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DEED OF ASSIGNMENT: EVERYTHING YOU NEED TO KNOW.

A Deed of Assignment refers to a legal document in which an assignor states his willingness to assign the ownership of his property to the assignee. The Deed of Assignment is required to effect a transfer of property and to show the legal right to possess it. It is always a subject of debate whether Deed of Assignment is a contract; a Deed of Assignment is actually a contract where the owner (the “assignor”) transfers ownership over certain property to another person (the “assignee”) by way of assignment. As a result of the assignment, the assignee steps into the shoes of the assignor and assumes all the rights and obligations pertaining to the property.

In Nigeria, a Deed of Assignment is one of the legal documents that transfer authentic legal ownership in a property. There are several other documents like a deed of gifts, Assent, etc. However, this article focuses on the deed of assignment.

It is the written proof of ownership that stipulates the kind of rights or interests being transferred to the buyer which is a legal interest.

Read Also: DIFFERENCE BETWEEN TRANSFER OF PROPERTY THROUGH WILLS AND DEED OF GIFT

CONTENTS OF A DEED OF ASSIGNMENT

Content of a Deed of Assignment matters a lot to the transaction and special skill is needed for a hitch-free transaction. The contents of a deed of assignment can be divided into 3 namely; the introductory part, the second (usually the operative part), and the concluding part.

• THE INTRODUCTORY PART: This part enumerates the preliminary matters such as the commencement date, parties in the transaction, and recitals. The parties mentioned in the deed must be legal persons which can consist of natural persons and entities with corporate personality, the name, address, and status of the parties must be included. The proper descriptions of the parties are the assignor (seller) and assignee (buyer). The Recitals give the material facts constituting the background to the current transaction in chronological order.
• THE SECOND PART (USUALLY THE OPERATIVE PART): This is the part where the interest or title in the property is actually transferred from the assignor to the assignee. It is more like the engine room of the deed of assignment. The operative part usually starts with testatum and it provides for other important clauses such as the consideration (price) of the property, the accepted receipt by the assignor, the description of the property, and the terms and conditions of the transaction.
• The testimonium : this shows that all the parties are involved in the execution of the deed.
• Execution : this means signing. The capacity of the parties (either individual, corporate bodies, illiterates) is of great essence in the mode of execution.  It is important to note that the type of parties involved determines how they will sign. Example 2 directors or a director/secretary will sign if a company is involved. In the same way, if an association, couple, individual, illiterate, family land (omonile), firm, unregistered association, etc. is involved the format of signature would be different.
• Attestation : this refers to the witnessing of the execution of the deed by witnesses.

For a Deed of Assignment to be effective, it must include a column for the Governor of the state or a representative of the Government where the property is, to sign/consent to the transaction. By virtue of Sec. 22 of the Land Use Act, and Sec. 10 Land Instrument Registration Law, the Governor must consent to the transaction.

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Disclaimer: The above is for information purposes only and should not be construed as legal advice. Ibejulekkilawyer.com (blog) shall not be liable to any person(s) for any damage or liability arising whatsoever following the reliance of the information contained herein. Consult us or your legal practitioner for legal advice.

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In the realm of intellectual property, a Deed of Assignment is a formal legal document used to transfer all rights, title, and interest in intellectual property from the assignor (original owner) to the assignee (new owner). This is crucial for the correct transfer of patents, copyrights, trademarks, and other IP rights. The deed typically requires specific legal formalities, sometimes notarization, to ensure it is legally enforceable.

To be legally effective a deed of assignment must contain:

• Title of the Document : It should clearly be labeled as a "Deed of Assignment" to identify the nature of the document.
• Date : The date on which the deed is executed should be clearly mentioned.
• Parties Involved : Full names and addresses of both the assignor (the party transferring the rights) and the assignee (the party receiving the rights). This identifies the parties to the agreement.
• Recitals : This section provides the background of the transaction. It typically includes details about the ownership of the assignor and the intention behind the assignment.
• Definition and Interpretation : Any terms used within the deed that have specific meanings should be clearly defined in this section.
• Description of the Property or Rights : A detailed description of the property or rights being assigned. For intellectual property, this would include details like patent numbers, trademark registrations , or descriptions of the copyrighted material.
• Terms of Assignment : This should include the extent of the rights being transferred, any conditions or limitations on the assignment, and any obligations the assignor or assignee must fulfill as part of the agreement.
• Warranties and Representations : The assignor typically makes certain warranties regarding their ownership of the property and the absence of encumbrances or third-party claims against it.
• Governing Law : The deed should specify which jurisdiction's laws govern the interpretation and enforcement of the agreement.
• Execution and Witnesses : The deed must be signed by both parties, and depending on jurisdictional requirements, it may also need to be witnessed and possibly notarized.
• Schedules or Annexures : If there are detailed lists or descriptions (like a list of patent numbers or property descriptions), these are often attached as schedules to the main body of the deed.

Letter of Assignment (for Trademarks and Patents)

This is a less formal document compared to the Deed of Assignment and is often used to record the assignment of rights or licensing of intellectual property on a temporary or limited basis. While it can outline the terms of the assignment, it may not be sufficient for the full transfer of legal title of IP rights. It's more commonly used in situations like assigning the rights to use a copyrighted work or a trademark license.

For example, company X allows company Y to use their trademark for specific products in a specific country for a specific period.  

At the same time, company X can use a Letter of Assignment to transfer a trademark to someone. In this case, it will be similar to the Deed of Assignment. 

Intellectual Property Sales Agreement

An IP Sales Agreement is a detailed contract that stipulates the terms and conditions of the sale of intellectual property. It covers aspects such as the specific rights being sold, payment terms, warranties regarding the ownership and validity of the IP, and any limitations or conditions on the use of the IP. This document is essential in transactions involving the sale of IP assets.

However, clients usually prefer to keep this document confidential and prepare special deeds of assignment or letter of assignment for different countries.

IP Transfer Declaration

In the context of intellectual property, a Declaration is often used to assert ownership or the originality of an IP asset. For example, inventors may use declarations in patent applications to declare their invention is original, or authors may use it to assert copyright ownership. It's a formal statement, sometimes required by IP offices or courts.

When assigning a trademark, the Declaration can be a valid document to function as a proof of the transfer. For example, a director of company X declares that the company had sold its Intellectual Property to company Y. 

Merger Document

When companies or entities with significant IP assets merge, an IP Merger Document is used. This document outlines how the intellectual property owned by the merging entities will be combined or managed. It includes details about the transfer, integration, or handling of patents, copyrights, trademarks, and any other intellectual property affected by the merger.

In all these cases, the precise drafting of documents is critical to ensure that IP rights are adequately protected and transferred. Legal advice is often necessary to navigate the complexities of intellectual property laws.

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Understanding a deed of assignment for intellectual property

A deed of transfer is used to change the ownership of intellectual property, a common occurrence in business. Explore how and when to use one.

Find out more about intellectual property basics

by   Brette Sember, J.D.

Brette is a former attorney and has been a writer and editor for more than 25 years. She is the author of more than 4...

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Updated on: November 24, 2023 · 3min read

Understanding intellectual property in business

How to transfer intellectual property rights in business, what to include in a deed of assignment, registering new ownership, restrictions on intellectual property transfers.

Most companies have intellectual property as part of their assets, including software, product design, or copyright to white papers. Buying or selling such property is done using a document called a deed of assignment.

A large part of what a business consists of may be tied to intellectual property . It's easy to see physical property a company owns, such as a building, office furniture, or inventory, but intellectual property can be more challenging to identify.

Most businesses have intellectual property, or works created by human minds or, in some cases, by computers. Some examples of intellectual property include architectural drawings, ad campaigns, company or product names, inventions, and source code.

Examples of when transfers of intellectual property might happen include when a company is buying another company, when you are setting up an LLC and want to transfer your intellectual property into the company, or when a business buys product rights from another company or individual.

A deed of assignment can be done in one transaction, instead of one transaction for each item of intellectual property, by transferring all ownership rights of all intellectual property detailed in the deed. The document is signed by both the buyer and seller. No payment is required for it to be valid.

A deed of assignment must be in writing and should include:

• The names and addresses of the assignor and assignee
• A description of the program or product for which the rights are being transferred
• A statement that all intellectual property rights to the property are being transferred
• Signatures of the parties and the date of the agreement execution

The deed could also include the following sections, where applicable:

• Consideration, or payment, to be made to the original owner.
• Warranties, or promises that the intellectual property rights being assigned don't infringe on anyone else's intellectual property rights . For example, in a deed regarding the transfer of a copyright, this section could state that the copyrighted work is original and not owned by someone else.
• Indemnification, or promise by the seller to reimburse the assignee if there is some problem with title to the property.
• Future assignments. For example, the agreement could be ongoing, so that anything the assignor creates in the future for this product or program is also transferred to the buyer.

Although a deed of assignment transfers ownership in intellectual property , it does not change the registration of the ownership. The assignee is responsible for handling all registration requirements.

For example, if a patent is transferred via a deed of assignment, the new owner must record the change in ownership with the U.S. Patent and Trademark Office. Similarly, the transfer of a copyright is recorded with the U.S. Copyright Office.

Transfers of intellectual property must comply with U.S. laws. One obvious caveat is that you can't transfer property you don't own. Transfers must also comply with antitrust laws, which are set up to prevent one company from completely dominating an industry.

If intellectual property rights are being transferred overseas, the transfer must comply with Export Administration Regulations and the International Traffic in Arms Regulations , which are designed to protect national security and trade.

The deed of assignment can be a crucial part of a business deal or transaction. You can create a deed of assignment yourself, or you can work with an attorney .

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Assignment of Deed

Table of contents, assignment of deed of trust.

An assignment of deed is used to show the deed of a property changing from one party to another, such as when a sale is made. It is used as the written proof to show who has rightful ownership of the property. When someone is purchasing property and decides to sell it before they have paid it off, an assignment of deed form would be used to transfer the rights and everything associated with the property over to the new owner.

When a debtor transfers real estate to a creditor, the  Assignment of Deed  is the legal document used to record this transfer. This happens when a lawsuit is filed on a property owner for a default in payment and the court’s rule in favor of the creditor; this is one example of when the deed of assignment would be put in to use. It’s used to show that the property is being transferred from the ownership of the defendant and given to the plaintiff that won the case and awarded the property.

It’s important to understand what these documents mean as they pertain to public property records as well as  personal background checks  into an individual. This could be exactly the type of information you need to help you gain a better understanding on someone or his or her history. It could also be in your own public background information if someone knows where to look for it.

Public records will always contain the history of who owns real property and the details on that property as it exchanges hands or ownership is passed. Anyone who knows how can access basic information about a deed or its assignments.

When a property owner uses an assignment of deed of trust, they are assigning ownership of the property to someone else and this is a very important document that should be kept in a safe and secure place. There are also public records kept on these types of documents and you should be able to request a copy – sometimes at a fee – should you need one.

The  Assignment of Deed  will also specify the rights the other person will receive along with the deed. As property transfers ownership like this, a recital is usually included as well which shows how many people and the identities of who has owned the property before. This allows you to see how many times the property has transferred hands over the course of its history.

Now that you know more about this particular property document, you will understand it when you use it. Whether you need it for your property or you are searching the  property records  of someone else for some reason, this information will be very beneficial to you.

We know that these types of legal matters can be confusing to the average person and that’s why we strive to make it easier to understand by giving you the basics here. Assignment of deed of trust documents do not have to confuse you anymore.

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What is a Deed of Assignment?

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Table of Content

Who Signs the Deed of Assignment?

What is the difference between transfer and assignment, conclusion: what is a deed of assignment, and how is it useful in real life.

Did you just Google what is a deed of assignment is? Fresher law students and students pursuing a program that has no connection to any legal jargon might mistake it for an action that one deliberately performs to achieve nirvana. Yes, it is 'indeed' an action performed intentionally by a person but made legal. To be precise, it is a document of transferring property ownership. Read forth to learn more about it.

A deed is a signed legal document containing all the legal statutes, laws, and agreement clauses for transferring a property or financial assets from previous owners to a new one. Such a document is required to transfer property, tenancies, mortgages, wills, power of attorney, and a partnership agreement.

Did you know that Australia's different states and territories have distinct legislation that entails specific requirements? To execute a deed in Australia, you need to heed the state laws.

For example, suppose a person is selling their property. In that case, the new buyers and the previous owners will sign a deed that contains a detailed list of assets, liabilities and legal monetary exchange. Both parties sign a deed agreeing to the clauses of ownership transfer, and the previous owner holds no.

Let's move on to the processes in such an agreement process. The deed has to be executed before the concerned parties can sign it; it is a legal process under which both parties discuss and agree/disagree to the clauses and conditions in the agreement and formally accept the final document. When a party formally accepts a document, they have bound the terms of the document.

A deed is considered a valid legal document only when registered under the local court law; the deed has to be notarized and delivered to the new owner. The process of signing a deed is the most important, and both parties have to be present while signing, or a pre-informed stand-in can be there.

There are over 10.6 million residences in Australia, total cost estimated at 1.8 trillion Australian dollars. - Australian Bureau of Statistics

In most cases, the original/previous owner signs the deed to transfer ownership. But in a partnership agreement or a mortgage transfer, both parties must sign the deed of agreement. A physical handwritten signature is required, and an e-generated signature is not valid.

Often, a nominee witnesses the exchange of signatures as part of the legal formalities. Generally, the nominees are not required to sign the deed, but it majorly depends on the legal requirement of the state/country. The nominee signing the document must not be related to either of the parties. A family member, an employee or the representative attorney cannot sign the deed.

Lastly, a real-estate deed takes effect when the deed is delivered to the new owner a physical or a constructive delivery, i.e. handing over the house keys or assets. Constructive delivery is not official or legal transfer, but concerned parties often do it by mutual agreement.

Learn how to acknowledge any source of information using the APA 7th style .

Delivering a deed through electronic mediums is also a feasible option, but both parties must hand over a physical copy of the signed document to the coordinator. The legal coordinator monitors the exchange and helps in legal registration and notarisation.

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In the previous two sections, we discussed 'what is a deed of assignment?' and the process of signing, executing and delivering a deed. But, let me elaborate on the differences between transferring and assignment of the deed. Both these might be synonyms, yet in legal terminology, assignment means a complete transfer of property or asset ownership from one person to another. In contrast, transfer means appointing an asset or property to another person to control while the ownership belongs to the original owner.

A deed of agreement is the modernized version of a charter, which helps ownership and transfer rights used in ancient Europe.

A deed of assignment and a memorandum of transfer are two distinct documents for respective purposes. Land ownership can be assigned to a new owner through a deed, and a transfer of assets is done through signing a memorandum of transfer. Meanwhile, a licence is a legal document that doesn't permit infringement; the legal governing bodies decide if the assignment can be revoked or if a transfer is possible.

For example, a business or an insurance policy is transferred to a person when the original owner is unavailable to fulfil their duties due to ailment or sudden demise. The original owner assigns the business assets, or insurance policy returns to a new owner through their will (often after the demise) or legal transfer.

Legal transfers and assignments are among the most common and extensively exchanged legal transactions. People buy/sell properties every day, and businesses seeking to expand sign legal partnership agreements frequently. It is a very basic yet detailed legal document that many students learn about at high school and later develop their knowledge through university academia.

The most common legal implication of a deed you will ever witness is the legal battle for a property that occurs generally. Many of you must've witnessed it, or one might be currently in action within your extended family. When the property owner passes away without defining a will, then the next generation successors of a business or the potential owners of the property can challenge each other in court.

A deed of partnership is a legal agreement between two business partners when establishing a legal business partnership. It states the shared assets and liabilities, profit/loss ratio and the revenue shares to be distributed among both partners. A business deed of agreement is often signed by two collaborating businesses or when a bigger organization takes over a smaller business.

The exchange process dates back to 6000 BC in the Mesopotamian tribes, known as the barter system.

Lastly, the transfer of insurance policy also requires a deed of agreement; it is signed by the assignor (original policyholder) who wants to share the profits of an insurance policy with an assignee (family member or the new policyholder). Such agreements occur due to the sudden demise of the assignor or some specific conditions.

There are other implications of a deed of agreement, and often it is an oral agreement between two parties that they can legalize in the future. The exchange of assets has been in practice since the barter currency system. The ancient humans had fewer resources, so the chances of getting your money swindled were less, but technological advancement has resulted in various ways of getting conned. A legal document is required to legalize an agreement of assignment under the state court and secure both parties' legal rights.

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Drafting a Deed of Assignment

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Note: Want to skip the guide and go straight to the free templates? No problem - scroll to the bottom. Also note: This is not legal advice.

Introduction

A Deed of Assignment is a vital legal document used to transfer rights, interests or assets between parties. It is regularly used in business transactions, and often regarding real estate or intellectual property. A well-crafted deed of assignment can protect both sides from potential legal disputes, ensuring that everyone involved understands their obligations and responsibilities.

The Genie AI team has seen many instances where having a valid deed of assignment can make all the difference - without it businesses could be exposed to considerable risk. That’s why we offer free templates and step-by-step guides to help those wishing to draft their own deed.

When creating a Deed of Assignment it is important to take the specific circumstances into account - any changes or additions should be accurately documented and agreed by all involved parties beforehand. Furthermore, it is essential that the terms are clearly written out in an unambiguous way so every party knows exactly what they have signed up for. Beyond protecting both sides’ interests, this type of agreement can also be used for copyright assignments, leases, debt transfers and trusts.

Before signing on the dotted line it’s also critical that executing such documentation is done properly - all parties must sign in the presence of a witness who will also affix their signature and date the document accordingly. Once this process has been completed filings must then be made with any relevant government authorities whenever necessary (especially in cases involving real estate or intellectual property transfers).

In summary, drafting a Deed of Assignment not only safeguards everyone’s best interests but also provides additional benefits depending on its use case - reading through our step-by-step guidance below should provide you with more information on how to access our template library today and start benefitting from its advantages without needing to sign up for an account with Genie AI first!

Definitions (feel free to skip)

Legal Binding: When a legally binding document is used, it means that all parties involved are legally obligated to follow the terms and conditions set forth in the document.

Assignor: The assignor is the person who is transferring rights, interests or assets to someone else.

Assignee: The assignee is the person who is receiving the rights, interests or assets from the assignor.

Witness: A witness is an independent third-party who is present when a document is signed, in order to ensure that the process is completed in a secure and legally binding manner.

Stamp: A stamp is an official seal or mark that is used to verify and authenticate a document.

Tax: A tax is a sum of money that is paid to a government or public authority.

Duty: Duty is an obligation or responsibility assigned to someone.

Defining the Deed of Assignment

What is a deed of assignment and what is its purpose, parties involved, who needs to be involved in the making of a deed of assignment, drafting the deed, determine what kind of deed of assignment needs to be drafted, consider the subject matter to be assigned in the deed, research the legal requirements for the kind of deed to be drafted, draft the deed of assignment in accordance with the legal requirements, executing the deed, check that the parties to the deed are correctly identified, confirm that the deed is correctly signed and dated by all parties, confirm that the deed is witnessed by an independent third party, have the deed of assignment properly executed by all parties, registration, determine whether the deed of assignment needs to be registered, if registration is necessary, confirm the registration procedures, take necessary steps to register the deed of assignment, considerations, consider any applicable tax or stamp duty implications of the deed of assignment, consider any restrictions or limitations on the rights being assigned, consider whether the deed of assignment needs to be registered in any public records, common mistakes, not accurately identifying all of the parties to the deed, not having the deed properly executed by all parties, not having the deed witnessed by an independent third party, not considering any applicable tax or stamp duty implications, not considering any applicable restrictions or limitations on the rights being assigned, record keeping, ensure that the original deed of assignment is securely stored, create a digital copy of the deed and store it in a secure manner, review the deed of assignment to ensure accuracy, confirm that all steps have been completed correctly, seek advice from legal professionals if necessary, get started.

• Establish the parties involved in the Deed of Assignment
• Identify the property or service being assigned
• Specify the terms of the assignment
• Ensure the Deed of Assignment is properly witnessed
• Check that all signatures are valid

When you have completed the steps above, you will have successfully defined the Deed of Assignment and can proceed to the next step.

• A deed of assignment is a legal document that is used to transfer the rights and responsibilities of one party (the assignor) to another party (the assignee)
• It is used to transfer contractual rights and obligations between parties
• It should include information such as the names of the parties, the date of the assignment, and the description of the rights transferred
• You will know that you have completed this step when you have an understanding of what a deed of assignment is and why it is used.
• Identify the party transferring their rights (the assignor) and the party receiving the rights (the assignee)
• Draft the deed in the name of both parties, including full names and contact details
• Ensure the deed is signed by both the assignor and assignee
• Once the deed is signed, the parties should exchange copies of the document

Once the assignor and assignee have been identified and the deed has been drafted and signed, you can check this step off your list and move on to the next step.

• Identify the parties involved in the Deed of Assignment. This would typically include the assignor (the party transferring their rights or interest) and the assignee (the party receiving the rights or interest).
• Ensure that all parties involved have the legal capacity to enter into a contract.
• When all parties have been identified and their legal capacity has been verified, you can check this step off your list and move on to drafting the Deed.
• Read the applicable laws in your jurisdiction to determine the required language and structure of the Deed of Assignment
• Gather the necessary information on the parties, the asset being assigned, and other relevant details
• Draft the Deed of Assignment, taking into account all the necessary details
• Make sure the language is clear and unambiguous
• Have the Deed of Assignment reviewed by a legal professional
• When the Deed of Assignment has been drafted and reviewed, you can move on to the next step.
• Identify the type of assignment that needs to be drafted and the legal requirements that need to be satisfied
• Consider the purpose of the Deed and the rights and obligations of the parties to the Deed
• Determine if the Deed is for an absolute or conditional assignment
• Consider if the Deed should be an express or implied assignment
• Determine if the Deed needs to be in writing or if it can be oral
• Check the applicable laws in your jurisdiction to ensure that you are drafting a valid Deed
• Check if there are any additional requirements that need to be included in the Deed

When you can check this off your list: Once you have identified the type of assignment and the relevant legal requirements, you can move on to considering the subject matter to be assigned in the Deed.

• Identify the subject matter of the Deed of Assignment, such as a patent, trademark, copyright, or other intellectual property
• Assess the value of the subject matter and any associated liabilities
• Understand the relationship between the assignor and assignee
• Have all necessary documents, such as a purchase agreement, to provide more detail about the assignment

Once you have identified the subject matter of the Deed of Assignment, assessed its value, understand the relationship between the assignor and assignee, and gathered any additional documents, you can move onto the next step of researching the legal requirements for the kind of Deed to be drafted.

• Research the relevant legislation, case law, and other materials related to the Deed of Assignment to be drafted
• Consult with a lawyer familiar with the relevant law to understand the requirements
• Take detailed notes on the legal requirements that must be adhered to in the Deed of Assignment
• Once you have all the necessary information, double-check that you understand the requirements before moving on to the next step.
• Prepare the text of the Deed, ensuring that all relevant information regarding the parties, the subject matter, and the consideration is included
• Check to make sure the language conforms with relevant laws and regulations
• Have the Deed reviewed by a solicitor to ensure that it complies with all legal requirements
• Once the Deed has been approved by a solicitor, have the parties sign the document
• Once the Deed has been signed by both parties, make multiple copies and ensure each party has a copy
• This step is complete once the Deed has been signed and each party has a copy of the document.
• Ensure both parties sign the Deed of Assignment in the presence of two witnesses who are over the age of 18 and not parties to the Deed
• Have both parties sign the deed in the presence of two witnesses and have the witnesses sign the deed to attest to witnessing the signature of the parties
• Check that the parties have signed the Deed in the presence of the witnesses by noting the signatures and the dates of signature in the execution clause of the Deed
• Once the Deed has been executed, have the parties date and keep a copy of the Deed in a secure place
• You will know that you have completed this step when the Deed has been properly executed by the parties in the presence of two witnesses.
• Identify all parties to the Deed and verify that their details are correct.
• Ensure that all parties to the Deed are identified in the document and that the details of each party are accurate and up-to-date.
• Check that the names, addresses and contact details of each party are correct.
• Once you have verified that the parties and their details are correctly identified, you can move on to the next step.
• Check that all parties have signed the Deed in the correct place, and that the date of signature is correct
• Ensure that each party has signed the Deed in the presence of an independent witness
• Check that all parties have signed the Deed with their full name and title, if applicable
• Confirm that the date of signature is correct and that all parties have signed on the same date
• Once you have verified that all parties have correctly signed and dated the Deed, you can proceed to the next step.
• Ensure that the Deed is witnessed by an independent third party who is not a party to the Deed.
• Ask the third party to sign the Deed and provide their name, address, occupation and date of signing.
• Check that the third party has signed and dated the Deed.
• Once the above is complete, you can check this step off your list and move on to the next step.
• Obtain signatures from all parties on the deed of assignment, ensuring that each party signs in the presence of a witness
• Have an independent third party witness each party’s signature
• Ensure that all parties have a valid form of identification, such as a driver’s license or passport, available for inspection by the witness
• Ensure that all parties sign the deed of assignment in the presence of the witness
• Obtain the witness’ signature, confirming that all parties signed in the presence of the witness
• You will know this step is completed once all parties have signed the deed of assignment and the witness has signed confirming they were present during the signing.
• Obtain a copy of the executed Deed of Assignment from all parties
• Contact the relevant state or territory office to determine whether the Deed of Assignment needs to be registered
• If registration is required, complete the necessary forms, pay the registration fee, and submit the required documents
• Once the Deed of Assignment is registered, the registrar will issue a certificate of registration
• Check off this step when you have received and reviewed the certificate of registration.
• Research the applicable laws and regulations in the relevant jurisdiction to decide if the Deed of Assignment needs to be registered
• Consult a legal professional if unsure
• When you have the answer, you can move on to the next step.
• Confirm what type of Deed of Assignment requires registration with the relevant government agency or registry.
• Research the registration procedures and the requirements you must meet in order to register the Deed of Assignment.
• Obtain any fees or additional documents that are necessary to complete the registration process.
• Ensure that all parties to the Deed of Assignment understand the registration process and the requirements for completing it.

You can check off this step once you have researched and confirmed the registration procedures for the Deed of Assignment.

• Gather the necessary documents for registration, such as the Deed of Assignment, supporting documents, and the applicable fee
• Visit the registration office to register the Deed of Assignment
• Submit the necessary documents to the registration office
• Pay the applicable fee
• Obtain a copy of the registered Deed of Assignment
• Upon completion of the above steps, you can check this off your list and move on to the next step.
• Review and understand the nature of the rights and obligations being assigned
• Determine if there are any restrictions or limitations in the assignment
• Assess if any approvals are needed from third parties before the assignment is valid
• Confirm that the assignor has the right to assign the interest being transferred
• Check to see if the assignee has the necessary capacity to accept the assignment
• Analyze if the assignment is subject to any applicable laws or regulations
• Determine if any additional documentation is needed to support the assignment
• Once you have considered all of the above, you can proceed with drafting the Deed of Assignment.
• Check with your local taxation authority or a qualified tax professional to see if the Deed of Assignment is subject to any taxes or stamp duty.
• Ensure that the Deed of Assignment includes any required taxes or stamp duty payments.
• Check to see if the tax or stamp duty implications vary by jurisdiction.
• Once you’ve considered the tax or stamp duty implications, you can move on to the next step.
• Identify any restrictions or limitations that could affect the transfer of rights in the Deed of Assignment
• Consider whether there are any legal restrictions that must be observed in the transfer of the rights being assigned
• Research any relevant industry standards or regulations to ensure that the restrictions or limitations on the rights being assigned are compliant
• Ensure that the Deed of Assignment clearly outlines the restrictions or limitations of the rights being assigned
• When all restrictions or limitations on the rights being assigned are taken into consideration, checked for compliance and outlined in the Deed of Assignment, this step is complete.
• Consider whether the Deed of Assignment needs to be registered with any government or public agencies.
• Determine if any registration is required or optional.
• Research the relevant regulations and laws to ensure that the assignments are properly recorded.
• Check any local requirements or restrictions.
• Once you have determined that the Deed of Assignment does or does not need to be registered, you can move on to the next step in the process.

• Read over the Deed of Assignment twice to make sure you’re accurately identifying all of the parties to the Deed. Make sure you include the full names and addresses of the assignor and assignee, as well as any other relevant parties. • Check that the legal description of the subject property is accurate. • Ensure that the consideration (the amount being exchanged for the assignment) is stated clearly and accurately. • Make sure that the names of the initial parties to the Deed are also included in the recitals. • Ensure that the recitals and the express terms of the Deed are consistent with one another. • Make sure that the Deed is signed, notarized, and delivered in accordance with state law.

Once you’ve completed the above steps, you can check off this task and move on to the next step in the guide.

• Identify the assignor and assignee. The assignor is the party transferring their rights and the assignee is the party receiving the rights.
• Check all of the details are correct. This includes the names, addresses and other contact information for both parties.
• Draft the deed to ensure that the assignor and assignee are accurately identified.
• You can check this off your list and move on to the next step once you have confirmed that the assignor and assignee have been accurately identified in the deed.
• Ensure that all parties to the Deed have read, understood and agreed to the terms and conditions of the agreement.
• Have all parties affix their signature to the Deed and the accompanying documents.
• Check that all the signatures are dated and in the presence of a witness.
• When all parties have properly executed the Deed, you can move on to the next step.
• Ensure all parties have signed the Deed in the presence of a witness.
• The witness must be an independent third party who is not a party to the Deed.
• The witness must sign each page of the Deed that contains a party’s signature.
• The witness must also include their full name, address and occupation on the Deed.
• Once all of the above requirements are met, then you can check this off your list and move on to the next step.
• Determine the applicable taxes or stamp duty implications for the Deed of Assignment.
• Research any applicable taxes or stamp duty fees for the Deed of Assignment.
• Calculate the applicable taxes or stamp duty fees for the Deed of Assignment.
• Make sure to include the applicable taxes or stamp duty fees in the Deed of Assignment.

Once you have determined the applicable taxes or stamp duty implications for the Deed of Assignment, and included them in the Deed of Assignment, you can move on to the next step.

• Determine the rights that you are assigning and review any applicable laws or regulations to ensure that the assignment of such rights is permitted.
• Consider any applicable contractual restrictions or limitations on the rights being assigned, such as any applicable confidentiality obligations or restrictions on the transfer of rights.
• Once you have determined that the assignment of the rights is permitted and there are no applicable restrictions or limitations, you can proceed to the next step of recording keeping.
• Create a record of the Deed of Assignment, including the date it was executed, by each party
• Maintain a copy of the Deed of Assignment in a secure place
• Record any additional related documents, such as any security documents, release documents, or other agreements
• When all of the above have been done, you can check this off your list and move on to the next step.
• Obtain a physical copy of the original Deed of Assignment
• Ensure the original Deed is signed by both parties
• Keep the original Deed in a safe and secure place, such as a locked filing cabinet or safe
• Make sure the document is stored in a location that is accessible to both parties
• Ensure that the original Deed is not destroyed or tampered with in any way

You can check this off your list and move on to the next step once the original Deed of Assignment is safely stored in a secure location.

• Scan or take a digital photo of the original Deed of Assignment and save it to a secure location.
• Ensure that the digital copy is readable and clearly displays all of the information contained in the original document.
• Ensure that the digital copy is stored in a secure location, preferably on a cloud-based storage system or other secure server.
• Make sure that only authorized personnel have access to the digital copy of the Deed.
• When finished, you will have created a digital copy of the Deed and stored it in a secure manner.
• Read over the Deed of Assignment to ensure accuracy
• Make sure all details are correct, and all parties are named
• Verify that all signatures are complete and accurate
• Make sure the date of the assignment is correct
• Check that the document is formatted and laid out correctly
• Once you are satisfied with the accuracy of the Deed of Assignment, you can move on to the next step.
• Read through the entire document to make sure all the information is correct
• Double check that the names and details of the parties involved are spelled correctly
• Ensure that all the dates are accurate, and that any and all parties have signed the deed in the right places
• Check that the terms and conditions in the deed are consistent with the agreement between the parties
• When you have verified all the details, you can check this off your list and move on to the next step.
• Check the Deed of Assignment to ensure that all required elements are present, including accurate information and signatures of all parties.
• Verify that any and all attachments to the Deed of Assignment are included and accurate.
• Ensure that all dates, signatures, and other pieces of information are accurate and up-to-date.
• Once you’ve confirmed that all of the steps have been completed correctly, you can move on to the next step.
• Seek professional advice from a lawyer or other legal professional to ensure that the deed of assignment is legally binding and enforceable.
• Request that the legal professional checks that all steps have been completed correctly, and that the deed of assignment meets all requirements under local law.
• Ask the legal professional to provide you with written advice on any changes or revisions that may be necessary to make the deed of assignment valid and enforceable.
• Once the legal professional has confirmed that the deed is legally sound, you can check off this step and proceed with the next one.
• Research legal professionals who are able to provide advice and assistance with the drafting of a deed of assignment
• Contact the legal professionals to discuss the specific requirements and details of the deed of assignment
• Ask the legal professionals if they are able to provide advice and assistance with the deed of assignment
• Receive advice from the legal professionals and make changes to the deed of assignment accordingly
• Once you are satisfied with the changes to the deed of assignment, you can move on to the next step.

Q: Does a Deed of Assignment need to be signed?

Asked by John on April 23rd 2022. A: Yes, a Deed of Assignment needs to be signed by both the assignor and the assignee in order for it to be legally binding. The signatures should be witnessed and dated, and should be in front of an independent witness who is not related to either party. It is also important to include the relevant clauses and provisions in the deed, as these will set out the rights and obligations of each party.

Q: What is the difference between an assignment and a novation?

Asked by Sarah on July 29th 2022. A: An assignment is a transfer of rights or obligations from one party to another, while a novation is a transfer of rights or obligations from one party to another with the consent of all parties involved. An assignment does not necessarily require the consent of all parties, while a novation always requires the consent of all parties. Additionally, an assignment can transfer rights or obligations without necessarily extinguishing any pre-existing agreements, while a novation extinguishes any pre-existing agreements.

Q: Is a Deed of Assignment legally binding in different jurisdictions?

Asked by Tyler on October 17th 2022. A: Yes, a Deed of Assignment can be legally binding in different jurisdictions, though the exact requirements for validity may differ from jurisdiction to jurisdiction. In general, however, a Deed of Assignment needs to be signed by both parties and witnessed by an independent third party in order for it to be legally binding. Additionally, the deed should include all relevant clauses and provisions that are applicable in each jurisdiction.

Q: Are there any tax implications when drafting a Deed of Assignment?

Asked by Emma on January 15th 2022. A: Yes, there are tax implications that need to be taken into account when drafting a Deed of Assignment. Depending on the jurisdiction and specific tax laws, there may be tax implications for both parties if they are transferring rights or obligations under the deed. It is important to seek professional tax advice before entering into any agreement that involves transferring rights or obligations between parties as this could have significant financial implications for all involved.

Q: Do I need legal advice when drafting a Deed of Assignment?

Asked by Jacob on June 5th 2022. A: While it is not necessary to seek legal advice when drafting a Deed of Assignment, it is generally recommended in order to ensure that all relevant legal requirements are satisfied and that all involved parties are aware of their rights and obligations under the deed. It is also important to make sure that all language used in the deed is clear and unambiguous so that it can easily be understood by all parties involved.

Q: How can I ensure that my Deed of Assignment is valid?

Asked by Michael on August 28th 2022. A: In order for your Deed of Assignment to be valid, it must meet certain legal requirements which vary between jurisdictions. Generally speaking, your deed should include all relevant clauses and provisions applicable in your jurisdiction as well as signatures from both parties which should be witnessed by an independent third party who is not related to either party involved. Additionally, any language used within the document should be clear and unambiguous so that it can easily be understood by all involved parties.

Q: What information do I need to provide when drafting a Deed of Assignment?

Asked by Ashley on November 10th 2022. A: When drafting a Deed of Assignment, you will need to provide information about both parties involved such as their names, addresses, contact details and any other relevant information required under applicable laws in your jurisdiction. Additionally, you will need to include any relevant clauses or provisions applicable in your jurisdiction which will set out the rights and obligations of each party under the deed as well as any other information required for the document to be legally binding.

Q: What are common mistakes made when drafting a Deed of Assignment?

Asked by Joshua on February 20th 2022. A: One common mistake made when drafting a Deed of Assignment is failing to include all relevant clauses or provisions applicable in your jurisdiction which set out the rights and obligations of each party involved in the agreement. Additionally, failing to have the document signed by both parties or witnessed by an independent third party can render the document invalid or unenforceable under applicable law in some jurisdictions. Moreover, using ambiguous language within the document can also lead to misunderstandings and disputes further down the line which could be avoided if clear language was used throughout the document instead.

Example dispute

Lawsuit referencing a deed of assignment.

• The plaintiff may raise a lawsuit if they have been wronged by the defendant in a way that is outlined in the deed of assignment.
• For example, the deed of assignment may outline that the defendant is responsible for paying a certain amount of money to the plaintiff, and the defendant has failed to do so.
• The plaintiff may also raise a lawsuit if the defendant has failed to adhere to any other obligations laid out in the deed of assignment.
• The plaintiff would need to prove that the defendant has breached the deed of assignment in order to win the lawsuit.
• If successful, the plaintiff may be able to obtain a judgment in their favor, which may require the defendant to pay the plaintiff the money they are owed.
• In addition, the plaintiff may be able to seek other damages, such as punitive damages, if the breach of the deed of assignment was particularly egregious.
• Depending on the severity of the breach, the plaintiff may also be able to seek an injunction to prevent the defendant from continuing to breach the deed of assignment.
• Settlement of the dispute may also be possible, wherein the defendant agrees to pay a certain amount of money to the plaintiff, or agrees to adhere to the obligations laid out in the deed of assignment.

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Deed Of Assignment For Rent Deposits Occupation Lease Deed Of Assignment Of Benefit Of Claim For The Freehold Or Extended Lease House Under Section 8 Or Section 14 Deed Of Assignment Of Equitable Interest In Residential Land Deed Of Assignment Of Goodwill And Intellectual Property Rights Transfer Of A General Partnership To An Llp Deed Of Assignment Of Property Sale Benefits [Section 42 Deed Of A

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Assignment and deed of assignment

What is assignment?

Like moveable and immoveable property, claims can also be sold. The transfer of a personal claim is called assignment. A creditor can transfer a personal claim to a third party. This third party will then supersede the original creditor. The creditor who sells the claim is called the assignor, the acquirer of the claim is called the assignee. The debtor is no party to this transfer, but the assignment has consequences for him: he will have to pay his debt to the new creditor.

Deed of assignment

There are some formal requirements for assignment. A distinction can be made between assignments with and without a notice to the debtor. Both forms of assignment have to be effected in writing, by deed of assignment to be more specific. The deed may be drafted between the creditor and the third party (private instrument) or in the presence of a civil-law notary (authentic instrument). The claim that is to be transferred must be sufficiently specified.

Notification of assignment and assignment without notice to the debtor

In case of an assignment with notification, the assignment will have to be notified to the debtor so he will know that he will have to pay to another party, as the debtor is not a party to the transfer. An assignment without notification does not require a notice to the debtor, but the deed of assignment will have to registered with the Tax Authorities. The debtor can be discharged from all his obligations by paying to the original creditor until he is notified of the assignment.

Assignment in practice

Collection agencies often buy up claims of businesses for the purpose of collecting these themselves. This is called factoring. Assignments also often play a part in insurance matters. If an insured party has suffered damage that may be recovered from a third party, the insurer may take over the claim for compensation from the insured party. The insurer then pays out the amount of the claim to the insured party and thus obtains a claim against the third party.

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What You Need To Know About The Deed Of Assignment

What Is a Deed of Assignment?

A deed of assignment refers to a legal document that facilitates the legal transfer of ownership of real estate property. It is an important document that must be securely stored at all times, especially in the case of real estate. In general, this document can be described as a document that is drafted and signed to promise or guarantee the transfer of ownership of a real estate property on a specified date. In other words, it serves as evidence of the transfer of ownership of the property, with the stipulation that there is a certain timeframe in which actual ownership will begin.

The main purpose of a deed of assignment is to transfer an interest or assign the title of property from the seller (an assignor) to a new buyer called (the Assignee). For a deed of assignment to fit the above purpose, it must contain certain details or particulars that will be briefly discussed below:

– Particulars of the parties to the transaction (names, address, status). – Date of transfer of ownership of the property from the vendor to the purchaser. – Nature of assignor’s (vendors) title. – The full description/particulars of the property with fittings & fixtures where applicable. – History of the property being transferred from the first time it was acquired to the current time of sale, including documents – it previously had to date. – Details of a verifiable document that the property possesses. – The consideration paid in respect of the property transaction (purchase price) and the willingness of the vendor to accept the price paid for the property. – The nature of the transaction and the capacity of the assignor (vendor). – Covenants both parties to the transaction undertake to fulfil. – Signature of the parties and that of the witnesses to the transaction. – Survey plan. – Details of the Legal practitioner who prepared the deed. – Section for the Governor’s consent to be signed and verified.

What are the Importance of A Deed of Assignment?

You cannot overemphasize the importance of a deed of assignment as a legal contract entered and executed between two parties to a real estate transaction.

It is Essential For Transferring Land To The Other Party Before It Expires It covers not only the basic requirements but also the precise terms agreed upon by the transaction’s participants. A real estate lawyer should draft a deed of assignment to ensure that it accurately represents the interests of all parties involved in the transaction. The assignee’s legal counsel creates the deed of assignment, which is subsequently vetted and executed by the assignor (vendor). The assignor’s lawyer may prepare the deed for scrutiny by the assignee’s lawyer if the property is part of an estate.

It Acts As A Legal Root of Title To The Property A deed of assignment is also important since it serves as a valid root of title to the land. It serves as valid evidence of transfer, particularly when the legitimacy of the land is disputed or a third party attempts to claim ownership of the same land.

Note: It’s also crucial that they register the deed of assignment with the relevant land registry. Especially where the land is located for perfection once they have exchanged it between the parties to the transaction. Perfection comes at the post-completion stage, which includes receiving the governor’s approval, stamping the deed of assignment, and ultimately, registration of the document to establish legal proof that the property has changed hands and to inform the public that the property has a new owner.

Conclusion A deed of assignment is important in any land transaction because it acts as the main document between the vendor and the purchaser to show that all negotiations, investigations, and other necessary due diligence have been done; the purchase price has been paid; other necessary conditions have been fulfilled by the parties to the transaction and the vendor has transferred all his rights in the property to the purchaser.

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Things you need to know about Deed of Assignment.

Last updated on 8 January 2024

1. What is a Deed of Assignment? 

A Deed of Assignment is a contract where the owner (the “assignor”) transfers ownership over property to another person (the “assignee”) by way of assignment. The assignee steps into the shoes of the assignor and assumes all the rights and obligations to the property.

If you will assign immovable property (e.g. land, house) then use this Deed of Assignment for Immovable Property instead.

2. When do you need a Deed of Assignment?

A Deed of Assignment is used when the owner wants to transfer ownership (and the rights and obligations) over property to another person.

3. What information do you need to create the Deed of Assignment?

To create your Deed of Assignment you’ll need the following minimum information:

• The type of assignor (e.g. individual or business) as well as name and details (e.g. nationality and address).
• The type of assignee (e.g. individual or business) as well as name and details (e.g. nationality and address).
• Brief description of the property to be assigned.

4.  How much is the document?

The document costs PHP 400 for a one-time purchase. Once purchased you have unlimited use and revisions of this type of document.

You can also avail of Premium subscription at PHP 1,000 and get (a) unlimited use of our growing  library  of documents (from affidavits to contracts); and (b) unlimited use of our “ Ask an Attorney ” service, which lets you consult an expert lawyer anytime for any legal concern you have.

Related Documents.

Activities that involve a Deed of Assignment sometimes use the following documents. You may be interested in them:

Deed of Assignment for Immovable Property

Assign your rights to immovable property (e.g. house, land) to another person

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Deed of Assignment vs Novation: A Comprehensive Guide

Home > Uncategorized > Deed of Assignment vs Novation: A Comprehensive Guide

• April 17, 2023

Deed of assignment and novation are two legal tools used to transfer contractual rights and obligations from one party to another. While both serve similar purposes, they differ in their implications and the extent of the transfer of rights and obligations. In this comprehensive guide, we will explore the key differences between the deeds of assignment and novation and provide insights into their respective uses.

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Deed of assignment and novation.

In the world of legal contracts, there are various tools available to transfer rights and obligations from one party to another. Two commonly used tools are deeds of assignment and novation. Both legal tools allow parties to transfer rights and obligations under a contract, but there are some differences between them.

A deed of assignment is a legal document that transfers the rights and obligations of one party to another party. It is often used in situations where one party wants to transfer its rights or obligations under a contract to another party without changing any other terms of the original contract. For example, if a homeowner wants to transfer their rights and obligations under a construction contract to a new contractor, they can use a deed of assignment to do so.

On the other hand, novation is a legal mechanism that allows parties to transfer both the rights and obligations of one party to another, and simultaneously replace one party in the original contract with a new party. In other words, novation replaces one party to the contract with another party, whereas a deed of assignment does not replace any party to the contract.

Novation is commonly used in situations where there is a change in ownership of a business or where a contractor wants to transfer its contractual obligations to a subcontractor. The novation process involves three parties: the original parties to the contract, the incoming party who will take over the obligations, and the outgoing party who will be released from their obligations.

In the following sections, we will delve deeper into the differences between the deeds of assignment and novation and explain how each legal tool works in practice.

Differences Between Deed of Assignment and Novation

When it comes to transferring rights and obligations under a contract, two legal tools commonly used are deeds of assignment and novation. Although both mechanisms involve the transfer of rights and obligations, they differ in various aspects, including the impact on the original contract and the consent required from the involved parties.

Rights and Obligations

Under a deed of assignment, the assignor transfers their rights and obligations to the assignee, but the original contract remains in force. In contrast, novation involves the creation of a new contract in which the original contract is extinguished, and a new contract is formed between the transferor, the transferee, and the obligor.

Original Contract

A deed of assignment does not affect the original contract between the assignor and the obligor, and the obligor must still perform their obligations to the assignee. In contrast, novation extinguishes the original contract, and the obligor’s obligations are owed to the transferee under the new contract.

New Contract or Deed

A deed of assignment does not require the creation of a new contract or deed, as the original contract remains in force. However, novation requires the creation of a new contract or deed, as the original contract is extinguished.

Consent Requirements

For a deed of assignment to be effective, the assignor must provide notice of the assignment to the obligor, but the obligor’s consent is not required. In contrast, novation requires the consent of all parties involved, including the transferor, the transferee, and the obligor.

It is crucial to understand the differences between a deed of assignment and a novation to choose the appropriate legal tool for transferring rights and obligations. Consider seeking legal advice before deciding which mechanism to use.

Novation in Detail

Novation is a legal process that transfers rights and obligations from one party to another. It differs from a deed of assignment in that it involves the substitution of a new party for an original party, rather than just the transfer of rights.

How a Novation Works

Novation requires the consent of all parties involved, including the new party that is taking on the rights and obligations. The process involves the following steps:

• Agreement: The parties involved must agree to the novation and the terms of the new arrangement.
• Documentation: A novation agreement must be drafted and signed by all parties involved.
• Communication: All relevant parties, such as banks or insurers, must be informed of the novation and give their consent.
• Implementation: The novation takes effect once all parties have signed the agreement and the necessary documentation has been completed.

Advantages and Disadvantages of Novation

There are several advantages to using novation in various situations, such as:

• It allows for the substitution of parties without the need for a new contract.
• It can simplify complex contractual arrangements.
• It can allow for a transfer of obligations to a party better equipped to fulfil them.

However, novation also has some potential drawbacks, such as:

• It requires the consent of all parties involved, which can be difficult to obtain.
• It can result in the loss of important rights or benefits for the original party.
• It can be more expensive and time-consuming than other legal tools.

Examples of Novation

Examples of novation include:

• When a new contractor takes over a construction project from the original contractor, assuming all the rights and obligations under the original contract.
• A subcontractor is working on a construction project for a main contractor. The subcontractor wants to assign the contract to another subcontractor due to financial difficulties. The main contractor agrees to novate the contract to the new subcontractor, who then takes over the subcontractor’s obligations and responsibilities.
• An engineering firm is contracted by a city to design and construct a new road. The engineering firm decides to sell the design and construction contract to another firm. The city agrees to novate the contract to the new firm so that the new firm can complete the project.
• A supplier has a contract with a contractor to supply building materials for a construction project. The supplier decides to sell the business to another company. The contractor agrees to novate the contract to the new company so that the new company can fulfil the supplier’s obligations under the contract.

Assignment in Detail

When a party to a contract transfers their rights and obligations to a third party, this is referred to as an assignment. The process of assignment is less complex than that of novation, as it does not require the formation of a new contract. Instead, a contract that already exists between two parties is simply transferred to a third party. Here are some details of the assignment:

How an Assignment Works

The process of assignment generally involves the following steps:

• The original parties to the contract must agree to the assignment.
• The assignor (the party transferring their rights and obligations) must provide written notice of the assignment to the other party.
• The assignee (the third party taking over the rights and obligations) must accept the assignment in writing.

Advantages and Disadvantages of Assignment

Like novation, assignment has its advantages and disadvantages. Some of the benefits of using assignment include:

• Flexibility: Assignment is a more flexible process than novation, as it doesn’t require the formation of a new contract.
• Simplicity: The process of assignment is less complex and less time-consuming than that of novation.

However, there are also some disadvantages to using assignment:

• No release from liability: Unlike novation, assignment does not release the assignor from their obligations under the original contract.
• Lack of control: The original party to the contract may be concerned about losing control over who they are dealing with if an assignment takes place.

Examples of Assignment

Here are some examples of assignments in the construction industry:

• A subcontractor assigns their right to receive payment for their work to a third party, such as a lender, to secure a loan.
• A contractor assigns their right to receive payment from the owner to a supplier or vendor to pay for materials or equipment used in the project.
• A developer assigns their right to receive payments from buyers of individual units in a development to a lender to secure financing for the project.
• A contractor assigns their right to receive payment from the owner to a joint venture partner to share the risk and reward of the project.
• An owner assigns their right to receive payments from a contractor to a surety to secure a performance bond for the project.

No Assignment Clauses in Construction Contracts

No assignment clauses are common in construction contracts and can have significant implications for both parties involved. These clauses prevent the transfer of rights or obligations to a third party without prior consent from the other party. In the context of construction contracts, the party with the most interest in such clauses is the Principal, who is usually the owner of the project.

Purpose of No Assignment Clauses

There are several reasons why Principals include no assignment clauses in construction contracts. These include:

• Maintaining control: By preventing the assignment of rights and obligations, the Principal maintains control over the project and ensures that all decisions and actions are made by the original contracting parties.
• Protecting interests: No assignment clauses can help protect the Principal’s interests by preventing the transfer of obligations to a third party who may not have the same level of expertise or resources as the original party.
• Avoiding conflicts: No assignment clauses can prevent conflicts that may arise from a change in the parties involved in the contract.

How to Negotiate a No Assignment Clause

If a Principal wishes to include a no assignment clause in a construction contract, they should be prepared to negotiate this with the other party. Here are some tips for negotiating a no assignment clause:

• Be clear about the reasons for the clause: The Principal should explain their reasons for including the no assignment clause and how it will benefit both parties.
• Consider exceptions: The Principal should consider including exceptions to the no assignment clause, such as allowing assignment with prior written consent or in the event of a sale of the business.
• Be reasonable: The Principal should ensure that the no assignment clause is reasonable and does not unfairly restrict the other party’s ability to conduct their business.
• Seek legal advice: Both parties should seek legal advice before finalising the contract to ensure that the no assignment clause is enforceable and does not contravene any laws or regulations.

No assignment clauses are an important consideration in construction contracts and should be negotiated carefully to protect the interests of all parties involved.

In conclusion, both deeds of assignment and novation are important legal tools that allow for the transfer of rights and obligations in a contract. However, they differ in terms of the impact on the original contract, the need for a new contract or deed, and the consent requirements of involved parties. It is important to carefully consider the specific circumstances and objectives of the parties involved before choosing the appropriate legal tool.

In the case of construction contracts, no assignment clauses play a crucial role in protecting the interests of Principals. They ensure that the Principal has control over who performs the works and avoids having to work with an unknown or untested contractor. Principals must understand the purpose of no assignment clauses and negotiate them carefully to ensure that their interests are protected.

Ultimately, seeking legal advice is recommended when deciding which legal tool to use or negotiating the terms of a contract. A lawyer can provide guidance on the best course of action and ensure that the parties involved are aware of their rights and obligations.

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FREE 17+ Deed of Assignment Samples in PDF | MS Word

A deed is referred to as a legal document that serves as an instrument used regarding the transfer, assignment, or bargain of a property or rights. Deeds need to be signed, sealed, and delivered so that it will be considered valid. Deeds are often associated with property transfers, like transferring the ownership of the title of a property to another.

Deed Assignment Samples Pdf Word

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A deed of assignment is one type of deed that is used not only in legal practices but also in the business industry during sale and transfer transactions. We will be touching on this important legal document in this article analysis . Select deed of assignment samples and templates have been included in this article for your convenience. You may download these sample and templates for free. Useful information like what it is, its uses, its components, and many more are available here. Feel free to check them out below.

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What Is a Deed of Assignment?

A deed of assignment is a document that contains the details of a transaction that involves the transfer of ownership of a property from one entity to another. It works just like that of an sample agreement because a deed of assignment involves two parties in it who both need to agree to the terms and conditions of the assignment. The word transfer best determines or best describes what a deed of assignment is.

There will always be two parties involved in a deed of assignment and they are the assignee and the assignor. The the person or party who makes the transfer their rights to another person or party is called the assignor. The person who gets or receives the rights to a property or thing from the assignor is called the assignee. Both parties are important in the completion of a deed of assignment.

The concept of a deed of agreement is very similar to that of a legal agreement or legal contract, where there is a party who creates an offer and another party who accepts the offer. To learn more about deeds and other related topic, you may check out our website view them from there. To name a few examples are quit claim deeds, mortgage deeds , and sample grant deeds form .

How Is a Deed of Assignment Different from That of a Deed of Sale?

A deed of sale is also a sample form of document that transfers one’s rights on a property or thing to another. That is exactly the same as a deed of assignment. They may be used for the same reason, which is to transfer property rights, but there is still a difference between a deed of assignment and a deed of sale, which is evident in the details of each document and how they work. The following is a comparison that will help you understand their differences easily.

• A deed of sale is used mainly in real estate business plan to transfer the rights of the real estate holder, which is the seller, to that of the buyer once full payment for the real estate property is made. This transfer involves monetary payment by the buyer to the seller for the said real estate property. In a deed of assignment, the transfer of rights to a property may or may not require the assignee to make a payment for the said property nor does the assignor ask for payment for it.
• The buyer and the seller need to comply to the terms and conditions of the sales contract and they must do their share of responsibilities or obligations while the contract is still ongoing and even if the transfer has been completed. This is not the case in a deed of assignment. The transfer of rights is absolute, which means that once the transfer has been completed, the assignor no longer has anything to do with the property rights that they have transferred to another. In other words, they have totally given up all their rights to the said property or thing.
• A deed of sale is recognized by the law as the purchase or sale of a property, rather than a transfer of the rights of that property.
• A deed of sale may be seen as a takeover of rights while a deed of assignment may be seen as a transfer of responsibilities.

You may also be interested in other related topics, like sample warranty deed forms and general warranty deed samples .

Uses of a Deed of Assignment

What are the uses of a deed of assignment? There are a number of things that a deed of assignment is used for and they are as follows:

• A deed of assignment is used as an evidence that a certain transfer transaction has taken place between an assignor and the assignee.
• It is a document used to show that the assignor has transferred all of their rights, claims, interests, and ownership of a certain property to the assignee.
• It is a proof of the assignor’s promise that they are transferring their rights and ownership to the property to the assignee.
• A deed of assignment is not only used to transfer one’s rights to another, but it is also used to transfer the responsibilities or obligations of the assignor to the assignee. These responsibilities or obligations come together with the ownership and rights to the said property.

Real estate businesses and other businesses involved in the sale and purchase of different kinds of properties commonly use a deed of assignment together with other important legal documents, like real estate sales contract , property sales contract , and  home sales contract .

What Are the Components of a Deed of Assignment?

There are a lot of components of a deed of assignment and it is important that you know of these components if you are going to study or get involved in one. Below is the list of the components of a deed of assignment that you need to know.

• The introduction, which includes the date when the assignment is made and signed, the commencement, the names of both the parties involved, and the recital
• The operative part, which includes the testatum or the witnesses, and other clauses like sample receipt clause, the consideration, the word grant, the parcel, the capacity of both the vendor and the covenant for the title, exceptions and reservations, and habendum
• Other miscellaneous clauses like the covenant for indemnity, both for assignor and assignee
• The testimonies
• The schedules
• The execution of the deed

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How to Create a Deed of Assignment

Believe it or not, you can create a deed of assignment on your own. You just need the right steps to guide you and the appropriate resources to help you have it done. Below are some easy-to-follow steps that you will really find useful.

• Decide what your deed of assignment is going to be about. Think of the details that you want to include in it that specifically has something to do with its transfer.
• If you must, list down these details and other specifications that you want to include in your deed of assignment.
• Once you have that decided or identified, go online and look for a deed of assignment template that contains the same details and specifications that you need, or a template that is similar to what you need.
• When you already found the template, download it to your computer or laptop. Also check if it the file type is supported by the sample applications you have on your computer or laptop, like Word or PDF.
• Open the downloaded file. If you need to change anything, or add and remove some parts, feel free to do so. Just make sure that it does not change the meaning of the paragraph, sentence, or part that you made changes to.
• When you are satisfied with the changes that you have made, go back to the very first page and review your work. Make sure that everything is covered in your document.
• After finalizing your work, save the changes that you have made. Saving your work allows you to retrieve it later on if you have a need for it in the future.
• Print enough copies that you need for your transaction.

Now you should have a deed of assignment of your own with your preferred details. Things get pretty easy and convenient with the use of templates. It is just like the one we did above. To get hold of other useful templates, feel free to visit our website and check a variety of templates from there. Other titles you may be interested in are Quit Claim Deed, Investment Contract , and  Shareholders Agreement .

Advantages of Deed of Assignment Templates

With the steps above, you probably have an idea how great templates are. But its greatness does not stop there because more of it are in store for you. Below is a list of some of the advantages of a deed of assignment template.

• There are different varieties of deed of of assignment templates online so you can look for the template that is just right for your needs.
• The templates are from reliable and trusted sources so you are sure that the one you will find online is capable of handling your situation.
• Using ready-made templates ensures that the deed of assignment produced is one that is complete.
• The creation of the document becomes fast and convenient for anyone who wishes to make their very own deed of assignment.
• The use of the templates is highly recommended because of its level of accuracy, which is belied to be little to no mistakes at all.

That is a lot of advantages that you can get from these templates. Another good thing is, even with just sample on hand, you can pretty much get the same advantages similar to that of templates. If you find this article helpful, you will also love other articles that we offer on our website. To name a few are Asset Purchase Agreement ,  Essential Financial Statements for Your Business , and  Legal Bill of Sale .

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Meaning of deed of assignment in English

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Examples of deed of assignment

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null and void

having no legal force

Sitting on the fence (Newspaper idioms)

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DEED OF ASSIGNMENT IN NIGERIA

REGISTRATION FOR DEED OF ASSIGNMENT IN LAGOS STATE

DEED OF CONVEYANCE IN NIGERIA

 A deed of assignment is an agreement where an assignor assigns his or her ownership in land or property to an assignee. The deed of assignment in Nigeria contains very pertinent information for a real estate transaction. The deed of conveyance in Nigeria also comprises the same information as a deed of assignment; there is no significant difference between the two. The state within Nigeria where the property is being transacted usually determines whether the deed of the assignment will be the appropriate property transfer agreement to be drafted or deed of conveyance. The deed gives a specific description of the property that is included in the transfer of ownership, consideration and other covenants between parties.

In most situations, when the deed of assignment has been exchanged between both parties, it has to be recorded in the land registry to show legal proof that the land has exchanged hands and the public should be aware of the transaction. Such recorded deed of assignment comes in the form of either a Governor’s consent and registration. The Deed of Assignment spells out the key issues in the transaction between the seller and the buyer so that there will not be any confusion or assumption after the property has been transferred to the new owner.

Features of Deed of Assignment

Every deed of assignment must contain certain information, which includes the followings:

• The names of the parties to the agreement
• The address of both parties.
• The history of the land in question. Such history may include how it was first obtained down to the moment it’s about to be sold.
• The agreed cost of the land and the willingness of the seller to finally accept that price paid for the land
• The description and size of the land to be transferred
• The covenants or promises both parties choose to undertake to perfect the transfer of the document
• The signature of the parties to the assignment and witnesses to the transaction
• Finally, the section for the Governor’s Consent that must be signed by the Governor or any government official designated by Governor for such purpose in the course of registration of the deed.

The steps for registration are as follows;

Upon the execution of the Deed of Assignment, it must be duly registered and be consented to by the Governor in accordance with the provisions of the Land Use Act, LFN 2004.

The consent of the Governor is important before the actual alienation or the sale of any interest in land in Nigeria. The Land Use Act makes it mandatory for the consent of the Governor to be obtained. Section 22 of the Act provides that it shall not be lawful for the holder of a statutory right of occupancy granted by the Governor to alienate his right of occupancy or any part thereof by assignment, mortgage, transfer of possession, sublease or otherwise howsoever without the consent of the Governor first had and obtained. Section 22(2) of the Land Use Act further provides that “ the Governor when giving his consent to an assignment mortgage or sub-lease may require the holder of a statutory right of occupancy to submit an instrument executed in evidence of assignment, mortgage or sub-lease and the holder shall when so required to deliver the said instrument to the Governor in order that the consent given by the Governor under subsection(1) may be signified by endorsement thereon.” The power to grant consent can be delegated and this is provided for in section 45 of the Land Use Act.

By and large, upon the execution of a deed of assignment by parties to a property transaction, the procedure and steps for the registration of the executed deed of assignment in Lagos State or any other jurisdiction in Nigeria involves 3 major steps namely; Obtainment of Governor’s Consent; Stamping of Deed; and Registration

• Obtainment Governor’s Consent

To obtain the Governor’s consent in Lagos state, the application should be made with the land form 1c obtainable at the lands registry, and the form should be signed by the purchaser and the vendor, where the purchased land is already registered in vendor’s name at the registry.

The application form shall be submitted with the followings:

• A covering letter addressed to the Director of the Department of Lands and Housing, Lagos State
• The payment of consent fee after the property has been inspected and valued.
• Current tax clearance certificate of the two parties. In the case of a mortgage, only that of the mortgagor is required.
• Where one of the parties is a corporate body, the corporate body must supply the revenue certificate papers for its staff remitted to government and the current tax clearance certificates for the directors.
• In the case of a developed property, there shall be a requirement for the building plan.
• Six (6) copies of the Deed of Assignment for which consent is sought.
• Evidence of up to date payment of ground rent and legal charges.
• Evidence of payment of development levy.
• Receipt of payment of charting fees and endorsement fees
• A Certified True Copy (CTC) of the assignor’s land document obtainable from the lands registry.
• Stamping of the Deed:

After the Governor grants consent, the solicitor must ensure that the stamp duty charged on the transaction is paid. It is advised that consent be obtained before payment of stamp duties since if the Governor refuses the consent, the duties paid cannot be recovered. Stamp duties are taxes imposed on certain transactions, one of which is the alienation of an interest in a property. The effect of failure to pay stamp duties are;

• The instrument will not be accepted for registration
• The instrument will be inadmissible in evidence in court as stipulated under section 22 of the Stamp Duties Act
• It will attract a penalty in cases of late registration
• Registration:

The importance of registering the deed of assignment or conveyance, which alienates interest in land is that it is a document affecting land in which one party confers, transfers, limits, charges or extinguishes in favour of another party a right or title to or interest in land. Although, section 25 of the Land Instrument Registration Law of Lagos State provides that registration does not cure defects in title, however, a deed of assignment is a registrable instrument and must be registered within 60 days of execution. Registration has lots of advantages; which includes

• It is an indication that the title is not encumbered
• Where an instrument is not registered, it cannot be pleaded because it is inadmissible in evidence
• It gives priority, that is, first in time will prevail where there are rival instruments are registered.

The Deed of Assignment, otherwise known as Deed of Conveyancing in other states in Nigeria is the document transferring the sale of land or property from one buyer to another. The names of the parties to a Deed of Assignment are Assignor (the Seller) and Assignee (the purchaser).

When a deed of assignment has been duly executed among parties to a land transaction, it must be duly registered with the state government where the land is located. The registration of land’s title shall commence with the obtainment of Governor’s Consent with the provisions of the Land Use Act.

By Real Estate Law Team at Resolution Law Firm

Email: [email protected]

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Meaning, Importance, and Purpose Of Deed of Assignment in Nigeria

• 2 years ago
• Business , Uncategorized

A deed of assignment is an important document to have when transferring of ownership of land or property from one party to the other. There has to be document agreement between a buyer known as assignor (the seller) and assignee (the buyer or the purchaser)before transaction can be completed.

What is A Deed of Assignment?

A Deed of Assignment is an essential legal land document that records a sale of land. Besides that, it transfers interest and title in real property from one party to another, starting from the commencement date stated in the document.

A deed of assignment’s major function is to transfer an interest in or assign the title of property from a seller (an assignor) to a new buyer (the Assignee). A good deed of assignment must include some details and they are listed below:

• Names, address, status of the transaction’s participants.
• Day on which they transferred the property from the seller (vendor) to the buyer.
• The nature of the assignor’s (vendors’) title.
• Entire description/ specifications, including any fittings and fixtures of the property.
• The history of the property being transferred from the time it was initially obtained to the current moment of sale, including all preceding documentation.
• Details about a verifiable document the property bears.
• The amount of money paid in a property transaction (buy price) and the vendor’s readiness to accept the price paid for the property.
• The nature of the transaction and the assignor’s capacity (vendor).
• Both parties to the transaction agree to keep the agreements.
• The parties’ signatures, as well as the signatures of the witnesses to the transaction, are necessary.
• Plan for the survey.
• Information about the lawyer who prepared the deed.
• The Governor’s assent must be signed and validated in this section.

RELATED: OTHER FEES YOU SHOULD KNOW WHEN BUYING A PROPERTY

What is The Importance of A Deed of Assignment?

It a legal contract between two parties to a real estate transaction therefore you can not overemphasize its important. Some of its important are:

1. It is Essential For Transferring Land To The Other Party Before It Expires

It covers not only the basic requirements but also the precise terms agreed upon by the transaction’s participants. A real estate lawyer should draft a deed of assignment to ensure that it accurately represents the interests of all parties involved in the transaction. The assignee’s legal counsel creates the deed of assignment, which is subsequently vetted and executed by the assignor (vendor). The assignor’s lawyer may prepare the deed for scrutiny by the assignee’s lawyer if the property is part of an estate.

2. It Acts As A Legal Root of Title To The Property

A deed of assignment is also important since it serves as a valid root of title to the land.

It serves as valid evidence of transfer, particularly when the legitimacy of the land is disputed or a third party attempts to claim ownership of the same land.

Note: It’s also crucial that they register the deed of assignment with the relevant land registry. Especially where the land is located for perfection once they have exchanged it between the parties to the transaction. Perfection comes at the post-completion stage, which includes receiving the governor’s approval, stamping the deed of assignment, and ultimately, registration of the document to establish legal proof that the property has changed hands and to inform the public that the property has a new owner.

What Is The Purpose of The deed?

It’s essential to always discuss issues like this with your lawyer for clarifications, especially if you want to buy land. A deed’s purpose is to transfer legal ownership of a property or asset from one person or corporation to another.

Who Needs To Sign A Deed of Assignment?

The assignor and the assignee(s) must both sign the deed, and they must tick the corresponding box (or boxes) for each signature. However, if there is a joint tenancy and two people own the policy. Therefore, both policyholders must act as assignors.

How Much Does The Deed of Assignment Cost in Nigeria?

A Deed of Assignment can only be prepared by a lawyer in Nigeria.

There is a scale of charges to checkmate the charges of lawyers for handling land matters. But because this scale of charges is primitive. Lawyers would rather negotiate their percentage in real estate transactions based on the value of the assets to be purchased. This is because they also permit them to engage in a simple contract for any services, including deed preparation.

Several criteria determine the percentage a lawyer may charge to produce a deed of assignment. Expertise or experience, as well as the value of the property to be purchased, are among these criteria.

Most lawyers in Nigeria typically charge between 5% to 10% of the cost of the property to prepare a deed of assignment. Therefore, for a property being purchased at N40,000,000, a lawyer may charge N2,000,000 (5%) of the cost to prepare deeds and other necessary documents.

In some situations, the higher the property’s worth, the lower the percentage. There could be situations where a lawyer may charge above 10% of the total cost of the property. That’s if the purchase price is very low, or even less than 5%. Or if the property’s value is very high, or other circumstances such as an existing relationship between the lawyer and the purchaser.

Finally, in Nigeria, there is no set fee or cost for creating a deed of assignment. The price of the property typically decides the cost of a deed of assignment. Besides that, other factors, such as a prior relationship, could influence its cost.

Who Prepares The Deed of Assignment?

To avoid misunderstanding along the way, you should know who has to prepare the deed of assignment. The assignee’s legal practitioner drafts the deed of assignment, which they hand to the assignor (vendor) for vetting and execution. If the property is part of an estate, the assignor’s lawyer may prepare the deed for examination by the assignee’s lawyer.

Deed of Assignment in Nigeria – How To Register

Following the execution of the Deed of Assignment, the Governor must properly register and approve it in compliance with the Land Use Act, LFN 2004.

In essence, after parties to a property transaction execute a deed of assignment, the procedure, and steps for registering the executed deed of assignment in Lagos State or any other Nigerian jurisdiction entail three primary steps: Obtaining Governor’s Consent, Stamping of Deed, and Registration.

1. Obtain A Governor’s Consent

When they already registered the purchased land in the seller’s name at the registry. They should apply with the landform 1c accessible at the lands registry. The purchaser and the vendor should sign the form.

List of Things To Submit Your Governor’s Consent Application With

• A covering letter to the Director of the Lagos State Department of Lands and Housing.
• After inspecting the property and its values, they’ll pay the consent fee.
• Both parties’ current tax clearance certificates. They only require the mortgagor’s information in the case of a mortgage.
• When one party is a corporation, the corporation must provide the government with revenue certificate papers for its employees and current tax clearance certificates for the directors.
• There will be a demand for the building plan in the case of developed property.
• The Deed of Assignment for which they requested its consent in six (6) copies.
• Proof of up-to-date ground rent and legal charges payment.
• Proof of payment of development levy.
• Payment of charting and endorsement fees receipt.
• A Certified True Copy (CTC) of the assignor’s land document is accessible from the land’s registry.

2. Pay Stamp Duties

Following the Governor’s approval, the solicitor must guarantee that they pay for the transaction’s stamp duty. They recommend that consent be obtained prior to the payment of stamp duties, as you cannot recover the duties you paid if the Governor rejects consent. They levy stamp duties on a variety of transactions, one of which being the transfer of a property interest.

The Consequences of Failure To Pay Stamp Duties

• They will not accept the instrument for registration.
• The instrument will be inadmissible in evidence in court as they stipulated it under section 22 of the Stamp Duties Act.
• In cases of late registration, it will attract a penalty.

3. Register The Deed

A deed of assignment or conveyance that alienates a land interest is important to register. This is because it is a document that affects land in which one party confers or extinguishes a right or title interest in land in favor of another party.

Although registration does not cure defects in title, a deed of assignment is a registrable instrument that they must register within 60 days after execution. This is according to section 25 of the Lagos State Land Instrument Registration Law.

Advantages of Registering A Deed of Assignment

There are several advantages to registering a deed of assignment, they include:

• It shows that the title is free of entanglements.
• It is difficult to plead an instrument that has not been registered since it is inadmissible in evidence.
• Where there are competing instruments registered, it gives priority to the first in time.

Who Pays For The Deed of Assignment?

As with any other commercial transaction, sellers provide receipts to buyers as confirmation of payment. In this context, the deed of assignment is also relevant. The buyer does not pay for receipts, rather the seller owes the buyer the responsibility of receiving a receipt. The Nigerian law compels the seller to execute a deed of assignment to the buyer.

In this scenario, the family’s leader and the most important members owe you a duty to sign the paper.

In Conclusion

In any land transaction in Nigeria, a deed of assignment is crucial because it serves as the main document between the vendor and the purchaser.

It highlights that they have completed all negotiations, investigations, and other necessary due diligence. Besides that, it shows that they’ve paid the purchase price and the parties to the transaction have met all other necessary conditions. Also that the vendor has transferred all of his rights to the property.

The parties involved must record the deed of assignment with the state government. They should do it where the land is located once all parties to a land transaction have signed it. The land-use legislation states that the registration of a land’s title must start with the governor’s approval.

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• The Assignment Of Litigation Rights And Champerty

It is not often that we examine a case involving the doctrine of champerty. The last time we did so was on March 8, 2023 ( here ). We also examined the champerty doctrine in 2021 ( here ), 2020 ( here ), and 2016 ( here ).

Today, we examine the champerty doctrine in our discussion of IKB Intl. S.A. v. Morgan Stanley , 2024 N.Y. Slip Op. 01675 (1st Dept. Mar. 26, 2024) ( here ).

Champerty is the prohibited practice of purchasing claims for the purpose of commencing litigation. It has been described as “a venerable doctrine developed hundreds of years ago to prevent or curtail the commercialization of or trading in litigation.” 1

The doctrine of champerty is codified in New York within Judiciary Law § 489. 2 Under Judiciary Law § 489, no corporation “shall solicit, buy or take an assignment of … a bond, promissory note, bill of exchange, book debt, or other thing in action, or any claim or demand, with the intent and for the purpose of bringing an action or proceeding thereon.” However, for an assignment of a claim to be void for champerty, the assignee must have made the purchase “for the very purpose of bringing such suit” to the “exclusion of any other purpose.” 3 Thus, while assignments “for the primary purpose of obtaining costs or [harassment]” are void as champertous, 4 assignments are not champertous where the intent to bring a suit is merely “incidental and contingent” to other rights. 5

Moreover, champerty does not apply where the assignee had a “preexisting proprietary interest” in the subject matter. 6

IKB began in the years immediately prior to the financial crisis of 2007-2008. Plaintiff IKB International S.A. (“IKB S.A.”) was a commercial bank incorporated in Luxembourg.

IKB S.A. purchased a number of certificates (“Certificates”) for residential mortgage-backed securities from Morgan Stanley, allegedly in reliance on misrepresentations that Morgan Stanley made in its offering documents. In particular, Morgan Stanley allegedly made misrepresentations to IKB S.A.’s investment managers, Standish Mellon and BlackRock, including misrepresentations regarding loan-to-value and combined loan-to-value statistics, owner-occupancy status of borrowers, and adherence to the originators’ underwriting guidelines. The contemporary value of the Certificates collapsed during the onset of the financial crisis as the poor quality of the underlying loans and resulting increased credit risk became apparent. Ultimately, IKB S.A. was placed into liquidation as part of the German government’s bailout of IKB S.A.’s parent, IKB A.G.

In November 2008, IKB S.A. sold the Certificates to IKB A.G. Two weeks later, IKB A.G. sold the Certificates to Rio Debt Holdings (Ireland) Limited (“Rio”), a newly created Irish special purpose vehicle. As part of the sale of Certificates to Rio, IKB A.G. became a junior lender to Rio and also became a portfolio administrator to Rio.

IKB A.G. and Rio subsequently executed an assignment on May 9, 2012 (the “2012 Assignment”) in which Rio assigned to IKB A.G. “all the rights of action and claims against any other party with respect to the Securities it may have obtained in connection with its purchase of the Securities from IKB Deutsche Industriebank AG … except rights of action and claims for the receipt of interest and principal on the Securities.” In exchange, IKB A.G. agreed to provide to Rio “a sum equal to the proceeds of any recovery stemming from a resolution of claims relating to the Assigned Rights, net of all agreed costs, taxes and expenses, which shall be set out and governed by a separate agreement to be executed by the Parties.”

IKB A.G. maintained that under a supplementary deed (the “Supplementary Deed”) and other governing documents, the parties agreed that 80% of the net litigation proceeds would revert to IKB A.G. Rio and IKB A.G. executed the Supplementary Deed on January 11, 2013—after Plaintiffs filed the summons in the action—but gave it retroactive effect from May 9, 2012.

IKB A.G. filed the summons in November 2012 and later filed the complaint on May 17, 2013. The complaint alleged causes of action for fraud, fraudulent concealment, aiding and abetting fraud, and negligent misrepresentation. Defendants moved to dismiss the complaint, in part for lack of standing, arguing that the 2012 Assignment of the fraud claims back to IKB A.G. was void as champertous. The motion court denied the motion, finding that Defendants had not shown that “IKB AG’s primary or sole purpose [for the assignment] was not to enforce a legitimate claim, or that the claim was not acquired as part of a larger transaction or for leverage in other disputes between the parties.” The motion court determined that IKB A.G.’s intent in the 2012 Assignment was a factual question that required further development of the record. However, the motion court dismissed the causes of action for fraudulent concealment and negligent misrepresentation.

On summary judgment, Defendants again sought dismissal on the basis of champerty. The motion court held that the 2012 Assignment was not champertous “because IKB AG had a preexisting proprietary interest in the subject matter.” The motion court explained that

In order to finance the initial assignment of the Certificates to Rio in 2008, IKB AG and Rio entered into a loan agreement. Pursuant to the 2008 loan agreement between IKB AG and Rio, IKB AG as junior lender was entitled to 80% of the profits from the assets. While Defendants are correct that the loan has since been paid down to one dollar, this does not change the fact that, unlike other champertous assignments, the 2012 Assignment indisputably did not involve a “stranger” to the transaction, but a party with a prior interest. 7

The motion court also held that Defendants “failed to establish that the sole purpose for the 2012 Assignment was to profit off of litigation, to the exclusion of all other purposes.” The motion court explained that “[a]n assignment is not champertous merely because the parties enter into the assignment ‘for the purpose of collecting damages, by means of a lawsuit.’” 8 “Rather,” said the motion court, “there is a key distinction between ‘acquir[ing] a right in order to make money from litigating it [champertous] and … acquir[ing] a right in order to enforce it [not champertous].’” 9

The motion court found that Plaintiffs “provided evidence that they [were] still entitled to 80% of the future cash flows under the 2008 loan agreement with Rio because the loan was not paid off entirely—even though it was paid down almost in its entirety.” “Therefore,” concluded the motion court, “regardless of whether or not the 2012 Assignment’s primary purpose was litigation, Defendants [had] not provided sufficient evidence to establish that the sole purpose, to the exclusion of all other purposes, was to profit off of litigation.” “As such,” said the motion court, “Defendants have failed to establish that the 2012 Assignment is void as champertous.”

The Appellate Division, First Department unanimously affirmed.

As an initial mater, the Court rejected Defendants’ argument (as the Court framed it) that “any assignment of litigation claims — even when fashioned to protect an independent litigation right of the assignee — must necessarily be void,” stating that such a formulation was “not the law.” 10 “Rather,” explained the Court, “the champerty doctrine is intended to prevent opportunistic parties from profiting from litigation claims that otherwise would not have been brought — not preventing the assignment of legitimate claims to a party holding a beneficial interest in those claims to enforce its own rights.” 11 “The critical distinction,” noted the Court, was “‘between acquiring a thing in action in order to obtain costs and acquiring it in order to protect an independent right of the assignee.’” 12

The Court also held that the motion court “correctly found that champerty only prohibits the acquisition of a cause of action by a ‘stranger’ to the underlying dispute.” 13 The Court found that the evidence “establishe[d] that plaintiff IKB Deutsche Industriebank A.G. had an independent interest in pursuing the claims, and was not a stranger to the action.” 14 “IKB A.G. owns 100% of plaintiff IKB International, S.A., the original purchaser of the assets, and was the assignor’s junior lender beginning in November 2008,” said the Court. “Defendants’ reading of Justinian [did] not compel a different result,” concluded the Court. 15

• Bluebird Partners, L.P. v. First Fidelity Bank, N.A. , 94 N.Y.2d 726, 729 (2000).
• Ehrlich v. Rebco Ins. Exchange, Ltd. , 225 A.D.2d 75, 77 (1st Dept. 1996).
• See Richbell Information Servs., Inc. v. Jupiter Partners , 280 A.D.2d 208, 215 (1st Dept. 2001) (citing Moses v.McDivitt , 88 N.Y. 62 (1882)). In Justinian Capital SPC v. WestLB AG, N.Y. Branch , the New York Court of Appeals explained that to “constitute the offense [of champerty] the primary purpose of the purchase must be to enable [one] to bring suit, and the intent to bring a suit must not be merely incidental or contingent.” 28 N.Y.3d 160, 166 (2016) (internal quotation marks omitted).
• See 71 Clinton St. Apts. LLC v. 71 Clinton Inc. , 114 A.D.3d 583, 585 (1st Dept. 2014); Trust For the Certificate Holders of Merrill Lynch Mortg. Investors, Inc. v. Love Funding Corp. , 13 N.Y.3d 190, 198 (2009).
• New York Chinese TV Programs, Inc. v. U.E. Enterprises, Inc. , 1989 WL 22442, *13 (S.D.N.Y. Mar. 8, 1989).
• See Love Funding , 13 N.Y.3d at 198.
• Citing Jamaica Public Service Co., Ltd. v. La Interamericana Compania De Seguros Generales S.A. , 262 A.D.2d 73, 74 (1st Dept. 1999); In re Imax Sec. Litig. , 2011 WL 1487090, *6 (S.D.N.Y. Apr. 15, 2011).
• Quoting Universal Inv. Advisory SA v. Bakrie Telecom Pte., Ltd. , 154 A.D.3d 171, 180 (1st Dept. 2017).
• Quoting id.
• Slip Op. at *1.
• Id. (citation omitted).
• Id. (citing Justinian , 28 N.Y.3d at 167) (internal quotation marks omitted)).

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