Assignment of the REPC
October 9, 2018
I have had a couple of questions lately about language that some Buyers are including with their offers. In these offers, Buyers are signing their names as the Buyers and then including additional language “and/or assigns.”
Why would Buyers do this and what does this language do?
The intent in including this language is to make the REPC assignable. An assignable contract simply means that a Buyer may assign their interest in the REPC to another Buyer. However, does including the language “and/or assigns” make the REPC assignable? The answer is an emphatic NO.
In Section 19 of the REPC, it reads, “The REPC and the rights and obligations of Buyer hereunder, are personal to Buyer. The REPC may not be assigned by Buyer without the prior written consent of Seller. Provided, however, the transfer of Buyer’s interest in the REPC to any business entity in which Buyer holds a legal interest, including, but not limited to, a family partnership, family trust, limited liability company, partnership, or corporation (collectively referred to as a “Permissible Transfer”), shall not be treated as an assignment by Buyer that requires Seller’s prior written consent. Furthermore, the inclusion of “and/or assigns” or similar language on the line identifying Buyer on the first page of the REPC shall constitute Seller’s written consent only to a Permissible Transfer.”
As per Section 19, including the language “and/or assigns” does not give the Buyer the permission to assign their position in the REPC. The Seller would still need to give their consent to allow the Buyer to assign the REPC to another Buyer.
If you have any questions about REPC, feel free to call the UAR’s Legal Hotline at 801-676-5211 on Monday, Wednesday, or Friday from 8:30 a.m. to 4:00 p.m.