Nominee/Assignee’s Disclosures: A – B Transactions and B – C Transactions
By Janet Moe & Maria Brandenburg | Great American Title
Reminder as to the importance of disclosure.
On occasion, an offer will be written in the buyer's name "and/or nominee" or "and/or assignee." The addition of this term is often unnecessary because contracts for the sale of real property are generally assignable unless provided otherwise in the contract.
Questions have arisen in the past regarding whether there is a practical difference between a "nominee" and an "assignee." Black's Law Dictionary defines an assignee as "a person to whom an assignment is made." An "assignment" is defined as a "transfer or making over to another of the whole of any property . . ." Black defines a "nominee" as "one designated to act for another in his or her place."
The enactment of ARS 44-5101 titled “Wholesale buyers, wholesale sellers: Disclosure: Unlawful Practice”, stipulates that before the parties enter into a binding agreement the wholesale buyer of residential property shall disclose in writing to the seller, among other things, that the buyer is a wholesale buyer.
44-5101. Wholesale buyers; wholesale sellers; disclosure; unlawful practice; definitions
A wholesale buyer of residential real property shall disclose in writing to the seller that the buyer is a wholesale buyer.
A wholesale seller of residential real property shall disclose in writing to the buyer that the seller is a wholesale seller that holds an equitable interest in the real property and that the wholesale seller may not be able to convey title to the property.
Notwithstanding any other provisions contained in the contract for sale, if a wholesale buyer violates this section, the seller may cancel the contract for sale at any time prior to the close of escrow without penalty and may retain any earnest money paid by the wholesale buyer.
Notwithstanding any other provisions contained in the contract for sale, if a wholesale seller violates this section, the buyer may cancel the contract for sale at any time prior to the close of escrow without penalty and shall be refunded all earnest money paid by the buyer.
For the purposes of this section:
1. "Residential real property" means real property with fewer than five dwelling units.
2. "Wholesale buyer" means a person or entity that enters into a purchase contract for residential real property as the buyer and assigns that same contract to another person or entity.
3. "Wholesale seller" means a person or entity that enters into a purchase contract for residential real property as the seller, that does not hold legal title to that real property and that assigns that same contract to another person or entity.
As always, for your Escrow questions or needs, please contact Janet Moe, Branch Manager/Sr. Escrow Officer, Great American Title Agency [email protected]|(602)773-3310
For Marketing, contact Maria Brandenburg, Account Executive/Marketing Rep Great American Title [email protected]|(602)505-6922