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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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Ultimate Checklist for Understanding Contract Assignment Rules

• February 28, 2024
• Moton Legal Group

In contracts, understanding assignment is key. Simply put, an assignment in contract law is when one party (the assignor) transfers their rights and responsibilities under a contract to another party (the assignee). This can include anything from leasing agreements to business operations. But why is this important? It’s because it allows for flexibility in business and personal dealings, a critical component in our world.

Here’s a quick rundown: – Contract Basics: The foundational agreements between parties. – Assignment Importance: Allowing the transfer of obligations and benefits to keep up with life’s changes.

Contracts are a staple in both personal and business worlds, acting as the backbone to many transactions and agreements encountered daily. Understanding the nuances, like assignments, can empower you to navigate these waters with confidence and ease. Whether you’re a business owner in the Southeast looking to expand or an individual managing personal agreements, grasp these basics, and you’re on the right path.

Understanding Contract Assignment

Contract Assignment sounds complicated, right? But, let’s break it down into simple terms. In contracts and legal agreements, knowing about assignment can save you a lot of headaches down the road. Whether you’re a business owner, a landlord, or just someone who deals with contracts, this is for you.

Legal Definition

At its core, contract assignment is about transferring rights or obligations under a contract from one party to another. Think of it as passing a baton in a relay race. The original party (the assignor) hands off their responsibilities or benefits to someone else (the assignee). But, there’s a twist – the race keeps going with the new runner without starting over.

Contract Law

In contract law, assignment comes into play in various ways. For example, if you’re a freelancer and you’ve agreed to complete a project but suddenly find yourself overbooked, you might assign that contract to another freelancer. This way, the job gets done, and your client is happy. However, not all contracts can be freely assigned. Some require the other party’s consent, and others can’t be assigned at all, especially if they involve personal skills or confidential trust.

Property Law

When it comes to property law, assignment often surfaces in landlord-tenant relationships. Say you’re renting a shop for your business, but you decide to move. If your lease allows it, you might assign your lease to another business. This means they take over your lease, stepping into your shoes, with all the rights and obligations that come with it.

The concept might seem straightforward, but there are important legal requirements and potential pitfalls to be aware of. For instance, an assignment could be prohibited by the contract itself, or it may significantly change the original deal’s terms in a way that’s not allowed. Plus, when you’re dealing with something that requires a unique skill set, like an artist or a consultant, those services typically can’t be passed on to someone else without agreement from all parties involved.

To navigate these complexities, understanding the fundamentals of assignment in contract law and property law is crucial. It ensures that when you’re ready to pass that baton, you’re doing it in a way that’s legal, effective, and doesn’t leave you tripping up before you reach the finish line.

The goal here is to make sure everyone involved understands what’s happening and agrees to it. That way, assignments can be a useful tool to manage your contracts and property agreements, keeping things moving smoothly even when changes come up.

For more detailed exploration on this topic, consider checking the comprehensive guide on Assignment (law)). This resource dives deeper into the nuances of contract assignment, offering insights and examples that can help clarify this complex area of law.

By grasping these basics, you’re well on your way to mastering the art of contract assignment. Whether you’re dealing with leases, business deals, or any agreement in between, knowing how to effectively assign a contract can be a game-changer.

Key Differences Between Assignment and Novation

When diving into contracts, two terms that often cause confusion are assignment and novation . While both deal with transferring obligations and rights under a contract, they are fundamentally different in several key aspects. Understanding these differences is crucial for anyone involved in contract management or negotiation.

Rights Transfer

Assignment involves the transfer of benefits or rights from one party (the assignor) to another (the assignee). However, it’s important to note that only the benefits of the contract can be assigned, not the burdens. For instance, if someone has the right to receive payments under a contract, they can assign this right to someone else.

Novation , on the other hand, is more comprehensive. It involves transferring both the rights and obligations under a contract from one party to a new party. With novation, the original party is completely released from the contract, and a new contractual relationship is formed between the remaining and the new party. This is a key distinction because, in novation, all parties must agree to this new arrangement.

Obligations Transfer

Assignment doesn’t transfer the original party’s obligations under the contract. The assignor (the original party who had the rights under the contract) might still be liable if the assignee fails to fulfill the contract terms.

In contrast, novation transfers all obligations to the new party. Once a novation is complete, the new party takes over all rights and obligations, leaving the original party with no further legal liabilities or rights under the contract.

Written Agreement

While assignments can sometimes be informal or even verbal, novation almost always requires a written agreement. This is because novation affects more parties’ rights and obligations and has a more significant impact on the contractual relationship. A written agreement ensures that all parties are clear about the terms of the novation and their respective responsibilities.

In practice, the need for a written agreement in novation serves as a protection for all parties involved. It ensures that the transfer of obligations is clearly documented and legally enforceable.

For example, let’s say Alex agrees to paint Bailey’s house for $1,000. Later, Alex decides they can’t complete the job and wants Chris to take over. If Bailey agrees, they can sign a novation agreement where Chris agrees to paint the house under the same conditions. Alex is then relieved from the original contract, and Chris becomes responsible for completing the painting job.

Understanding the difference between assignment and novation is critical for anyone dealing with contracts. While both processes allow for the transfer of rights or obligations, they do so in different ways and with varying implications for all parties involved. Knowing when and how to use each can help ensure that your contractual relationships are managed effectively and legally sound.

For further in-depth information and real-life case examples on assignment in contract law, you can explore detailed resources such as Assignment (law) on Wikipedia).

Next, we’ll delve into the legal requirements for a valid assignment, touching on express prohibition, material change, future rights, and the rare skill requirement. Understanding these will further equip you to navigate the complexities of contract assignments successfully.

Legal Requirements for a Valid Assignment

When dealing with assignment in contract law , it’s crucial to understand the legal backbone that supports a valid assignment. This ensures that the assignment stands up in a court of law if disputes arise. Let’s break down the must-know legal requirements: express prohibition, material change, future rights, and rare skill requirement.

Express Prohibition

The first stop on our checklist is to look for an express prohibition against assignment in the contract. This is a clause that outright states assignments are not allowed without the other party’s consent. If such language exists and you proceed with an assignment, you could be breaching the contract. Always read the fine print or have a legal expert review the contract for you.

Material Change

Next up is the material change requirement. The law states that an assignment cannot significantly alter the duties, increase the burdens, or impair the chances of the other party receiving due performance under the contract. For instance, if the contract involves personal services tailored to the specific party, assigning it to someone else might change the expected outcome, making such an assignment invalid.

Future Rights

Another important aspect is future rights . The rule here is straightforward: you can’t assign what you don’t have. This means that a promise to assign rights you may acquire in the future is generally not enforceable at present. An effective assignment requires that the rights exist at the time of the assignment.

Rare Skill Requirement

Lastly, let’s talk about the rare skill requirement . Some contracts are so specialized that they cannot be assigned to another party without compromising the contract’s integrity. This is often the case with contracts that rely on an individual’s unique skills or trust. Think of an artist commissioned for a portrait or a lawyer hired for their specialized legal expertise. In these scenarios, assignments are not feasible as they could severely impact the contract’s intended outcome.

Understanding these legal requirements is pivotal for navigating the complexities of assignment in contract law. By ensuring compliance with these principles, you can effectively manage contract assignments, safeguarding your interests and those of the other contracting party.

For anyone looking to delve deeper into the intricacies of contract law, you can explore detailed resources such as Assignment (law) on Wikipedia).

Moving forward, we’ll explore the common types of contract assignments, from landlord-tenant agreements to business contracts and intellectual property transfers. This will give you a clearer picture of how assignments work across different legal landscapes.

Common Types of Contract Assignments

When we dive into assignment in contract law , we find it touches nearly every aspect of our business and personal lives. Let’s simplify this complex topic by looking at some of the most common types of contract assignments you might encounter.

Landlord-Tenant Agreements

Imagine you’re renting a fantastic apartment but have to move because of a new job. Instead of breaking your lease, you can assign your lease to someone else. This means the new tenant takes over your lease, including rent payments and maintenance responsibilities. However, it’s crucial that the landlord agrees to this switch. If done right, it’s a win-win for everyone involved.

Business Contracts

In the business world, contract assignments are a daily occurrence. For example, if a company agrees to provide services but then realizes it’s overbooked, it can assign the contract to another company that can fulfill the obligations. This way, the project is completed on time, and the client remains happy. It’s a common practice that ensures flexibility and efficiency in business operations.

Intellectual Property

Intellectual property (IP) assignments are fascinating and complex. If an inventor creates a new product, they can assign their patent rights to a company in exchange for a lump sum or royalties. This transfer allows the company to produce and sell the invention, while the inventor benefits financially. However, it’s critical to note that with trademarks, the goodwill associated with the mark must also be transferred to maintain its value.

Understanding these types of assignments helps clarify the vast landscape of contract law. Whether it’s a cozy apartment, a crucial business deal, or a groundbreaking invention, assignments play a pivotal role in ensuring these transitions happen smoothly.

As we navigate through the realm of contract assignments, each type has its own set of rules and best practices. The key is to ensure all parties are on the same page and that the assignment is executed properly to avoid any legal pitfalls.

Diving deeper into the subject, next, we will explore how to execute a contract assignment effectively, ensuring all legal requirements are met and the process runs as smoothly as possible.

How to Execute a Contract Assignment Effectively

Executing a contract assignment effectively is crucial to ensure that all legal requirements are met and the process runs smoothly. Here’s a straightforward guide to help you navigate this process without any hiccups.

Written Consent

First and foremost, get written consent . This might seem like a no-brainer, but it’s surprising how often this step is overlooked. If the original contract requires the consent of the other party for an assignment to be valid, make sure you have this in black and white. Not just a handshake or a verbal agreement. This ensures clarity and avoids any ambiguity or disputes down the line.

Notice of Assignment

Next up, provide a notice of assignment to all relevant parties. This is not just common courtesy; it’s often a legal requirement. It informs all parties involved about the change in the assignment of rights or obligations under the contract. Think of it as updating your address with the post office; everyone needs to know where to send the mail now.

Privity of Estate

Understanding privity of estate is key in real estate transactions and leases. It refers to the legal relationship that exists between parties under a contract. When you assign a contract, the assignee steps into your shoes, but the original terms of the contract still apply. This means the assignee needs to be aware of and comply with the original agreement’s requirements.

Secondary Liability

Lastly, let’s talk about secondary liability . Just because you’ve assigned a contract doesn’t always mean you’re off the hook. In some cases, the original party (the assignor) may still hold some liability if the assignee fails to perform under the contract. It’s essential to understand the terms of your assignment agreement and whether it includes a release from liability for the assignor.

Executing a contract assignment effectively is all about dotting the I’s and crossing the T’s . By following these steps—securing written consent, issuing a notice of assignment, understanding privity of estate, and clarifying secondary liability—you’re setting yourself up for a seamless transition.

The goal is to ensure all parties are fully informed and agreeable to the changes being made. This not only helps in maintaining good relationships but also in avoiding potential legal issues down the line.

We’ll dive into some of the frequently asked questions about contract assignment to clear any lingering doubts.

Frequently Asked Questions about Contract Assignment

When navigating contracts, questions often arise, particularly about the concepts of assignment and novation. Let’s break these down into simpler terms.

What does assignment of a contract mean?

In the realm of assignment in contract law , think of assignment as passing the baton in a relay race. It’s where one party (the assignor) transfers their rights and benefits under a contract to another party (the assignee). However, unlike a relay race, the original party might still be on the hook for obligations unless the contract says otherwise. It’s like handing off the baton but still running alongside the new runner just in case.

Is an assignment legally binding?

Absolutely, an assignment is as binding as a pinky promise in the playground – but with legal muscle behind it. Once an assignment meets the necessary legal criteria (like not significantly changing the obligor’s duties or having express consent if required), it’s set in stone. This means both the assignee and the assignor must honor this transfer of rights or face potential legal actions. It’s a serious commitment, not just a casual exchange.

What is the difference between assignment and novation?

Now, this is where it gets a bit more intricate. If assignment is passing the baton, novation is forming a new team mid-race. It involves replacing an old obligation with a new one or adding a new party to take over an old one’s duties. Crucially, novation extinguishes the old contract and requires all original and new parties to agree. It’s a clean slate – the original party walks away, and the new party steps in, no strings attached.

While both assignment and novation change the playing field of a contract, novation requires a unanimous thumbs up from everyone involved, completely freeing the original party from their obligations. On the other hand, an assignment might leave the original party watching from the sidelines, ready to jump back in if needed.

Understanding these facets of assignment in contract law is crucial, whether you’re diving into a new agreement or navigating an existing one. Knowledge is power – especially when it comes to contracts.

As we wrap up these FAQs, the legal world of contracts is vast and sometimes complex, but breaking it down into bite-sized pieces can help demystify the process and empower you in your legal undertakings.

Here’s a helpful resource for further reading on the difference between assignment and cession.

Now, let’s continue on to the conclusion to tie all these insights together.

Navigating assignment in contract law can seem like a daunting task at first glance. However, with the right information and guidance, it becomes an invaluable tool in ensuring that your rights and obligations are protected and effectively managed in any contractual relationship.

At Moton Legal Group, we understand the intricacies of contract law and are dedicated to providing you with the expertise and support you need to navigate these waters. Whether you’re dealing with a straightforward contract assignment or facing more complex legal challenges, our team is here to help. We pride ourselves on our ability to demystify legal processes and make them accessible to everyone.

The key to successfully managing any contract assignment lies in understanding your rights, the obligations involved, and the potential impacts on all parties. It’s about ensuring that the assignment is executed in a way that is legally sound and aligns with your interests.

If you’re in need of assistance with a contract review, looking to understand more about how contract assignments work, or simply seeking legal advice on your contractual rights and responsibilities, Moton Legal Group is here for you. Our team of experienced attorneys is committed to providing the clarity, insight, and support you need to navigate the complexities of contract law with confidence.

For more information on how we can assist you with your contract review and other legal needs, visit our contract review service page .

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• Legal Dictionary

Assignment is a legal definition that refers to the transfer of rights, property, or other benefits between two parties. The party allocating the rights is known as the “assignor”, while the one receiving them is called the “assignee”. The other original party to the contract is known as the “ obligor ”.

A burden, duty, or detriment cannot be transferred as an assignment without the agreement of the assignee . Furthermore, the assignment can be carried out as a gift, or it may be paid for with a contractual consideration .

Keep reading to learn how this important legal term is used both in contract and property law and to see relevant examples.

• Assignment Examples

A common example of assignment within property law can be seen in rental agreements between landlords and tenants. For example, a tenant may be renting from a landlord but wants another party to take over the property . In this scenario, the tenant may be able to choose between assigning the lease to a new tenant or subleasing it.

If assigning it, the new tenant will be given the entire balance of the term, with no reversion to anyone else being possible. In other words, the new tenant would have a legal relationship with the landlord. On the other hand, if subleasing the property, the new tenant would be given a limited term and no legal responsibility towards the property owner, only towards the original tenant.

Another example of assignment can be seen within contract law . Let’s say that a school hires a piano teacher for a monthly employment contract with a salary of $2000 per month. As long as there is consent from all parties, the teacher could assign their contract to another qualified piano instructor.

This would be an assignment both of the piano teacher’s rights to receive $2000 per month, and a delegation of their duty to teach piano lessons. This illustrates the fact that under contract law, assignment always includes a transfer of both rights and duties between the parties. If a breach of contract is made by either party, for example for defective performance, then the new teacher or the school can sue each other accordingly.

• Legal Requirements for Assignment

For an assignment to be legally valid, it must meet certain requirements . If these are not met, a trial court can determine that the transfer of rights did not occur. The legal requirements for assignment are as follows:

• All parties must consent and be legally capable to carry out the assignment.
• The objects, rights, or benefits being transferred must be legal.
• The assignment is not against public policy or illegal.
• Some type of consideration is included if necessary.
• The contract in question must already be in place and doesn’t prohibit assignment.
• If a duty is being transferred, and it requires a rare genius or skill, then it cannot be delegated.
• The assignment doesn’t significantly change the expected outcome of a contract.
• Assignment Steps

To successfully assign a contract, certain steps must be followed to ensure the process is legally valid. The necessary assignment steps are listed below:

• Ensuring there is no anti-assignment clause in the contract.
• Executing the assignment by transferring the obligations and rights to a third party.
• Notifying the obligor of the transfer, which in turn relieves the assignor of any liability.
• Avoiding Assignment

In certain situations, one of the two parties may not want to allow their counterpart to assign the contract. This can be prevented by setting anti-assignment clauses in the original contract. An example of this is making it necessary for prior written consent to be attained from the other parties before the assignment is approved. Nevertheless, an anti-assignment clause cannot be included in an assignment that was issued or ordered by a court.

• Assignment vs. Novation

Novation occurs when a party would like to transfer both the benefits and burden of a contract to another party. This is similar to assignment in the sense that the benefits are transferred, but in this case, the burden is also passed on. When novation is finalized, the original contract is deleted and a new one is created, in which a third party becomes responsible for all the obligations and rights of the original contract.

• Assignment vs. Delegation

Although delegation and assignment are similar in purpose, they are two different concepts. Delegation refers to transferring the obligation to a third party without an assignment contract . While in assignment an entire contract and its rights and benefits can be passed on, in delegation only a particular contractual task or activity is transferred.

Let’s look at an example . Lisa is a homeowner that wants to hire Michael with an independent contractor agreement to remodel her garage. He plans to do all the work himself, but he’s not a painter, so he wants to delegate the painting work to his friend Valentina.

In this example, the contract is between Lisa, the obligor, and Michael, the delegator. Valentina would then be known as a delegatee, she doesn’t assume responsibility for the contract nor does she receive the contractual benefits, which in this case would be monetary compensation. However, Michael may have a separate agreement with Valentina to pay her in return for her work.

It’s also important to note that some duties are so specific in nature that it’s not possible to delegate them. In addition, if a party wants to avoid delegation , it’s recommended to add a clause to prevent the other party from delegating their duties.

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Legal Assignment: Everything You Need to Know

A legal assignment occurs when a party assigns their contractual rights to a third party. 3 min read updated on February 01, 2023

A legal assignment occurs when a party assigns their contractual rights to a third party. The benefit that the issuing party would have received from the contract is now assigned to the third party. The party appointing their rights is referred to as the assignor, while the party obtaining the rights is the assignee.

Assignment of Contract

A legal assignment occurs when:

• The rights in personal or real property are transferred from one party to another
• The transfer also gives the new owner the rights to the property that the prior owner held prior to the transfer occurring

In the Purman Estate case, the court stated that a legal assignment is a transfer of property, or of some right or interest, from one person to another. It also stated that it must be the proper transfer of one whole interest in that property.

An assignment of rights occurs when an assignor gives up or transfers their rights of a future benefit to another party. In other words, an assignment is the act of one party transferring, vesting, or causing to vest their interest in a property to another party. A valid legal assignment only occurs when all underlying elements of a lawfully binding contract are included in it, including intent. A trial court can determine if an assignment has occurred. To prevent disputes or miscommunications, it's important that the subject matter is clearly identified in the assignment.

A contract assignment occurs when a party assigns their contractual rights to a third party. The benefit the issuing party would have received from the contract is now assigned to the third party. The party appointing their rights is referred to as the assignor, while the party obtaining the rights is the assignee. Essentially, the assignor prefers that the assignee reverses roles and assumes the contractual rights and obligations as stated in the contract. Before this can occur, all parties to the original contract must be notified.

How Assignments Work

The specific language used in the contract will determine how the assignment plays out. For example , one contract may prohibit assignment, while another contract may require that all parties involved agree to it before proceeding. Remember, an assignment of contract does not necessarily alleviate an assignor from all liability. Many contracts include an assurance clause guaranteeing performance. In other words, the initial parties to the contract guarantee that the assignee will achieve the desired goal.

When Assignments Will Not Be Enforced

The following situations indicate when an assignment of a contract is not enforced:

• The contract specifically prohibits assignment
• The assignment drastically changes the expected outcome
• The assignment is against public policy or illegal

Delegation vs. Assignment

Occasionally, one party in a contract will desire to pass on or delegate their responsibility to a third party without creating an assignment contract. Some duties are so specific in nature that they cannot be delegated. Adding a clause in the contract to prevent a party from delegating their responsibilities and duties is highly recommended.

Three Steps to Follow if You Want to Assign a Contract

There are three main steps to take if you're looking to assign a contract:

• Make sure the current contract does not contain an anti-assignment clause
• Officially execute the assignment by transferring the parties' obligations and rights
• Notify the obligor of the changes made

Once the obligor is notified, the assignor will effectively be relieved of liability.

Anti-Assignment Clauses

If you'd prefer not to allow the party you're doing business with to assign a contract, you may be able to prevent this from occurring by clearly stating anti-assignment clauses in the original contract. The three most common anti-assignment clauses are:

• Consent required for assignment
• Consent not needed for new owners or affiliates
• Consent not unreasonably withheld

Based on these three clauses, no party in the contract is allowed to delegate or assign any obligations or rights without prior written consent from the other parties. Any delegation or assignment in violation of this passage shall be deemed void. It is not possible to write an anti-assignment clause that goes against an assignment that is issued or ordered by a court.

If you need help with a legal assignment, you can  post your job  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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• Assignment Law
• Assignment Contract Law
• Assignment of Rights and Obligations Under a Contract
• Assignment of Rights Example
• Consent to Assignment
• Assignment Legal Definition
• What Is the Definition of Assigns
• Delegation vs Assignment
• Assignment Of Contracts
• Assignment of Contract Rights

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Assignee is a person to whom a right is transferred by the person holding such rights under the transferred contract (the “assignor”).  The act of transferring is referred to as “ assigning ” or “ assignment ” and is a concept found in both  contract  and  property  law. 

Contract Law  

Under contract law, when one party assigns a contract, the assignment represents both: (1) a transfer of rights; and (2) a delegation of  duties .  For example, if A contracts with B to teach B guitar for $50, A can assign this contract to C.  Here, A has both: assigned A’s rights under the contract to receive the $50 to C, and delegated A’s  duty  to teach guitar to C.  In this example, A is the “assignor” because he/she assigns the contract to C. A is also the “primary obligor ,” meaning he/she will still be liable to B if C fails to teach B guitar. C is the “assignee,” since C is the party to whom A transfers the contract. C is also the “secondary obligor,” since he/she must perform the  obligations  to B. B is the ultimate recipient of the duty under the assignment, and is the “ obligee .”

There are a few notable rules regarding assignments under  contract  law.  First, if an individual has not yet secured the contract to perform duties to another, he/she cannot assign his/her future right to an assignee.  That is, if A has not yet contracted with B to teach B guitar, A cannot  assign  his/her rights to C.  Second, rights cannot be assigned when they materially change the obligor’s duty and rights.  Third, the primary  obligor  can sue the  assignee directly if the  assignee  does not perform the assigned duty. In guitar assignment example, if C does not teach B guitar, A can sue C for any liability that A incurs as a result of C’s failure to perform the assigned contract. Fourth, if the promised performance requires a rare genius or skill, then the primary obligor cannot assign the contract.  

Lastly, a related concept is  novation , which is when the secondary obligor substitutes and releases the primary obligor.  If  novation  occurs, then the primary obligor’s duties are extinguished under the contract. However,  novation  requires the obligee’s  consent . In the guitar example, if A, B, and C agree to novation, then A would not be liable if C fails to teach B guitar.

Property Law

Under  property  law, assignment typically arises in landlord-tenant situations.  For example, A might be renting from landlord B but wants C, a new tenant, to take over the lease.  In this scenario, A might be able to choose between  assigning  and  subleasing  the property to C.  If  assigning , A would be giving C the entire balance of the term, with no reversion to anyone. If subleasing , A would be giving C for a limited period of the remaining term.  Significantly, under assignment, C would have  privity  of  estate  with the landlord, while under a sublease, C would not.

[Last updated in December of 2021 by the Wex Definitions Team ]

• business law
• landlord & tenant
• property & real estate law
• trusts, inheritances & estates
• wex definitions

Property Study Guide: Sample Exam Questions

• Study Aids and Tutorials
• Sample Exam Questions

Introduction

The Law Library carries a number of resources that test your knowledge of property law. This guide provides a listing of resources of practice essay exams as well as multiple choice questions. There are also links to online multiple choice questions as well as resources to help with law school exams.  The multiple choice questions in property law can be a great way to track your progress. Review the description of each resource for more details.   

Essay Samples

Resources for Excelling in Law Exams

Multiple Choice Practice Questions

Real Property Online Multiple Choice Questions

• Real Property
• << Previous: Study Aids and Tutorials
• Last Updated: Jan 25, 2024 5:32 PM
• URL: https://libguides.regent.edu/propertylaw

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Small estates: how does assignment of property work.

When a person dies, they are called a decedent. A decedent leaves property behind. That property needs to be passed on to those who will inherit it. If a person has a small estate, then a shortened process, called assignment of property, can be used instead of the probate administration process.

Read this article to learn about how to use the assignment of property process. You can use our Do-It-Yourself Settling a Small Estate  tool to create the forms you will need for this process. Read the article An Overview of Small Estate Processes to learn more about the other ways a small estate can be distributed.

What is In an Estate?

The property a decedent leaves behind that can be distributed through the assignment process could include:

• Real estate (houses and other buildings, land and the things attached to it)
• Personal property (furniture, cars, and other things not attached to land)
• Bank accounts and cash
• Stocks and bonds
• Debts owed to the person

Some of the property is not part of the estate, which means it cannot be distributed through the assignment process. The estate does not usually include:

• Jointly owned property,
• Insurance policies,
• Retirement accounts, or
• Trusts that are not established by a will

Jointly Owned Property

Jointly owned property is property owned by more than one person. It is generally not included in an estate. Examples of jointly owned personal property are if you and the decedent are both listed on the title of a car or if you have joint bank accounts. When the decedent died, you automatically have full ownership of that property, so it is not part of the estate. You may want to take a copy of the decedent’s death certificate to the bank or Secretary of State (SOS) to remove the decedent’s name from the account or car title.

However, sometimes joint ownership is more complex. If you own real property with the decedent, or if you own any type of property with the decedent and someone else, ownership can be hard to understand after a death. Read the article Jointly Owned Property  to learn more about this, or use the Guide to Legal Help to find a lawyer or legal services in your area.

Small Estates

In order to use the assignment process, a decedent’s estate must be small. Whether an estate is small depends on the value of the property in it. The dollar limit can change each year. If a person dies on or after February 21, 2024, an estate must be valued at $28,000 or less to be small. If a person died in 2023 through and including February 20, 2024 an estate must be valued at $27,000 or less. If a person died in 2022, an estate must be valued at $25,000 or less. If a person died in 2020 or 2021, an estate must be valued at $24,000 or less. If a person died in 2019 or 2018, an estate must be valued at $23,000 or less. 

Assignment of Property

Assignment of property is the small estate process you must use if the decedent had real property. However, even if there was no real property, you may choose to use assignment of property if an estate is small. This is the only small estate process where a Probate Judge reviews and approves the division of property.

To use this process, you must know all the property and the heirs the decedent had, and have information about the funeral or burial expenses. You must also be an heir or the person who paid the funeral bill.

You must list all real property and personal property with the value of each. You can estimate real property’s market value by doubling its State Equalized Value (SEV). You can find the SEV on property tax bills or assessments for the property. You can also find it on most county or municipality websites.

The value of the property in the estate is its market value. Any liens or loans on property will not be deducted when determining if the estate falls into the small estates amount. There is a separate calculation to determine the fees that the court will charge to file the petition. This is called the inventory fee. You are allowed to deduct the value of the mortgage or other liens on real property when you determine the inventory value. You are not allowed to make any deductions from the value of personal property. 

To estimate the value of personal property, think about how much you would ask for it at a yard sale or if you were selling it online.

Who Will Inherit?

After funeral and burial expenses have been paid, the court will order any remaining property to be divided among the heirs. The inheritance formula determines which heirs inherit property, and how much of the property each person will get. If there is a surviving spouse, that person inherits all the property.

If there is no surviving spouse, any property will be given or paid to direct descendants of the decedent, starting with the decedent’s children. If all of the decedent’s children are still alive, they will split the property equally. If a child died before the decedent, that person’s children will split the share equally. If the decedent had a grandchild who should inherit, but they died before the decedent, the grandchild's children will split the shares equally. If inheriting children or grandchildren die before the decedent with no living children of their own, the line of inheritance stops there. Their share will be divided between the remaining descendants.

If there are no living descendants of the decedent, the property will be split between the decedent’s parents equally. If only one parent is still living, that parent inherits all the property. If both parents died before the decedent, the property will go to their descendants, starting with the decedent’s siblings. The same rules of representation mentioned above apply.

If an inheriting sibling died before the decedent, that person’s child(ren) will split their share of the property equally. The same is true if an inheriting niece or nephew died before the decedent. If inheriting siblings, nieces, or nephews die before the decedent with no living children of their own, the line of inheritance stops there. Their share will be divided between the remaining heirs.

If no descendants of the decedent’s parents are living, the property is divided among the decedent’s grandparents. Half of the property will go to the decedent’s paternal grandparents, and the other half will go to the maternal grandparents. If only one maternal or paternal grandparent is living, they will take the full half of the property. If both grandparents on one side died before the decedent, their half of the property goes to their descendants, starting with the decedent’s aunts and uncles. The same rules of representation mentioned above apply.

If an inheriting aunt or uncle died before the decedent did, that person’s children will split the share of the property equally. The same is true if an inheriting cousin died before the decedent. If inheriting aunts, uncles, or cousins die before the decedent with no living children of their own, the line of inheritance stops there. Their share will be divided between the remaining heirs.

There are other rules too, including special rules if an heir dies after the decedent does. You can use our Do-It-Yourself Settling a Small Estate tool to help you figure out who will inherit and what share each heir will receive. You may also want to talk to a lawyer if you have questions about this. You can use the Guide to Legal Help to find legal services in your area.

Survivorship and the 120-Hour Rule

Survivorship affects inheritance rights of heirs and devisees. In Michigan, a person must live more than 120 hours after a decedent dies for that person’s survivorship rights to take effect. Generally, anyone who dies during the first 120 hours after a decedent’s death is considered to have predeceased (died before) the decedent and they lose their interest in the decedent’s property. The 120-hour rule is not followed if:

• A will, deed, title, or trust addresses simultaneous deaths or deaths in a common disaster;
• A will, deed, title, or trust states a person is not required to survive for a certain amount of time or it specifies a different survival period;
• The rule would affect interests protected by Michigan law; or
• The rule would cause a failure or duplication in distributing property.

Notice to Decedent’s Creditors

This process does not include any notice to creditors . If a creditor tries to collect a debt within 63 days of when the order is issued by the court, the person who got the property will have to pay the debt, up to the amount or value of the property the person got. This does not apply if the decedent’s spouse or minor children got the property. For example, if the decedent’s brother got $1,000, a creditor the decedent owed $500 could get the $500 from him. If the decedent had owed the creditor $1,500, the brother wouldn’t have to pay more than $1,000 to the creditor. If the decedent’s spouse or minor child got the property, they would not have to pay the creditor anything.

The Process

To start this process, file a Petition for Assignment with the probate court in the county where the decedent lived. If the decedent lived outside Michigan, file the Petition for Assignment in the county where the decedent had real property. You can use our Do-It-Yourself Settling a Small Estate tool to create this petition.

After you complete the form, print two copies. Date and sign both copies. The Do-It-Yourself Settling a Small Estate  tool will prepare a Testimony to Identify Heirs, but not all courts require it. Not all courts require a certified copy of the death certificate. You might want to check the probate court’s website or call and ask before you go to court to file the documents. You can find contact information for the court on the right side of this page if you have selected a county.

You will need to file the following documents with the probate court:

• Both copies of the petition
• The Testimony to Identify Heirs (if your court requires it)
• A copy of the death certificate
• Proof that the funeral and burial expenses have been paid or a bill showing the amount owed

There is a $25 filing fee. There is also an inventory fee. It is based on the value of property in the estate. If the property in the estate has no value, the inventory fee is $5. For example, if the decedent had a house that was worth less than the amount of the mortgage, the value of the estate could be zero. You can use the  inventory fee calculator  on the Michigan One Court of Justice website to see how much the inventory fee will be.

The petition is reviewed by a probate court judge. If everything is correct when you file the Petition and Order, the judge will sign it. You may be able to get your certified copy of the Order Assigning Assets on the day you file it. You need the Order Assigning Assets to distribute the property in the estate.

There is a fee to get a certified copy of the Order Assigning Assets. The fee to get a certified copy varies, but it is usually $15 to $20. You need a certified copy of the order to transfer the property in the estate. You may want to get more than one certified copy when you file the petition. Some courts charge less for extra certified copies if you get them at the same time.

The court will order the funeral and burial expenses be paid or reimbursed to whoever paid them. This means all paid and unpaid funeral expenses will be deducted from the value of the estate when determining if it is a small estate. If there is no cash available, something may have to be sold to pay those expenses.

Distributing the Property

Once the judge has signed the Order Assigning Assets, you will be able to distribute the property in the estate to the heirs. The Do-It-Yourself Settling a Small Estate  tool will tell you the shares each person is entitled to, but some things (like cars) cannot easily be divided. Decide how to divide the existing property so everyone gets the share they deserve.

Transferring Money from Bank or Credit Union Accounts

If the decedent had bank or credit union accounts that were not jointly owned with another person, take the certified copy of the order to the bank to close the account. The bank should release the money to the heir or heirs by writing a check or money order.

Transferring a Vehicle

If the decedent had a vehicle, the surviving spouse or heir must complete a Certification from the Heir to a Vehicle . If you use our Do-It-Yourself Settling a Small Estate  tool, you will get a completed certification form for each vehicle you are transferring.

Take it to the Office of the SOS with a copy of the death certificate. If you have a copy of the vehicle title, take that, too.

Transferring Real Property

If the decedent had real property, you will need to record a certified copy of the order to transfer the property. Take the order to the register of deeds for the county where the property is. Check the county’s website or call the local register of deeds office to find out how much the filing fee is.

You should not have to pay a transfer tax. Transfer tax is based on how much is paid for the property. Nothing was paid for this property when it transferred because the decedent died.

When the property is transferred, its value may “uncap.” The amount property tax can increase in a year is limited while the property is owned by the same person. When the property is transferred to another person, the property tax will be adjusted to the property’s current market value. You can learn more about property taxes on the State of Michigan’s Treasury Department website .

If the property was the decedent’s principal residence, it probably had a Homestead Tax Exemption attached to it. Under Michigan law, if you own your home you do not have to pay certain taxes on it.

If the person inheriting the property will be living there, they need to fill out a Principal Residence Exemption Affidavit . If whoever is getting the property is not going to live there but plans to continue owning it, they need to fill out a Request to Rescind a Principal Residence Exemption .

One of these forms must be filed with the city or township where the property is located within 90 days after the decedent’s death. If it is not filed, additional taxes and fees will be charged.

You may not have to file the Request to Rescind a Principal Residence Exemption for up to three years if the property is listed for sale during that time. If you are selling real estate in this situation, you may want to talk to a real estate agent or a lawyer. 

If you have a low income, you may qualify for free legal services. Whether you have a low income or not, you can use the Guide to Legal Help to find lawyers in your area. If you are not able to get free legal services but can’t afford high legal fees, consider hiring a lawyer for part of your case instead of the whole thing. This is called limited scope representation. To learn more, read Limited Scope Representation (LSR): A More Affordable Way to Hire a Lawyer . To find a limited scope lawyer, follow this link to the State Bar of Michigan lawyer directory . This link lists lawyers who offer limited scope representation. You can narrow the results to lawyers in your area by typing in your county, city, or zip code at the top of the page. You can also narrow the results by topic by entering the kind of lawyer you need (divorce, estate, etc.) at the top of the page.

Assignment of Lease

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What is an assignment of lease.

The assignment of lease is a title document that transfers all rights possessed by a lessee or tenant to a property to another party. The assignee takes the assignor’s place in the landlord-tenant relationship.

You can view an example of a lease assignment here .

How Lease Assignment Works

In cases where a tenant wants to or needs to get out of their lease before it expires, lease assignment provides a legal option to assign or transfer rights of the lease to someone else. For instance, if in a commercial lease a business leases a place for 12 months but the business moves or shuts down after 10 months, the person can transfer the lease to someone else through an assignment of the lease. In this case, they will not have to pay rent for the last two months as the new assigned tenant will be responsible for that.

However, before the original tenant can be released of any responsibilities associated with the lease, other requirements need to be satisfied. The landlord needs to consent to the lease transfer through a “License to Assign” document. It is crucial to complete this document before moving on to the assignment of lease as the landlord may refuse to approve the assignment.

Difference Between Assignment of Lease and Subletting

A transfer of the remaining interest in a lease, also known as assignment, is possible when implied rights to assign exist. Some leases do not allow assignment or sharing of possessions or property under a lease. An assignment ensures the complete transfer of the rights to the property from one tenant to another.

The assignor is no longer responsible for rent or utilities and other costs that they might have had under the lease. Here, the assignee becomes the tenant and takes over all responsibilities such as rent. However, unless the assignee is released of all liabilities by the landlord, they remain responsible if the new tenant defaults.

A sublease is a new lease agreement between the tenant (or the sublessor) and a third-party (or the sublessee) for a portion of the lease. The original lease agreement between the landlord and the sublessor (or original tenant) still remains in place. The original tenant still remains responsible for all duties set under the lease.

Here are some key differences between subletting and assigning a lease:

• Under a sublease, the original lease agreement still remains in place.
• The original tenant retains all responsibilities under a sublease agreement.
• A sublease can be for less than all of the property, such as for a room, general area, portion of the leased premises, etc.
• Subleasing can be for a portion of the lease term. For instance, a tenant can sublease the property for a month and then retain it after the third-party completes their month-long sublet.
• Since the sublease agreement is between the tenant and the third-party, rent is often negotiable, based on the term of the sublease and other circumstances.
• The third-party in a sublease agreement does not have a direct relationship with the landlord.
• The subtenant will need to seek consent of both the tenant and the landlord to make any repairs or changes to the property during their sublease.

Here is more on an assignment of lease here .

Parties Involved in Lease Assignment

There are three parties involved in a lease assignment – the landlord or owner of the property, the assignor and the assignee. The original lease agreement is between the landlord and the tenant, or the assignor. The lease agreement outlines the duties and responsibilities of both parties when it comes to renting the property. Now, when the tenant decides to assign the lease to a third-party, the third-party is known as the assignee. The assignee takes on the responsibilities laid under the original lease agreement between the assignor and the landlord. The landlord must consent to the assignment of the lease prior to the assignment.

For example, Jake is renting a commercial property for his business from Paul for two years beginning January 2013 up until January 2015. In January 2014, Jake suffers a financial crisis and has to close down his business to move to a different city. Jake doesn’t want to continue paying rent on the property as he will not be using it for a year left of the lease. Jake’s friend, John would soon be turning his digital business into a brick-and-mortar store. John has been looking for a space to kick start his venture. Jake can assign his space for the rest of the lease term to John through an assignment of lease. Jake will need to seek the approval of his landlord and then begin the assignment process. Here, Jake will be the assignor who transfers all his lease related duties and responsibilities to John, who will be the assignee.

You can read more on lease agreements here .

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Assignment of Lease From Seller to Buyer

In case of a residential property, a landlord can assign his leases to the new buyer of the building. The landlord will assign the right to collect rent to the buyer. This will allow the buyer to collect any and all rent from existing tenants in that property. This assignment can also include the assignment of security deposits, if the parties agree to it. This type of assignment provides protection to the buyer so they can collect rent on the property.

The assignment of a lease from the seller to a buyer also requires that all tenants are made aware of the sale of the property. The buyer-seller should give proper notice to the tenants along with a notice of assignment of lease signed by both the buyer and the seller. Tenants should also be informed about the contact information of the new landlord and the payment methods to be used to pay rent to the new landlord.

You can read more on buyer-seller lease assignments here .

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Owner and operator of Meek Law Firm, PC. Meek Law Firm provides comprehensive business law representation, precise and informed representation for real estate transactions in the commercial and residential markets of North and South Carolina and efficient succession and estate planning for business owners and individuals.

Graduated UF Law 1977. 40 years experience in Family Law/Divorce and Prenuptial Agreements. Rated "AV Preeminent" By Martindale Hubble, the oldest lawyer rating firm in the USA. Top 5% of attorneys in Florida as reviewed by Judges and other Lawyers (not client reviews). Personal prompt service and easy to contact--available 24/7. Good negotiator and very personable. My clients are my priority.

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~ Charles Kramer - Technology, Contracts and Intellectual Property Attorney ~ www.linkedin.com/in/charleskramer I am a New York corporate and technology attorney. My experience includes: - representing high-tech companies (including software, military, manufacturing and computer game companies) in connection with negotiating and drafting (1) toolkit, enterprise, Saas, PaaS and other complex agreements and licenses with companies around the world; (2) joint-venture, sales, publishing and distribution agreements; and (3) general corporate agreements. - 5 years as General Counsel of a software company (and many more years representing it as outside counsel); - 3 years as an associate in the Wall Street law firm of Lord, Day & Lord (then the oldest law firm in New York City practicing under the same name); and - speaking at conferences on legal issues including at the annual Game Developers Conference and Miller Freeman's Digital Video Conference. I am comfortable working in areas where the technology -- and the related law -- are new. My recent work includes working as a contract attorney (extended on a month-by-month basis) as American counsel for a publicly traded Swiss industrial corporation with responsibility for drafting form contracts for its planned "industrial internet of things" digital services. Accordingly I am comfortable working in a corporate environment using modern collaboration tools. Charles Kramer (917) 512-2721 (voice, voicemail, text)

Joe provides premium legal services to both individuals and businesses throughout the Commonwealth. Experience litigating civil and criminal matters, as well as drafting/negotiation transactional issues involving contracts, real estate, business formation, estate planning and more. Prior to entering private law practice, Joe worked for two decades in financial industry including regulatory and compliance for both national and regional banks and investment firms.

Driven attorney with a knack for alternative dispute resolution, real estate, corporate law, immigration, and basic estate planning, with superb people skills and high emotional intelligence, and for working smart and efficiently, as well as time and financial management skills to deliver excellent legal work and solutions to legal issues. Seasoned with 20+ years of law firm and legal experience (real estate/corporate).

Brittany T.

Brittany is an experienced attorney specializing in transactional and complex contract matters including but not limited to SaaS development and product implementation, technology/data agreements, licensing, and compliance. She has over 7 years of experience providing strategic legal advice to individuals and business clients of all sizes, from start-ups to large corporations. Brittany has a strong understanding of the legal issues related to technology and software and is well-versed in drafting and negotiating contracts ranging from software licenses to data sharing agreements. She is a highly-skilled negotiator and is adept at finding creative solutions to challenging legal issues.

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Contract to lease land from a church.

I’m planning on leasing land from a church. Putting a gym on the property. And leasing it back to the school.

Ok; first step is that you will need a leasing contract with the church. Ask them to prepare one for you so you would just need an attorney to review the agreement and that should cost less than if you had to be the party to pay a lawyer to draft it from scratch. You need to ensure that the purpose of the lease is clearly stated - that you plan to put a gym on the land so that there are no issues if the church leadership changes. Step 2 - you will need a lease agreement with the school that your leasing it do (hopefully one that is similar to the original one your received from the church). Again, please ensure that all the terms that you discuss and agree to are in the document; including length of time, price and how to resolve disputes if you have one. I hope this is helpful. If you would like me to assist you further, you can contact me on Contracts Counsel and we can discuss a fee for my services. Regards, Donya Ramsay (Gordon)

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other helpful articles

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• Property Lessons This Subject Area Index lists all CALI lessons covering Property Law.
• Lesson 1: Basic Future Interests: The Concept of "Future Interest" This lesson is part of a series of exercises covering Basic Future Interests. While the 10 lessons comprising this series can be worked in any sequence, the lessons do to some degree build on each other. Thus, it is suggested that students work them in order.
• Covenants of Title and Types of Deeds This lesson is designed to teach a student about the various types of covenants of title in deeds and the different types of deeds arising from the covenants they contain. Students who are unfamiliar with real covenants are advised to review the CALI lessons related to real covenants before trying this lesson.
• Distinction Between Real Property and Personal Property This lesson provides an introductory overview of the distinction between real property and personal property, including the historic origins of the distinction, the consequences of attaching things to land and severing things from land, the significance of fixtures, and examples of intangible property classified as real or personal property.
• Easements Defined This lesson introduces the law of easements by describing the typical scenario in which the need for an easement arises, examining alternatives to the creation of an easement, offering a legal definition of an easement, and summarizing the key sub-issues that arise in this legal area.
• The Estate System This lesson and Basic Future Interests are designed to provide a comprehensive interactive tutorial with a scope corresponding to the usual coverage of estates and elementary future interests in the typical first-year property course. They are designed to be useful either for review or as a "first learning exposure" to the subjects covered. The lessons consist of text screens that are regularly interleaved with questions to stimulate thought and reinforce students' learning as they go. Frequent questions are intended to help maintain interest as well as to help students become familiar with new vocabulary and concepts.
• Landlord and Tenant: An Introductory Lesson This lesson provides an introductory overview of landlord-tenant law, including: the historical origins of non-freehold estates; basic vocabulary of landlord-tenant law, including the concept of rent; the significance of leases as a mechanism for gaining the right to use and possess land; and the conveyance and contract theories of landlord-tenant law as alternative approaches for fashioning legal rules.
• Problems in Property Law Series I This series of three lessons consists chiefly of hypothetical factual situations designed to reinforce the student’s skills in applying the major principles and precepts of basic property law. The student is expected to determine the correct answers by reasoning from hypothetical facts through the applicable precepts and principles, rather than merely being able to identify the rules that apply. The program responds to student answers by suggesting, in windows on the screen, reasons which make the correct answers correct and the wrong answers incorrect. Use of these programs is even more effective in discussion groups of two or three, where the reasoning can be aired before answering.
• Problems in Property Law Series II This series of three lessons consists chiefly of hypothetical factual situations designed to reinforce the student’s skills in applying the major principles and precepts of basic property law. The student is expected to determine the correct answers by reasoning from hypothetical facts through the applicable precepts and principles, rather than merely being able to identify the rules that apply. The program responds to student answers by suggesting, in windows on the screen, reasons which make the correct answers correct and the wrong answers incorrect. Use of these programs is even more effective in discussion groups of two or three, where the reasoning can be aired before answering.
• Problems in Property Law Series III This series consists chiefly of hypothetical factual situations designed to reinforce the student's skills in applying the major principles and precepts of basic property law. The student is expected to determine the correct answers by reasoning from hypothetical facts through the applicable precepts and principles, rather than merely being able to identify the rules that apply. The program responds to student answers by suggesting, in windows on the screen, reasons which make the correct answers correct and the wrong answers incorrect. Use of these programs is even more effective in discussion groups of two or three, where the reasoning can be aired before answering.
• Rule Against Perpetuities PodCast Professors Brown and Grohman offer tips for mastering this complicated doctrine and explain the real-world reasons why students and attorneys need to understand the rule against perpetuities. This podcast discusses material covered in greater depth in Prof. Grohman's related lessons.

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How To Navigate The Real Estate Assignment Contract

What is assignment of contract?

Assignment of contract vs double close

How to assign a contract

Assignment of contract pros and cons

Even the most left-brained, technical real estate practitioners may find themselves overwhelmed by the legal forms that have become synonymous with the investing industry. The assignment of contract strategy, in particular, has developed a confusing reputation for those unfamiliar with the concept of wholesaling. At the very least, there’s a good chance the “assignment of contract real estate” exit strategy sounds more like a foreign language to new investors than a viable means to an end.

A real estate assignment contract isn’t as complicated as many make it out to be, nor is it something to shy away from because of a lack of understanding. Instead, new investors need to learn how to assign a real estate contract as this particular exit strategy represents one of the best ways to break into the industry.

In this article, we will break down the elements of a real estate assignment contract, or a real estate wholesale contract, and provide strategies for how it can help investors further their careers. [ Thinking about investing in real estate? Register to attend a FREE online real estate class and learn how to get started investing in real estate. ]

What Is A Real Estate Assignment Contract?

A real estate assignment contract is a wholesale strategy used by real estate investors to facilitate the sale of a property between an owner and an end buyer. As its name suggests, contract assignment strategies will witness a subject property owner sign a contract with an investor that gives them the rights to buy the home. That’s an important distinction to make, as the contract only gives the investor the right to buy the home; they don’t actually follow through on a purchase. Once under contract, however, the investor retains the sole right to buy the home. That means they may then sell their rights to buy the house to another buyer. Therefore, when a wholesaler executes a contact assignment, they aren’t selling a house but rather their rights to buy a house. The end buyer will pay the wholesale a small assignment fee and buy the house from the original buyer.

The real estate assignment contract strategy is only as strong as the contracts used in the agreement. The language used in the respective contract is of the utmost importance and should clearly define what the investors and sellers expect out of the deal.

There are a couple of caveats to keep in mind when considering using sales contracts for real estate:

Contract prohibitions: Make sure the contract you have with the property seller does not have prohibitions for future assignments. This can create serious issues down the road. Make sure the contract is drafted by a lawyer that specializes in real estate assignment contract law.

Property-specific prohibitions: HUD homes (property obtained by the Department of Housing and Urban Development), real estate owned or REOs (foreclosed-upon property), and listed properties are not open to assignment contracts. REO properties, for example, have a 90-day period before being allowed to be resold.

What Is An Assignment Fee In Real Estate?

An assignment fee in real estate is the money a wholesaler can expect to receive from an end buyer when they sell them their rights to buy the subject property. In other words, the assignment fee serves as the monetary compensation awarded to the wholesaler for connecting the original seller with the end buyer.

Again, any contract used to disclose a wholesale deal should be completely transparent, and including the assignment fee is no exception. The terms of how an investor will be paid upon assigning a contract should, nonetheless, be spelled out in the contract itself.

The standard assignment fee is $5,000. However, every deal is different. Buyers differ on their needs and criteria for spending their money (e.g., rehabbing vs. buy-and-hold buyers). As with any negotiations , proper information is vital. Take the time to find out how much the property would realistically cost before and after repairs. Then, add your preferred assignment fee on top of it.

Traditionally, investors will receive a deposit when they sign the Assignment of Real Estate Purchase and Sale Agreement . The rest of the assignment fee will be paid out upon the deal closing.

Assignment Contract Vs Double Close

The real estate assignment contract strategy is just one of the two methods investors may use to wholesale a deal. In addition to assigning contracts, investors may also choose to double close. While both strategies are essentially variations of a wholesale deal, several differences must be noted.

A double closing, otherwise known as a back-to-back closing, will have investors actually purchase the home. However, instead of holding onto it, they will immediately sell the asset without rehabbing it. Double closings aren’t as traditional as fast as contract assignment, but they can be in the right situation. Double closings can also take as long as a few weeks. In the end, double closings aren’t all that different from a traditional buy and sell; they transpire over a meeter of weeks instead of months.

Assignment real estate strategies are usually the first option investors will want to consider, as they are slightly easier and less involved. That said, real estate assignment contract methods aren’t necessarily better; they are just different. The wholesale strategy an investor chooses is entirely dependent on their situation. For example, if a buyer cannot line up funding fast enough, they may need to initiate a double closing because they don’t have the capital to pay the acquisition costs and assignment fee. Meanwhile, select institutional lenders incorporate language against lending money in an assignment of contract scenario. Therefore, any subsequent wholesale will need to be an assignment of contract.

Double closings and contract assignments are simply two means of obtaining the same end. Neither is better than the other; they are meant to be used in different scenarios.

Flipping Real Estate Contracts

Those unfamiliar with the real estate contract assignment concept may know it as something else: flipping real estate contracts; if for nothing else, the two are one-in-the-same. Flipping real estate contracts is simply another way to refer to assigning a contract.

Is An Assignment Of Contract Legal?

Yes, an assignment of contract is legal when executed correctly. Wholesalers must follow local laws regulating the language of contracts, as some jurisdictions have more regulations than others. It is also becoming increasingly common to assign contracts to a legal entity or LLC rather than an individual, to prevent objections from the bank. Note that you will need written consent from all parties listed on the contract, and there cannot be any clauses present that violate the law. If you have any questions about the specific language to include in a contract, it’s always a good idea to consult a qualified real estate attorney.

When Will Assignments Not Be Enforced?

In certain cases, an assignment of contract will not be enforced. Most notably, if the contract violates the law or any local regulations it cannot be enforced. This is why it is always encouraged to understand real estate laws and policy as soon as you enter the industry. Further, working with a qualified attorney when crafting contracts can be beneficial.

It may seem obvious, but assignment contracts will not be enforced if the language is used incorrectly. If the language in a contract contradicts itself, or if the contract is not legally binding it cannot be enforced. Essentially if there is any anti-assignment language, this can void the contract. Finally, if the assignment violates what is included under the contract, for example by devaluing the item, the contract will likely not be enforced.

How To Assign A Real Estate Contract

A wholesaling investment strategy that utilizes assignment contracts has many advantages, one of them being a low barrier-to-entry for investors. However, despite its inherent profitability, there are a lot of investors that underestimate the process. While probably the easiest exit strategy in all of real estate investing, there are a number of steps that must be taken to ensure a timely and profitable contract assignment, not the least of which include:

Find the right property

Acquire a real estate contract template

Submit the contract

Assign the contract

Collect the fee

1. Find The Right Property

You need to prune your leads, whether from newspaper ads, online marketing, or direct mail marketing. Remember, you aren’t just looking for any seller: you need a motivated seller who will sell their property at a price that works with your investing strategy.

The difference between a regular seller and a motivated seller is the latter’s sense of urgency. A motivated seller wants their property sold now. Pick a seller who wants to be rid of their property in the quickest time possible. It could be because they’re moving out of state, or they want to buy another house in a different area ASAP. Or, they don’t want to live in that house anymore for personal reasons. The key is to know their motivation for selling and determine if that intent is enough to sell immediately.

With a better idea of who to buy from, wholesalers will have an easier time exercising one of several marketing strategies:

Direct Mail

Real Estate Meetings

Local Marketing

2. Acquire A Real Estate Contract Template

Real estate assignment contract templates are readily available online. Although it’s tempting to go the DIY route, it’s generally advisable to let a lawyer see it first. This way, you will have the comfort of knowing you are doing it right, and that you have counsel in case of any legal problems along the way.

One of the things proper wholesale real estate contracts add is the phrase “and/or assigns” next to your name. This clause will give you the authority to sell the property or assign the property to another buyer.

You do need to disclose this to the seller and explain the clause if needed. Assure them that they will still get the amount you both agreed upon, but it gives you deal flexibility down the road.

3. Submit The Contract

Depending on your state’s laws, you need to submit your real estate assignment contract to a title company, or a closing attorney, for a title search. These are independent parties that look into the history of a property, seeing that there are no liens attached to the title. They then sign off on the validity of the contract.

4. Assign The Contract

Finding your buyer, similar to finding a seller, requires proper segmentation. When searching for buyers, investors should exercise several avenues, including online marketing, listing websites, or networking groups. In the real estate industry, this process is called building a buyer’s list, and it is a crucial step to finding success in assigning contracts.

Once you have found a buyer (hopefully from your ever-growing buyer’s list), ensure your contract includes language that covers earnest money to be paid upfront. This grants you protection against a possible breach of contract. This also assures you that you will profit, whether the transaction closes or not, as earnest money is non-refundable. How much it is depends on you, as long as it is properly justified.

5. Collect The Fee

Your profit from a deal of this kind comes from both your assignment fee, as well as the difference between the agreed-upon value and how much you sell it to the buyer. If you and the seller decide you will buy the property for $75,000 and sell it for $80,000 to the buyer, you profit $5,000. The deal is closed once the buyer pays the full $80,000.

Assignment of Contract Pros

For many investors, the most attractive benefit of an assignment of contract is the ability to profit without ever purchasing a property. This is often what attracts people to start wholesaling, as it allows many to learn the ropes of real estate with relatively low stakes. An assignment fee can either be determined as a percentage of the purchase price or as a set amount determined by the wholesaler. A standard fee is around $5,000 per contract.

The profit potential is not the only positive associated with an assignment of contract. Investors also benefit from not being added to the title chain, which can greatly reduce the costs and timeline associated with a deal. This benefit can even transfer to the seller and end buyer, as they get to avoid paying a real estate agent fee by opting for an assignment of contract. Compared to a double close (another popular wholesaling strategy), investors can avoid two sets of closing costs. All of these pros can positively impact an investor’s bottom line, making this a highly desirable exit strategy.

Assignment of Contract Cons

Although there are numerous perks to an assignment of contract, there are a few downsides to be aware of before searching for your first wholesale deal. Namely, working with buyers and sellers who may not be familiar with wholesaling can be challenging. Investors need to be prepared to familiarize newcomers with the process and be ready to answer any questions. Occasionally, sellers will purposely not accept an assignment of contract situation. Investors should occasionally expect this, as to not get discouraged.

Another obstacle wholesalers may face when working with an assignment of contract is in cases where the end buyer wants to back out. This can happen if the buyer is not comfortable paying the assignment fee, or if they don’t have owner’s rights until the contract is fully assigned. The best way to protect yourself from situations like this is to form a reliable buyer’s list and be upfront with all of the information. It is always recommended to develop a solid contract as well.

Know that not all properties can be wholesaled, for example HUD houses. In these cases, there are often anti-assigned clauses preventing wholesalers from getting involved. Make sure you know how to identify these properties so you don’t waste your time. Keep in mind that while there are cons to this real estate exit strategy, the right preparation can help investors avoid any big challenges.

Assignment of Contract Template

If you decide to pursue a career wholesaling real estate, then you’ll want the tools that will make your life as easy as possible. The good news is that there are plenty of real estate tools and templates at your disposal so that you don’t have to reinvent the wheel! For instance, here is an assignment of contract template that you can use when you strike your first deal.

As with any part of the real estate investing trade, no single aspect will lead to success. However, understanding how a real estate assignment of contract works is vital for this business. When you comprehend the many layers of how contracts are assigned—and how wholesaling works from beginning to end—you’ll be a more informed, educated, and successful investor.

Click the banner below to take a 90-minute online training class and get started learning how to invest in today’s real estate market!

What is an STR in Real Estate?

Wholetailing: a guide for real estate investors, what is chain of title in real estate investing, what is a real estate fund of funds (fof), reits vs real estate: which is the better investment, multi-family vs. single-family property investments: a comprehensive guide.

20 Property law assignment topics

20 Property law assignment topics – property law is a vast field with various intriguing aspects to explore. Here are 20 assignment topics:

• Adverse Possession Laws: A Comparative Analysis: Compare and contrast adverse possession laws in different jurisdictions and analyze their impact on property rights.
• Eminent Domain and Property Rights: Explore the concept of eminent domain, its application and impact on property rights and compensation for property owners.
• Intellectual Property Rights and Digital Media: Discuss the challenges and implications for intellectual property rights in the digital age by considering issues such as copyright, patents and online piracy.
• Property Rights in the Age of Blockchain: Explore the potential impact of blockchain technology on property law, particularly regarding ownership, smart contracts, and decentralized property records.
• Property Rights and Environmental Conservation: Analyze conflicts and solutions between property rights and environmental conservation efforts, focusing on cases involving public versus private interests.
• Real Estate Investment and Property Law: Examine the legal implications and challenges of real estate investment, including property acquisition, zoning laws, and landlord-tenant relationships.
• Cultural Heritage and Property Law: Explore the intersection of property law and cultural heritage by examining the legal protection of cultural sites and works of art.
• Property Rights in Marriage and Divorce: Discuss the division of property in marriage and divorce cases, considering prenuptial agreements, community property, and equitable distribution.
• Tenant Rights and Landlord Responsibilities: Check the legal rights and responsibilities of tenants and landlords, including lease agreements, eviction laws and maintenance obligations.
• Property Law in the Gig Economy: Examine the challenges and legal implications of property rights in the gig economy by considering issues such as ownership of digital assets and use of shared assets.
• Homeownership and Foreclosure Laws: Analyze the legal process and consequences of foreclosure, examining the rights of homeowners and lenders in such cases.
• Property taxation and its legal framework: Discuss the legal aspects of property taxation, including assessment, exemptions and challenges in property related tax laws.
• Water Rights and Property Law: Explore the complexities of water rights as a form of property, analyze laws governing water use, riparian rights and prior appropriation.
• Property Rights in Intellectual Creation: Examine the legal protection of intellectual property, including patents, trademarks, and copyrights, and their impact on innovation and creativity.
• Property Rights in the Sharing Economy: Examine property rights and legal challenges in the sharing economy by considering platforms such as Airbnb, Uber, and other sharing services.
• Zoning Laws and Land Use Regulations: Discuss the legal framework of zoning laws, examine their impact on land use, development and community planning.
• Property Law and Public Policy: Analyze the relationship between property law and public policy, cases in which policy decisions affect property rights.
• Artificial Intelligence and Property Law: Explore the legal implications of AI-generated creations in property law, considering issues of ownership and authorship.
• Property Dispute Resolution Mechanisms: Discuss the various methods of resolving property disputes, including litigation, arbitration and mediation, evaluating their effectiveness.
• Future Trends in Property Law: Predict the future of property law by considering technological advances, societal changes and their impact on property rights and regulations.

These topics cover a wide range of issues in property law, with opportunities to explore areas of particular interest or emerging trends in the field.

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Property Law – JURI 550

CG • Section • 12/17/2019 to 05/25/2020 • Modified 01/04/2024

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A study of the fundamental precepts applicable to real and personal property. Aspects of real property covered are possessory estates and interests, as well as joint and concurrent ownership. A study of the rights, duties, and liabilities of landlords and tenants; acquisition, ownership, and transfer of property; rights of possession; donative transactions; issues in the conveyancing system; and governmental regulations.

For information regarding prerequisites for this course, please refer to the  Academic Course Catalog .

Within the overarching mission of the School of Law, the purpose of the Juris Master Property Law course is to equip the student with knowledge and understanding to handle issues related to real and personal property as they arise in his/her particular vocation. Since property law is central to nearly every area of personal, family, community, and national life, it ought to be seen as an instrument through which the student fulfills a Christian worldview. This worldview can be shown by the student maintaining and expressing him/herself with and through property, creating property through imaginative use of the mind, and engaging in productive work as a diligent steward of property. Therefore, the course provides the student with an overview of property law and assists in the development of skillful understanding and application of the fundamental rules of property law.

Course Assignment

Textbook readings and lecture presentations

Course Requirements Checklist

After reading the Course Syllabus and Student Expectations , the student will complete the related checklist found in the Course Overview.

Discussions (2)

Discussions are collaborative learning experiences. Therefore, the student is required to create the first thread with one reply ( Discussion: Theories of Property & Property Rights ) and a second thread with one reply ( Discussion: U.S. Supreme Court Takings Case ) in response to the provided prompt for each Discussion. Each thread must be 500–600 words and demonstrate course-related knowledge. Each reply must be at least 250–300 words. For each Discussion, the student is required to post a thread and then post one reply. The reply will critique another classmate’s thread. The student must insert footnotes in all threads and replies, using The Bluebook: A Uniform System of Citation book (19th ed. or more recent) citation format to reference the textbook, the Bible passages in the prompt, Bible commentaries, or other scholarly articles that support the student’s assertions.

Paper: Application of Law Assignment

The student will write a 2-3 page paper that focuses on how the material covered thus far in this Property Law course applies either to the student's current vocation or to the student's personal situation.  The student will identify specific portions of the textbook that have informed the student about the law regarding the landlord-tenant or real estate purchase-sale transaction. Though this is a personal, subjective type of paper, the student must incorporate at least 3 references from the textbook, the Bible, or other professional sources to explain how the course material applies to him/her. The student must insert footnotes using The Bluebook: A Uniform System of Citation book (19th ed. or more recent) citation format to reference the textbook, the Bible, or other professional sources that support the student’s assertions.

The student will write a summary of at least 3 pages each in outline form. Topics will include the different estates in land and forms of concurrent ownership. The paper must include footnote references for each category of the estates in land and concurrent ownership. The student must insert footnotes using The Bluebook: A Uniform System of Citation book (19th ed. or more recent) citation format to reference the textbook, cases, statutes, or other legal sources that support the student’s summary.

The student will write a summary of at least 3 pages each in outline form. The topic for the Servitudes Assignment covers the different forms of servitudes that affect land. The paper must include footnote references for each category of servitudes. The student must insert footnotes using The Bluebook: A Uniform System of Citation book (19th ed. or more recent) citation format to reference the textbook, cases, statutes, or other legal sources that support the student’s summary.

Quizzes (4)

Each Quiz will cover the Learn material for the assigned Module: Week. Each Quiz contains 25 multiple-choice questions, is limited to one hour, and will be open-book/open-notes.

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105 interesting property law topics for your paper.

Before you assess custom research topics in real estate, what is property law? You should even know the types of property law because they encompass what are considered legal properties. What is even legal property in property law?

Property law is a section of the law that oversees the legality of real property or personal property ownership. It evaluates and protects claims to resources as an object of legal rights. This extends to intellectual property laws also.

These laws are the engaging and intriguing parts of English common law that embrace possession of wealth collectively or individually. The two basic types of property law are real property and personal property.

Real property is an immovable property that could be land and anything found inside or on it. This could be an erected building or mineral resource. On the other hand, personal property refers to movable properties like stocks, money, notes, copyrights, patents, and other forms of intangible property. How do you structure your research after choosing a topic property law?

Outline Of A Good Property Law Research Paper

Selecting a topic is one of the most dreaded parts of research for students. However, your topic from these 105 topics must be potentially engaging. It should also be a topic you could perform your best on. It would help if you found an argument, defined your audience, and conducted research that could include:

• Introduction: Your introduction determines whether a reader will keep reading or drop your work. You must hook a reader with intriguing insights about property law and what you’ve set out to do with your research. You must also include your thesis statement, which is a brief analysis of what your research is about.
• Body: This is the main subject where you present your arguments. Facts must accompany your arguments. This makes your work more of high quality and scholarly work. You must, of course, consult reliable sources to back up the case studies you cite as well as the points you make.
• Conclusion: This is where you summarize your arguments. You get to state your most vital points, give a general overview, and state your resolution based on the facts you’ve considered. All these will help you create a well written paper or essay.

Now that you know what property law is and how to outline property law research, attempt any of these questions or topics from our best research proposal writing services :

Easy Real Estate Law Questions

Real estate is an essential part of entrepreneurial and academic fields. There are numerous research topics in real estate which concern the stages of progress in a country or how the value or properties have diminished or increased. Consider these good questions:

• Examine how real estate value can be protected during investment risks.
• Analyze the real estate policy framework of the previous century and how it affects this century’s policy.
• What is the basis of equity markets and institutional investors?
• What is the criticism of real estate policies from the Marxist view?
• What is the definition of real estate from the liberal lens?
• Examine the geography of finance and real estate.
• Examine the risks and opportunities associated with real estate in any country of your choice.
• What are the pillars financing real estate in any state of your choice?
• How do federal laws guide personal properties?
• What is the role of the internal revenue service of the UK in real estate?
• How does real estate help with alleviating the unemployment problem in the US?
• Examine the effect of a commercial advertisement for residential home sale.
• Why does property value diminish?
• Identify what a real estate transaction is, citing three case studies.
• Examine the legal requirements for mortgaging a property.
• Examine the safety practices for building in the US.
• Criticize the environmental contamination Regulations affecting real estate in the UK.
• What are the challenges facing rural real estate outfits?
• Examine the challenges of legal debt in real estate.
• What does estate law say in the construction of underground storage tanks?

Hot Topics Real Estate

Real estate encompasses land, buildings, natural resources, and other forms of immovable properties. As an interesting part of any society, there is a need for advanced topics on legal properties and what protects business owners. All these real estate law issues birth the following potential in depth research idea on the subjects:

• Examine the symbiosis between sales prices and building costs.
• Do housing regulators in real estate have any significance?
• What are the fundamental economic indicators for investment in real estate?
• Examine the scale of low interest in buying homes due to COVID-19.
• Examine in detail how COVID-19 affected real estate.
• Examine why homeowners are complaining about the rise of mortgage rates and what led to it.
• Analyze the factors to be considered when investing in a real estate company.
• Examine the ways interest rates and taxes affect real estate.
• Evaluate the importance of the environment in valuing a property.
• Evaluate the reasons why some buy homes rather than build theirs.
• Examine the factors that facilitate the rise of properties in recent times.
• Evaluate the implication of shortage of skilled workers in the US and how it affects real estate.
• Examine the impact of varied stocks on homeowners.
• Evaluate the growth of private housing units in the UK.
• Discuss the essence of real estate in a recession.
• Examine the future of real estate in the UK.
• Discuss the future of the real estate market in the US.
• Examine how real estate has boomed the economy of any country of your choice.
• Evaluate the role of the National Association of Home Building in real estate.
• Examine how real estate agents affect the industry.
• Evaluate the limitations of legal laws on real estate.
• Examine the professionalism feature of real estate practice.
• Examine the trends of the real estate market in any country of your choice.
• How do buyer choices impact real estate decisions?
• What are the professional ethics and legal practices in real estate?

Easy Research Topics In Real Estate

If you want to know more about the present and the future, conducting in depth research into real estate could help. Dissecting these advanced topics on real estate could get you the best grades in school. Attempt any of these legal property law topics:

• Project the future of real estate in the UK.
• Examine the current trends, give a review of the evolution of real estate.
• Examine the differences between real estate and personal property laws.
• Evaluate the reasons for the focus on urban centers.
• Do you think rural infrastructural development could help with rural real estate outreach?
• Give detailed research on how home prices affect buyer choices post-pandemic.
• What has led to the reduction in the construction of residential homes in any country of your choice?
• Examine the ways the Black Lives Matter movement affected real estate.
• Examine long term impending challenges over real estate.
• Examine how scammers maximize the real estate and their strategies.
• Discuss the latest technology and trends in real estate and how to maximize them.
• Examine the recent approach for home selling and buying.
• Analyze the tax shelter strategy as a real estate business owner.
• Discuss the concept of liability in real estate.
• Give a deep evaluation of mortgage lending discrimination.
• Assess how corporate companies invest in real estate.
• What are the factors that make an investment reliable?
• Examine the reasons why some investors avoid luxury real estate.
• Evaluate the role of active manageent and expertise in real estate.
• Analyze the Property markets filled by private and public investments in any country of your choice.

Intellectual Property Law Topics

Intellectual property is about the laws that protect the unauthorized use of human intellect by other people. This is a critical part of private and public use of intellectual properties. As a crucial part of the law, examine these topics:

• Compare and contrast the law guiding patent rights in Europe.
• Examine the process, in detail, of applying for a Patent.
• Evaluate what patent appeal encompasses.
• Give a thorough overview of patent infringement using three or five case studies.
• Examine the reasons for injunctions and restraining orders in patent.
• Examine the types of patent and analyze them According to the existing literature.
• Examine the processes of gaining licensing.
• Analyze the difference between royalties and taxes.
• Examine the role of royalties in licensing interventions.
• Give a thorough overview of what copyright infringement is all about in the UK.
• Give a comprehensive overview of what copyright infringement is all about in the US.
• Examine the process of registering copyright.
• How do trademark work?
• Examine the importance of architecture in copyright law.
• Examine the process of destroying copyrighted works.
• Evaluate the basis of the software development agreement.
• Choose any entertainment country of your choice and examine the intellectual property scandal against them.
• Examine the scandal between HBO and Dave Chappelle.
• Examine the intellectual property Agreements of Netflix with any entertainer or brand of your choice.
• Examine the ways through which officials manipulate people into signing bad deals.

Research Topics in Intellectual Property Law

Part of the law that refers to offering exclusive rights for certain creative activities protects an individual is intellectual property law. In other words, without the owner’s permission, a work can neither be used, copied, or rewritten/redone. As students, you may need to clarify this with advanced research. You can consider these topics:

• Examine how freedom operate in US law.
• How can an individual file a provisional patent application?
• Evaluate the essence of intellectual properties for social media influencers.
• Where is the place of content creators in intellectual property?
• Using examples, what are the ways to strengthen patents?
• Examine the critical features of copyright expiration.
• Examine what “works in public domain” means.
• How does playing in restaurants or stores could be tantamount to copyright infringement?
• What do arbitrary trademark and service marks encompass?
• Evaluate the registration process of trademark of any company of your choice.
• Choose three companies and assess their conflicts on an unregistered trademark.
• Evaluate nondisclosure agreements concerning intellectual properties.
• Discuss the role of nondisclosure agreements in securing trade secrets.
• Examine the strategies used by scammers to rob owners of Intellectual property rights.
• Discuss the evolution of copyright and patent in the English common law.
• Assess the nature of real estate companies and the essence of copyright laws.
• Attempt a guide to publishers of ebooks on how to retain copyright over their works.
• Discuss the factors that could lead to a loss of Intellectual ownership.
• Examine the trend in the law regarding social media content creators.
• Criticize any perspective you consider absurd in common about intellectual property rights.

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If you squat in a vacant property, does the law give you the house for free? Well, sort of

Professor in Law, Macquarie University

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Cathy Sherry does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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Nothing excites law students like the idea of a free house. Or alternatively, enrages them. It depends on their politics. As a result, academics condemned to teaching property law find it hard to resist the “ doctrine of adverse possession ”. The fact that a person can change the locks on someone else’s house, wait 12 years, and claim it as their own, makes students light up in a way that the Strata Schemes Management Act never will.

The idea of “squatters’ rights” has received a lot of media attention recently amid the grim reality of the Australian housing market. It fuels commentators such as Jordan van den Berg, who critiques bad landlords on social media. Casting back to his days as a law student, he’s promoting the doctrine of adverse possession as a way of making use of vacant properties.

As interesting as the doctrine is, it has little relevance in modern Australia. While it is necessary to limit the time someone has to bring legal proceedings to recover land – typically 12 or 15 years, depending on which state you’re in – most people don’t need that long to notice someone else is living in their house. If a family member is occupying a home that someone else has inherited or a tenant refuses to vacate at the end of a lease, owners tend to bring actions to recover their land pronto.

So where did this doctrine come from, and what has it meant in practice?

Read more: Rent freezes and rent caps will only worsen, not solve Australia's rental crisis

Free house fetching millions

In unusual circumstances, people can lose track of their own land.

Just before the second world war, Henry Downie moved out of his house in the Sydney suburb of Ashbury. Downie died a decade later, but his will was never administered. At the time of his death, a Mrs Grimes rented the house and did so for a further 50 years. Downie’s next of kin did not realise they had inherited the house or that they were Grimes’s landlord.

Grimes died in 1998 and Bill Gertos, a property developer, saw the house was vacant. He changed the locks, did some repairs, then leased the house and paid the rates for the next 17 years. He then made an application under NSW property laws to become the registered proprietor. At this point, Downie’s next of kin became aware they may have been entitled to the property and disputed Gertos’s claim.

The court held Gertos had been “in possession” of the property since the late 1990s. The next of kin had a legal right to eject him, but they had failed to do so within the statutory time limit of 12 years. Gertos had the best claim to the house. He promptly sold it for A$1.4 million.

Outrageous as this may seem, the law encourages caring for land. If you fail to take responsibility for your land, and someone else does, you can lose it.

An old English tradition

Gertos’s jackpot was unusual, and adverse possession has always been more relevant in a country like England.

First, for much of English history, many people did not have documentary title (deeds) to their land. People were illiterate, parchment was expensive, and documents could disappear in a puff of smoke in a house fire. The law often had to rely on people’s physical possession of land as proof of ownership.

Read more: What's the best way to ease rents and improve housing affordability? We modelled 4 of the government's biggest programs

Second, as a result of feudalism, vast swathes of England were owned by the aristocracy. They and their 20th-century successors in title, often local councils, had a habit of forgetting they owned five suburbs in London.

In the post second world war housing crisis, thousands of families, and later young people and students, squatted in vacant houses owned by public and private landlords who lacked the means or motivation to maintain them.

A sign of the times

In contrast, in Australia, for most of our settler history, governments of all political persuasions actively prevented the emergence of a landed class.

But now, courtesy of tax policies that encourage investment in residential real estate, we have a landlord class of Baby Boomer and Gen X investors. That has caused housing market stress as younger people cannot make the natural transition from being renters to homeowners. They are outbid by older, wealthier buyers whose tax benefits from negative gearing increase with every dollar they borrow to buy an investment property.

Money flowing into the market then means that landlords’ greatest benefit is capital gain rather than income, and thanks to John Howard, investors pay no tax on half of that gain.

Finally, an almost exclusive reliance by government on the private sector to provide new homes – which it will only do if it is making a profit – has left many people in deep housing stress.

While squatters in Australia are likely to find themselves swiftly subject to court orders for ejection, van den Berg’s rallying cry indicates just how inequitable the housing market has become. Baby Boomers and Gen X should be on notice – young people want their housing back.

Read more: Stamp duty is holding us back from moving homes – we've worked out how much

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Landowner scores Supreme Court win in property rights case

By Niina H. Farah | 04/12/2024 01:47 PM EDT

The justices ordered more review to determine if a California county traffic impact fee violated the takings clause of the U.S. Constitution.

George Sheetz in front of his home in El Dorado County, California. Pacific Legal Foundation/Flickr

The Supreme Court handed a California landowner a narrow win Friday, when the justices unanimously ruled that a lower bench had to evaluate whether a county fee to fund infrastructure upgrades violated constitutional protections for individual property rights.

The justices directed a state court to review whether El Dorado County had violated the takings clause when it required George Sheetz to pay a traffic impact fee of more than $23,000 as a condition of building a prefabricated home on a parcel of land he owned. The clause guarantees that private property owners are entitled to just compensation if private property is taken for public use.

The ruling rejected the findings of the California Court of Appeal, which ruled that a legal test used to decide whether fees were fair did not apply in this case. The case is now being sent back to determine if the fee violated the takings clause.

The state appeals court had found that permit conditions were only subject to review under the two-part test — referred to as the Nollan/Dolan test — when fees were imposed by administrators. But in this case, the fee was levied under the County Board of Supervisors’ general plan.

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US Judge Shopping Curb Thwarted as Texas Court Resists (3)

By Jacqueline Thomsen

A Northern Texas federal court that has come under fire for judge shopping practices by litigants won’t change its case assignment policies — leaving few other plausible pathways to address the issue.

Majority Leader Chuck Schumer (D-N.Y.) said Monday the “Senate will consider legislative options” after US Chief District Judge David Godbey told him in a letter that Northern District assignment rules would stay in place. However, partisan divisions make it unlikely that Congress could pass a bill addressing judge shopping.

“It’s hard to imagine legislation getting out of Congress—even though it should be a no-brainer,” said Stephen Vladeck, a law professor at the University of Texas at Austin School of Law.

That leaves a Supreme Court decision addressing the topic or a lengthy rulemaking process among the only viable paths for a nationwide curb, and there’s disagreement within the judiciary whether it even have the authority to adopt such a measure.

The Northern District in particular has been criticized for its case assignment policies that result in lawsuits being filed in certain divisions automatically being heard by specific judges. US District Judge Matthew Kacsmaryk, who hears all civil cases filed in Amarillo, in particular has seen his court become the focus of scrutiny over judge shopping, as conservatives file challenges there including one to the abortion pill mifepristone.

The federal judiciary’s policy-making body, the Judicial Conference, last month adopted a policy urging courts to change their case assignment procedures to avoid litigants filing in courts where they think they’re more likely to have a favorable outcome. In guidance issued by a judicial committee, district courts were told that cases seeking national or state-wide relief should be randomly assigned throughout the full district.

In the letter released Monday, Godbey wrote that he and the other judges in his district met on March 27, and the “consensus was not to make any change to our case assignment process at this time.”

Schumer had urged Godbey in a March 21 letter to adopt such a policy “as soon as possible.” The top Senate Democrat referenced a previous letter exchange with the judge, saying the “logistical issues” that were raised then wouldn’t apply here, as only a few civil cases would be affected by the change.

Some top Senate Republicans urged chief judges to ignore the policy when it was initially thought to be mandatory. In a follow-up letter to top judiciary officials also sent last week, Senate Minority Leader Mitch McConnell (R-Ky.) and others said they were “pleased that the judiciary has chosen not to interfere in the legislative process.”

A federal judiciary advisory committee is separately weighing a rule addressing forum shopping. However, during its most recent public meeting in January, members raised concerns that they might lack the authority to pass such a rule, but said they should keep studying the issue in case Congress decides to take action on it. A federal statute currently says that case assignment rules are set by chief district judges.

The Justice Department has pushed back against the idea the committee lacks the authority to create such a rule, and has argued that the courts could adopt a number of proposed policies to address judge shopping worries.

Amanda Shanor, assistant professor of legal studies and business ethics at the the Wharton School of the University of Pennsylvania, has called for such a rule to be implemented. She said that a binding rule can be created under an act that allows the Supreme Court to set the rules of procedure for federal courts.

“The actions of the Northern District of Texas clearly demonstrate that a rule is still needed despite the policy,” Shanor said.

Vladeck said that he thinks the focus might shift to the Supreme Court, either through its rulings or its role in changing the federal rules on how civil cases proceed through courts. “But the more the Northern District becomes an outlier nationwide, the more I have to think it’s only underscoring why random assignment is better for all involved,” he added.

To contact the reporter on this story: Jacqueline Thomsen in Washington at [email protected]

To contact the editors responsible for this story: Seth Stern at [email protected] ; John Crawley at [email protected]

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Missouri legislators work to fix 2023 law freezing property taxes for seniors

The Missouri General Assembly passed a bill last year that froze property taxes for seniors, but left many questions about the details of its implementation unanswered.

Legislation from Sen. Tony Luetkemeyer, the sponsor of last year’s bill , now seeks to clarify certain points that left some municipalities confused about how to implement the freeze.

“Last year, I filed a bill, that was Senate Bill 190, which authorized a property tax credit on the primary residence of Missouri's seniors homes, effectively freezing their property taxes once they reach the age of eligibility for Social Security benefits,” Luetkemeyer said. “This offers predictability to seniors ensuring increased property taxes will never force them out of their homes.”

Under the bill passed in 2023, seniors receiving Social Security checks were eligible to receive property tax credits equal to the difference between their frozen property tax rate on the year they became eligible and the current amount of the property tax.

Counties were required to opt into the program in order for seniors to qualify. But if a county chose not to, citizens can use a ballot measure to put the question of freezing property taxes for seniors before the voters. Both Greene and Boone counties have implemented the tax freeze.

The legislation also allowed certain taxpayers who met income requirements to deduct 100% of some retirement and Social Security benefits from their taxable income.

However, questions arose surrounding the eligibility of all senior citizens, when the legislation took effect and whether it applied to property tax as a whole or just the counties’ portion. As the 2023 bill was written, the property tax freeze only extended to those receiving Social Security retirement benefits and included all property taxes.

Luetkemeyer’s current legislation, which is making its way through the Missouri House, adds clarification to his former bill by specifying that the property tax freeze is available to eligible homeowner taxpayers who are 62 or older.

“Senate Bill 756 changes the eligibility language to an age based eligibility 62 years of age or older so that it does not inadvertently exclude certain taxpayers who do not qualify for Social Security, such as those on public pensions,” Luetkemeyer said.

Some counties imposed limits on giving tax breaks to seniors with homes valued at more than $500,000, but Luetkemeyer’s bill would prohibit this practice by limiting “the definition or scope of ‘eligible credit amount’ or ‘eligible taxpayer’ as defined” in state statute.

Also, the legislation would prohibit homeowners from buying low-valued properties, locking in a low property tax and then making substantial improvements to the property that raise the property value.

Additionally, any senior that is delinquent in paying their property taxes would not be eligible for the tax credit until their account has been made current. This was a point of contention among lawmakers on the House committee, some of whom argued that this particular provision disregarded the needs of low-income seniors who are already struggling to pay their bills.

"If we're here to support wealthy seniors and freeze all of their taxes while leaving the low-income seniors behind, let's adopt this," said Rep. Mark Matthiesen, R-O'Fallon.

It also allows for increases to be made if the property is part of annexed territory included in a new taxing jurisdiction, but can then be locked in at the new tax rate to prevent future increases.

The property tax credit will be displayed on statements of taxes owed that are sent to taxpayers by county collectors. 

More: Greene County adopts retiree tax freeze despite lack of clarity from state

Luetkemeyer’s legislation has passed in the Missouri Senate, and was passed by the House Special Committee on Property Tax Reform on Wednesday. 

The House committee considered amending the bill to require annual applications for the tax credit for audit purposes, but the motion failed due to concern that, due to disfunctions in the Missouri Senate, changing the Senate bill in any way would ultimately result in the bill failing to pass before the end of session.

Many members of the House committee acknowledged that the bill was imperfect for a variety of reasons, however it was a necessary fix for legislation that had already raised concerns about its implementation following the passage of the first bill in 2023.

"I would recommend that we pass this and then come back with a fervor next year and fix whatever needs fixing," said Rep. Darin Chappell, R-Rogersville. "And for those of us who are freshmen, let this be a lesson we'll learn that maybe we ought to pay more attention before we actually pass bills that are improperly written in the first place."

On April 3, the House Special Committee on Property Tax Reform held a public hearing on the legislation, in which Rep. Jim Murphy, R-St. Louis, inquired as to why this legislation didn’t automatically apply statewide, rather than requiring counties to opt into the program.

Luetkemeyer explained that he was concerned that doing so would run afoul of the Hancock Amendment, the 1980s Missouri constitutional amendment that placed limits on changing statewide taxation.

“We went through this with legislative research last year, and we felt that we might run into constitutional issues,” Luetkemeyer said.

Greene County Collector of Revenue Allen Icet spoke in favor of the legislation, stressing the importance of the clarifications in implementing last year’s bill.

“I'll just say from the county's perspective, we really need this fix so as to reduce the opportunity to be sued because one county does it one way and the adjoining county does it completely differently,” Icet said.

Speaking in opposition to the legislation was David Stokes, director of municipal policy for the Show-Me Institute. He contends that counties should be allowed to impose their own local variances in implementing the bill.

“Counties are different and one size fits all, doesn't always apply,” Stokes said. “I think there's a reason to allow counties to impose their own eligibility requirements.”

He gave the example of Boone County’s recent implementation of the bill, pointing to the fact that the population skews younger in the county, meaning that this legislation will have less of an impact on the taxes that are collected from its residents.

However, the situation is different in other areas of the state, where the population skews older, meaning that local school, fire and ambulance districts that receive their funding partly from property tax will be disproportionately affected. 

One specific example is the City of St. Louis and St. Louis County, which capped the appraisal value of a home eligible for the credit at $500,000 and $550,000, respectively.

“Let's not forget that seniors are the wealthiest sector of our population, so eliminating the wealthier part of the senior community from the program, I think it's something the counties should be allowed to do,” Stokes said. 

This legislation will now proceed to the Missouri House for consideration by the body. With less than six weeks left in the session, the timetable is tight to get it and all other legislation across the finish line.

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OPINION ANALYSIS

Court rules for property owner in building fee dispute.

California homeowner George Sheetz won a victory at the Supreme Court on Friday in his challenge to the constitutionality of a fee that he was required to pay the county to receive a permit to build his home. In a unanimous decision authored by Justice Amy Coney Barrett, the justices agreed with Sheetz that conditions on building permits should be subject to heightened scrutiny even if they were authorized by legislation, rather than imposed on an individual basis by administrators.

The decision was a relatively narrow one that did not come as much of a surprise after the oral argument in January, at which Justice Neil Gorsuch had observed that both Sheetz and the county were in “radical agreement” on the question that the court had agreed to decide. The justices on Friday answered only that question – in Sheetz’s favor – and sent the case back to the state courts for another look in light of the Supreme Court’s decision.

The dispute began in 2016, when Sheetz wanted to build a manufactured home on a lot that he owns in Placerville, Calif. El Dorado County, where the lot is located, told Sheetz that he would be required to pay “traffic impact mitigation fees” before he could receive a building permit. Sheetz paid the fee, but he also went to state court to challenge the fee’s constitutionality.

Sheetz argued that the fee violated the Fifth Amendment’s takings clause, which bars the government from taking private property for public use “without just compensation.” He told the state courts that to determine whether the fee passes constitutional muster, they should apply the test outlined by the Supreme Court in two property rights cases, Nollan v. California Coastal Commission and Dolan v. City of Tigard, Oregon . Those cases, taken together, hold that if a government wants to require someone to give up property in exchange for a land-use permit, it must show that such a condition is closely related and roughly proportional to the effects of the proposed land use. In Sheetz’s case, he argued, they meant that the county was required to make a case-by-case determination that the $24,000 fee was necessary to offset the impact of congestion attributable to his project.

The state courts declined Sheetz’s suggestion. They concluded that the Nollan/Dolan test only applies to fees imposed on an individual basis, rather than fees – like the traffic impact mitigation fee – authorized by legislation.

The Supreme Court on Friday disagreed. In her 11-page opinion for a unanimous court, Barrett explained that nothing in the text of the Constitution indicates that the takings clause does not apply to fees imposed by legislatures. The same is true, she continued, for the history of the takings clause. “In fact,” she wrote, “special deference for legislative takings would have made little sense historically, because legislation was the conventional way that governments exercised their eminent domain power.” Nor, she added, do the Supreme Court’s cases interpreting the takings clause distinguish in any way “between legislation and other official acts.”

Barrett emphasized that the court’s ruling did not resolve some of the other issues raised by Sheetz’s challenge regarding the validity of the fee – “including whether a permit condition imposed on a class of properties must be tailored with the same degree of specificity as a permit condition that targets a particular development.” The state appeals court did not weigh in on this or other unresolved questions, Barrett explained, because it “proceeded from the erroneous premise that legislative permit conditions are categorically exempt from the requirements of Nollan and Dolan .” “Whether the parties’ other arguments are preserved and how they bear on Sheetz’s legal challenge are,” Barrett concluded, “for the state courts to consider in the first instance.”

Three different justices wrote brief concurring opinions in which they weighed in on some of the issues that they raised at the oral argument and some of the questions left unanswered by the court’s ruling. Justice Sonia Sotomayor had in January pointed to other property-related fees that governments often impose and questioned whether the takings clause applies to Sheetz’s case at all. In an opinion joined by Justice Ketanji Brown Jackson, she argued that Nollan and Dolan only apply if the fee would have been a taking of property requiring government compensation if the government had imposed it outside the permitting process. That question, Sotomayor indicated, remains open in Sheetz’s case.

For Gorsuch, the answer to the question “whether the Nollan/Dolan test operates different when an alleged taking affects a ‘class of properties’ rather than a ‘particular development’” was clear: “Nothing about that test depends on whether the government imposes the challenged condition on a large class of properties or a single tract or something in between.”

But in a one-paragraph opinion, Justice Brett Kavanaugh – joined by Jackson and Justice Elena Kagan – wrote separately to stress that the court had “explicitly decline[d] to decide” the question flagged by Gorsuch in his concurring opinion. Therefore, Kavanaugh noted, the court’s ruling in Sheetz’s case “does not address or prohibit the common government practice of imposing permit conditions, such as impact fees, on new developments through reasonable formulas or schedules that assess the impact of classes of development rather than the impact of specific parcels of property.” Moreover, Kavanaugh stressed, “no prior decision of this Court has addressed or prohibited that longstanding practice.”

This article was originally published at Howe on the Court . 

Posted in Featured , Merits Cases

Cases: Sheetz v. County of El Dorado, California

Recommended Citation: Amy Howe, Court rules for property owner in building fee dispute , SCOTUSblog (Apr. 12, 2024, 1:56 PM), https://www.scotusblog.com/2024/04/court-rules-for-property-owner-in-building-fee-dispute/

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The cost of designer handbags has been steadily increasing with goods such as the Chanel Classic Handbag now topping out at more than $10,000. As The  Wall Street Journal  recently observed, “Designers are charging more for their most recognizable bags to maintain the appearance of exclusivity.” 1 As a result, cost-conscious consumers who want a taste of luxury are turning to the second-hand marketplace for more affordable, previously owned gems.

In response, an entire segment of social media influencers has popped up around the resale market 2  with a corresponding surge in trademark cases as luxury brands assert their intellectual property rights against resellers. As a general matter, under the “first sale” doctrine, designer bags can be resold freely, and brands are unable to prohibit such sales.

However, a relevant aspect of reselling is the need to use the original brand’s trademark as a source identifier to refer to the specific item being sold. This practice is known as “nominative fair use,” which is permitted  so long as  there is no likelihood of confusion about the source of the reseller’s products or the mark holder’s sponsorship of, or affiliation with, the reseller.

A recent jury verdict in  Chanel v. What Goes Around Comes Around (WGACA)  serves as a reminder that businesses must routinely assess their practices to ensure they are protected by the first sale and fair use doctrines. In  WGACA , Chanel sued WGACA for trademark infringement and false association, alleging that WGACA sold infringing products and improperly used Chanel’s marks in its advertising. On February 6, 2024, a jury in the Southern District of New York ruled against WGACA and awarded Chanel $4 million in damages. The matter appears destined for appeal. 

Chanel specializes in luxury apparel and leather goods, and owns the trademarks Chanel and CC, as well as Coco Chanel’s publicity rights. WGACA is a retailer that specializes in the sale of second-hand luxury clothing, bags and accessories, and guarantees the authenticity of all products sold on its website. Among the products sold by WGACA were Chanel products, which were not purchased from Chanel, but rather sourced them from individuals and international wholesalers.

Chanel principally objected to WGACA’s advertising practices, such as the use of: 

• Retail displays prominently employing Chanel’s trademarks, including a giant Chanel No. 5 perfume bottle and a Chanel-branded cake
• Direct-to-consumer emails prominently displaying Chanel’s trademarks
• The #WGACAChanel hashtag in social media posts
• WGACA sales ads prominently featuring Chanel items
• Historical images of and quotations from Coco Chanel on WGACA’s website. 

Chanel alleged that this conduct falsely implied an affiliation between Chanel and WGACA. The parties did not dispute that Chanel never had an affiliation with WGACA.

Outcome of the Litigation 

Chanel asserted claims for trademark infringement and false association under the Lanham Act. In response, WGACA argued that the suit was an attempt by Chanel to gain control over the secondary market and foreclose the lawful resale of goods.

To prevail on a Lanham Act claim, a plaintiff must prove a probability of confusion as to the source of the product. However, when an alleged infringer is using another’s trademark to identify the plaintiff’s goods, the  Polaroid  factors 3   (used for assessing the likelihood of confusion) are adapted to include the nominative fair use factors. The application of these factors focuses on the ultimate question of whether consumers are likely to be confused as to the origin of the products. 4

The nominative fair use factors, as applied in the context of this case, were described as follows: 5

• Whether the use of the Chanel marks were necessary to describe Chanel’s products and WGACA’s products, i.e., whether the products were not readily identifiable without use of the marks 
• Whether WGACA used only so much of the Chanel mark as necessary to identify the products 
• Whether WGACA did anything that that would in conjunction with the marks suggest sponsorship or endorsement by Chanel.

In its summary judgment opinion, the court looked closely at the second factor, which requires an analysis as to whether the alleged infringer “stepped over the line” into likelihood of confusion by using the senior user’s mark (here Chanel) too prominently or too often in terms of size, emphasis or repetition. 6  On this issue, WGACA attempted to analogize its case to  Chanel v. The RealReal , another ongoing case brought by Chanel against a retailer in second-hand designer bags .7

But, in  The   RealReal , Chanel did not identify facts suggesting The RealReal displayed Chanel-branded goods more prominently than other luxury brands, or that The RealReal used the Chanel marks in any capacity other than to identify Chanel products as originating with Chanel. For example, as related to website advertising, The RealReal had a “Chanel” page advertising Chanel product and included brand-specific pages for nine other luxury brands.

Further, in  The RealReal , the court noted that The RealReal’s actions did not create an affiliation with Chanel because its website (unlike WGACA’s) expressly disclosed that the brands identified were not involved in the product authentication process and were not affiliated with the reseller. 

In the absence of a similar disclaimer, the court in  Chanel v. WGACA  found that there were issues of material fact and therefore denied summary judgment, leading to the February 2024 jury trial and adverse verdict against WGACA.

Implications

Resellers should be vigilant in examining how extensively they use third-party trademarks, particularly as it relates to advertising. The nominative fair use and the first sale doctrines have not been altered by  WGACA , but the market has been reminded that these defenses are fact-specific and should not be taken for granted. Particularly for businesses in the hot resale market, the use of disclaimers is crucial.

_______________________________________________________________________________

1  https://www.wsj.com/finance/stocks/why-prices-for-the-worlds-most-expensive-handbags-keep-rising-ef49c014  (last accessed April 5, 2024).

2  E.g.,  https://finance.yahoo.com/news/high-paying-side-hustle-thousands-141646378.html?guccounter=1  (last accessed April 5, 2024).

3  Polaroid Corp. v. Polarad Electronics Corp ., 287 F.2d 492 (2d Cir. 1961).

4  Arrow Fastener Co. v. Stanley Works , 59 F.3d 384, 400 (2d Cir. 1995) (quoting  Kelly-Brown v. Winfrey , 717 F.3d 295, 307 (2d Cir. 2013)).

5   Chanel, Inc. v. WGACA, LLC , 18 Civ. 2253, 2022 U.S. Dist. LEXIS 55880, at 16-17 (S.D.N.Y. Mar. 28, 2022) (citing  Int’l Info. Sys. Sec. Certification Consortium Inc. v. Sec. Univ., LLC , 823 F.3d 153, 168 (2d Cir. 2016)).

6   WGACA, LLC , 2022 U.S. Dist. LEXIS 55880, at 24 (citing  Int’l Info. Sys ., 823 F.3d at 168).

7  Chanel, Inc. v. The RealReal, Inc ., 1:2018-cv-10626 (S.D.N.Y.).

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Berkeley Law Student Protests at Dean’s House: How Experts and Advocates Are Reacting

T he University of California at Berkeley has long been known as a hub of social activism, and Erwin Chemerinsky, the dean of its law school since 2017 and a renowned constitutional law expert, has been a staunch proponent of the First Amendment rights of protesters. Earlier this week Chemerinsky, who is Jewish, was the subject of posters depicting a caricature of him that he later said he believed to be “deeply offensive” and “blatant antisemitism” but that he also believed had a right to be displayed as protected speech.

It may then have come as a surprise to Chemerinsky that just days later he would be at the center of the latest flashpoint in a heated ongoing debate about free speech on American college campuses amid tensions over the war in Gaza—with activists accusing him of stifling their expression.

Controversy erupted after video was shared online of Chemerinsky and his wife, law professor Catherine Fisk, confronting a Muslim law student, Malak Afaneh, who disrupted an event on Tuesday in their back yard to make a pro-Palestinian speech. She wanted the school to withdraw investments of its endowment in companies that allegedly support Israel. Chemerinsky was hosting about 60 graduate students for an unrelated dinner when the incident occurred. “Please leave our house,” Chemerinsky angrily pleaded to Afaneh. “You’re guests at our house,” he said. Fisk could be seen touching Afaneh and trying to grab her microphone.

The incident soon went viral from clips spread on social media that collectively garnered over 10 million views across various platforms, including a widely-shared one with a caption that said: “On the last day of Ramadan, UC Berkeley professor assaults a hijabi.”

Catherine Fisk, a professor at Berkeley Law, ASSAULTS a Muslim Hijabi law student, while her husband Erwin Chemerinsky, DEAN of Berkeley Law screams LEAVE OUR HOUSE. In the end, violent white supremacists with fancy degrees. These elite institutions are 🤬 cc: bayareapym pic.twitter.com/leocbbxhWj — saira rao 🍉 (@sairasameerarao) April 10, 2024

In other footage, according to the Los Angeles Times , Fisk could be heard saying, “We agree with you about what’s going on in Palestine.” As Afaneh and several other students were seen leaving the place, one of them asked, “Then what have you done about divestment? Nothing. Nothing”—to which Fisk replied, “We don’t control the investment.”

The controversy that ensued has since drawn sharp reactions from those at the center of the incident, including Chemerinsky and Afaneh, as well as a number of legal experts, advocates, and organizations weighing in on the matter.

Here’s what they’ve had to say.

Erwin Chemerinsky

In a statement published on the Berkeley Law website, Chemerinsky said that he and his wife had been inviting students to their home for dinner since he became a dean. “I never imagined that something that we do to help our community would become ugly and divisive,” he said. “I am enormously sad that we have students who are so rude as to come into my home, in my backyard, and use this social occasion for their political agenda.”

In an interview on CNN , Chemerinsky elaborated on why he thinks he was the target of such a protest, explaining that he has no control over the investments of the University of California and claiming that he’s “said nothing in support of what Netanyahu is doing in Israel … so it’s hard for me to see any reason why they were coming after me other than I was Jewish.”

Chemerinsky has not said whether he would pursue disciplinary action against Afaneh, but he told legal journalist David Lat that, if he does, it would remain confidential.

U.C. Berkeley

University Chancellor Carol Christ, who is leaving the position at the end of June, said in an emailed statement cited by media outlets that she was “appalled and deeply disturbed” by the events at Chemerinsky’s dinner. “While our support for Free Speech is unwavering, we cannot condone using a social occasion at a person’s private residence as a platform for protest,” she said.

Dan Mogulof, a University spokesperson, told NBC that he could not comment on whether legal or disciplinary action would be taken against Afaneh, Chemerinsky, or Fisk.

Malak Afaneh and her supporters

Afaneh, a leader of the group Berkeley Law Students for Justice in Palestine, said in a statement that “Fisk’s assault was a symbol of the deeper Islamophobia, anti-Palestinian racism and religious discrimination that runs rampant within the UC administration.” 

“I was attacked not only for speaking about Palestine but also because I was a Muslim woman who dared to wear a hijab and a keffiyeh and speak in my native tongue of Arabic, equating my identity with something that should be feared and someone who deserved to be silenced,” the statement continued.

“I was not attacked because I was speaking about Palestine,” Afaneh told KQED . “Quite to the contrary, I was attacked because I was simply a Muslim woman wearing a hijab and a keffiyeh in her home.”

Berkeley Law Students for Justice in Palestine supported Afaneh in a statement on Instagram: “As students at UC Berkeley, we unequivocally condemn the use of force against the brave Palestinian, visibly Muslim student who wanted to peacefully speak about Ramadan.”

Other pro-Palestinian groups have also defended Afaneh and criticized what they allege was inappropriate suppression of her rightful advocacy.

The National Students for Justice in Palestine said in a statement on X that it was “unacceptable” for the school to “host an official Ramadan event at the private home of Islamaphobic faculty members.” It added: “Hosting such an event off-campus intentionally muddles the line between the private/public sphere & thus functions to quell student protest.”

And the Berkeley Faculty and Staff for Justice in Palestine group posted on Instagram that it was “united in solidarity with Malak” and condemned “the violent and racist actions” of Chemerinsky and Fisk.

Rights and civic advocacy organizations

Zahra Billoo, executive director of the San Francisco Bay Area office of the Council on American-Islamic Relations (CAIR-SFBA), where Afaneh also works as a clerk, said in a statement that “Students at UC Berkeley have reported being targeted and harassed for their Palestine advocacy for many months now, not just by fellow students but also faculty and administrators.” 

“It is concerning to see [Chemerinsky’s] and Professor Fisk’s violent response to a student speaking out against the Israeli genocide in Palestine,” Billoo said.

Both CAIR-SFBA and Berkeley Law Students for Justice in Palestine have urged the public to send template emails calling for disciplinary proceedings against Fisk and the resignations of both Chemerinsky and Fisk, respectively.

The National Lawyers Guild, a legal advocacy group which Afaneh cited during the incident, also condemned the couple’s actions. “Physical force in response to the exercise of the right to dissent through speech is never acceptable, and is especially outrageous when condoned by a renowned legal scholar and educator,” it said in a statement posted on X. “The NLG expresses full support to this courageous law student who asserted her right to free speech by choosing to speak truth to power at a school-sanctioned event.”

Meanwhile, the American Jewish Committee (AJC) said on X that college campuses have been experiencing for months “disruptive anti-Israel protests” that target students for “abuse and even violence.”

“Now, they’ve targeted UC Berkeley Dean Erwin Chemerinsky in his home,” AJC said. “This is not free speech; it’s an infringement on the freedoms and dignity of Jews, both on and off campus, and it must stop.”

The Foundation for Individual Rights and Expression (FIRE), which advocates for civil liberties especially on college campuses, shared its disapproval of Tuesday’s dinner protest in a post on X : “Peaceful protest on public campuses is protected speech. Disruptive protest and trespassing on private property is not. The First Amendment doesn’t protect seriously disrupting events on public college campuses, much less at someone’s backyard dinner party.”

Legal scholars

The incident has sparked discussions and even some disagreement among legal experts and commentators about whether students had the right to protest on Chemerinsky’s private property on Tuesday—and if he was right to stop them.

Eugene Volokh, a law professor at UCLA and renowned civil liberties scholar, argued that students did not have a constitutional right to protest at Chemerinsky’s home. “When government buildings aren’t opened up for public speech, people don’t have a First Amendment [right] to give speeches there,” he wrote on his legal blog, The Volokh Conspiracy. “And that is likewise true for private homes, even when they have public law school parties hosted there.”

While some have claimed that Fisk and Chemerinsky had the authority to use “ reasonable force ” to eject an unwelcome guest from their home, New York University law professor Rob Howse posted on X that he believed Chemerinsky and Fisk “mishandled the situation.” Noting that not all the details were totally clear, he said: “As legal academics, we need to look at these incidents and ask what kind of response reflects good professionalism in the academy. Escalating to physical confrontation in this scenario does not, in my view.”

Jameel Jaffer, the executive director of the Knight First Amendment Institute at Columbia University, posted on X that “the commandeering of the dinner was bound to backfire, and there’s no serious argument it was protected by the First Amendment.” Jaffer described the entire episode as “very sad,” concluding that it was “a mistake for students to vilify Chemerinsky” and that “there has to be a more constructive way of engaging with him.”

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