Assignment Of Contract For Deed Template for England and Wales

In England and Wales, an assignment of contract for deed transfers the benefit of an existing binding contract for the purchase of property (typically an exchanged but uncompleted contract) to a new buyer. The new buyer takes the place of the original buyer and completes the purchase directly with the seller. It is commonly used in new-build and off-plan property transactions.

Only if the original purchase contract does not prohibit assignment. Most standard residential conveyancing contracts (based on the Law Society's Standard Conditions of Sale) contain a clause restricting assignment without the seller's written consent. Always check the contract terms before attempting to assign, as proceeding without consent can give the seller grounds to rescind the contract.

The assignee pays the assignor a premium reflecting any increase in property value between exchange and the date of assignment, plus reimburses the deposit the assignor paid to the seller. SDLT is then calculated on the full purchase price payable to the seller under the original contract plus any premium paid to the assignor, potentially attracting a higher SDLT liability.

You need the original signed sale contract (with seller's consent where required), the assignment deed or written assignment agreement, a financial statement confirming the deposit already paid and any adjustment, written notice to the seller of the assignment, and confirmation of SDLT liability calculations. The seller should also provide an updated completion statement addressed to the new buyer.

The original buyer (assignor) is typically reimbursed for the deposit they paid, either by the assignee directly or by deduction from the premium received. If the deposit was held by a stakeholder solicitor, formal instructions must be given to transfer it. The seller generally does not return the deposit; it is transferred with the rest of the rights under the contract.

The premium the assignor receives from the assignee is a disposal for capital gains tax purposes. HMRC treats it as a disposal of the rights under the contract, not a disposal of the property itself. If the property is not the assignor's principal private residence, CGT is chargeable on the gain between the cost of acquiring the contractual right and the premium received.

The assignee inherits the original contract terms without renegotiation, including the completion date, the agreed price with the seller, and any special conditions. They have no opportunity to include additional protections not in the original contract. They also bear the SDLT on the combined consideration and may face delays if the seller's consent is slow or withheld, making independent legal advice essential.

The assignment of the contract itself does not need to be registered; it takes effect as a transfer of contractual rights. However, the subsequent completion of the purchase must be registered at HM Land Registry in the assignee's name using the appropriate transfer form. The assignee should also carry out the standard pre-completion Land Registry searches to protect their position.