RealSpeak: Assignment, Deed

RealSpeak: Assignment, Deed

Posted date: September 11, 2020

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RealSpeak is a series of informative blog posts that aims to broaden the knowledge of its readers – particularly the general public – regarding real estate matters.

ASSIGNMENT, DEED

In real estate, you will often hear the term “Deed of Assignment.” What does it mean, and what are the circumstances for it to arise? Let’s take a look at the legal definition of assignment and deed:

 

Assignment – The transfer of property or right and obligations over it in favor of another (The one who assigns or transfers a property is called ASSIGNOR while those to whom the property is assigned are called ASSIGNS or ASSIGNEES).¹

Deed – A written instrument which, when properly executed and delivered, conveys title.²

 

Basically, a Deed of Assignment is a document that states the transfer of property or rights and obligations from one person to another. The persons may be natural (individual) or legal (e.g. a private or public organization) persons.

 

To illustrate, a good example is when an individual (assignor) – who has bought a condominium unit during preselling period (prior to construction) – decides to sell the property prior to the completion of the building and turnover of the unit. Usually, there is a balance that needs to be paid during turnover. If the balance has not yet been paid and the individual finds a new buyer for the property, the obligation to pay the turnover balance will be transferred (assigned) to the new buyer (assignee). The developer of the condominium – if they allow such a process – will then produce the Deed of Assignment as proof of the transfer of ownership and obligation to pay.

 

You may ask: What’s the reason for selling prior to turnover? The individual bought the property to live in it, right?

 

The great thing about real estate property is you can buy it not just for residence, but also for investment. During preselling period, buyers are given a discount to acquire the properties that have yet to be constructed. During the course of construction, the value of the properties also appreciate. Often, when an individual decides to sell prior to turnover, s/he will be able to sell it at a price where s/he can recover all the costs paid prior to turnover AND earn from the sale as well due to value appreciation. That is one way of how real estate acquisition becomes a form of investment.

 

Interested in trying it out? Don’t hesitate to let us know, as we will assist you in finding the right real estate investment for you! We are accredited with several developers with preselling projects that you may find enticing to invest in!

 

Footnotes:

1 Urban institute of Real Estate and Construction, Comprehensive Notes and Reviewer, Terminology: C-1

2 ibid.

 

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