote. "I am good and so is my mother! My lawyers are handling everything as we speak."

The raid comes more than two months after Ver Ver Entertainment sued the "Beautiful Girls" singer-rapper in Broward County Court claiming Kingston -- real name Kisean Anderson -- and the company entered into a contract in 2023 for the sale and installation of a colossal 232-inch TV, coupled with a robust sound system, at his Florida home.

It is alleged that Kingston wired the company $30,000 to commence manufacturing the massive TV. The company goes on to claim it installed the 232-inch TV and sound system at his home in December. Upon installation, the company claims the remaining balance was due in full, but it never received payment.

According to court documents obtained by ET, Kingston is alleged to have hyped up his relationship with Justin Bieber and, in an effort "to induce [Ver Ver Entertainment] to accept a much lower down payment and credit towards the purchase price, [Kingston] promised [Ver Ver Entertainment] that he would produce promotional videos of [his] corporation with Mr. Bieber."

Ver Ver Entertainment claims Kingston "had no ongoing working [relationship] with Mr. Bieber, nor did [Kingston] and Mr. Bieber have any intention of producing promotional videos of [Ver Ver Entertainment's] corporation."

The company claims Kingston made these false statements in order to get it to require "as small a down payment as possible."

Ver Ver Entertainment claims Kingston "never had any intention of paying [Ver Ver Entertainment] in full for its Colossal TV and sound system."

The company is suing Kingston for breach of contract and fraud. At this point, it's unclear if the raid is related to the lawsuit.

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• Sean Kingston

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