Paragraph 7 of Florida's AS-IS Sale and Purchase Contract, the assignability clause, is one of the most misunderstood provisions in the standard form, and one of the most consequential. It determines whether a buyer can transfer their rights and obligations under the contract to someone else, and whether they stay on the hook if they do. Here's what each option actually means, and what sellers should watch for before agreeing to one.
Overview
The Florida Realtors/Florida Bar AS-IS Residential Contract gives buyers three assignability options in Paragraph 7: assign and be released from liability, assign but remain liable, or not assign at all. If none of the three boxes are checked, the current form (FloridaRealtors/FloridaBar-ASIS-7x, Rev. 12/24) defaults to not assignable. Sellers should treat a request for "assign and release from liability" as worth a closer look, since it can be used to flip a contract to another buyer, including one who may not have the ability or intention to close.
The Three Assignability Options
1. Assign and Release from Liability
The buyer can assign the contract to another party and be fully released from further liability under the agreement. This gives buyers flexibility to transfer their interest without remaining responsible if the deal falls apart afterward.
2. Assign but Not Released from Liability
The buyer can assign the contract, but remains liable under its terms even after the assignment. This is common when a buyer wants to bring in another party without fully stepping away from responsibility for the deal's outcome.
3. May Not Assign
The buyer is prohibited from assigning the contract at all and must personally fulfill its terms. If none of the three boxes are selected, this is also the default outcome under the current form.
Why Buyers Want Assignability
Assignability shows up most often in a handful of specific situations:
- Wholesaling: Buyers secure a property under contract, then assign it to another investor for a fee before closing.
- Joint ventures: Buyers bring in a partner with capital or expertise, assigning the contract to formalize the collaboration.
- Changing circumstances: A buyer whose financial situation shifts mid-transaction can use assignability as an exit path rather than defaulting outright.
- Portfolio scaling: Investors negotiate terms on a property, then assign the contract as part of a broader acquisition strategy.
What Sellers Should Watch For
A buyer requesting "assign and release from liability" isn't automatically a red flag, but it deserves scrutiny. This option can be used to flip a contract to another buyer for a fee, and in less straightforward cases, to assign it to a party with little real ability or intention to close. Since the original buyer walks away from all liability once assigned, sellers lose recourse against them if the new party fails to perform. If a buyer requests this option, it's worth asking who the likely assignee is and confirming their capacity to close before you agree to it, ideally with guidance from a real estate attorney.
As-Is Doesn't Mean No Disclosure
One related point worth knowing regardless of the assignability clause: selling "as-is" doesn't eliminate a seller's duty to disclose known material defects that aren't readily observable. Under Florida law (Johnson v. Davis), that disclosure obligation exists independent of the as-is designation. As-is means the seller isn't agreeing to make repairs, not that they can withhold known problems from a buyer.
Frequently Asked Questions
What happens if no assignability box is checked on the contract?
Under the current form (Rev. 12/24), the contract defaults to not assignable if none of the three boxes in Paragraph 7 are selected.
Can a buyer assign the contract without any risk to themselves?
Only under the "assign and release from liability" option. Under "assign but not released from liability," the original buyer remains responsible even after assigning the contract to someone else.
Should sellers be cautious about assignability requests?
Yes, particularly for "assign and release from liability." It can be used legitimately for wholesaling or joint ventures, but it can also be used to transfer the contract to a party unable or unwilling to close, with the original buyer fully released from responsibility.
Does an as-is contract mean the seller doesn't have to disclose problems?
No. Selling as-is means the seller isn't agreeing to make repairs, but Florida law still requires disclosure of known material defects that aren't readily observable, regardless of the as-is designation.
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