An attorney said you can't assign contracts in New Jersey. Is this true?

Question

I spoke with an attorney today about wholesaling and they told me that you have to own the property to sell it. Anything besides selling property you own in practicing real estate without a license. I am assuming that means you have to double close in New Jersey. I am curious how fellow wholesalers in New Jersey getting around this.

I am also looking for a good title company or closing attorney in North Jersey. Any good recommendations?

Dion DePaoli · Answer

There is some concept confusion there. If you are a principal in the contract as a buyer or seller, you have an interest in said property and can exploit that interest in selling or buying. If the contract allows for an assignment it is perfectly legal. That said, some lenders will not allow assigned contracts for financing and some contracts do not allow for assignments.

If you are not a principal in the transaction then you are indeed brokering the loan and would require a license as you acting as an agent.

Benjamin Bryant · Answer

Thanks for clearing that up guys. I think it is time for me to find a new attorney.

Will Barnard · Answer

Dion nailed it, either the attorney has no clue what he is talking about or the info was misunderstood. If you have a purchase contract with a seller and that contract does not disallow assignments, you have every legal right to assign it.

Steve Babiak · Answer

When you assign a contract, you don't sell the property - you sell the contract you have with the property owner.

Keith Lutz · Answer

Benjamin Bryant, go to a REI club, to get contacts for attorneys and title companies.  If you need the names of some hit me up.

An attorney said you can't assign contracts in New Jersey. Is this true?

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