Legal Question in Real Estate Law in California

Re: Are real estate contracts assignable.

Yes, unless there is some aspect of the contract that calls for personal performance by the original buyer, or where substitution of the assignee impairs an expectation of the seller.

An example of personal performance would be if you sell your house to Picasso in exchange for his promise to paint your portrait. If Picasso assigns the contract to Joe Sixpak, you could then refuse to sell (to Joe).

An example of an impaired expectation would be if you agreed to sell your house to Bill Gates and carry a second mortgage. Bill assigns the contract to the aforementioned Joe. Your expectation of prompt and full payment is materially lessened by the assignment. You can refuse to sell to Joe. If Bill says 'I'll still sign the note' this, however, may be enough to blow your objection away.

Another way to look at it is this way. Owner agrees to sell to Buyer. Buyer assigns the contract to Thirdparty. Owner balks. Buyer and Thirdparty could still accomplish substantially the same result by Buyer buying, then immediately reselling to Thirdparty. Assignment just simplifies the process. On the other hand, if Owner is extending credit or expecting a personal service, the result cannot be achieved by the process just described. When this process can't achieve the result, the assignment may also be impermissible.

Most real estate contracts that anticipate an assignment will read 'to buyer or assignee' or 'to buyer or nominee' in the selling clause. Such language is a polite way to put the seller on notice that an assignment is anticipated, but is generally not a requirement.