Wholesale Legal Question Florida (Assignment Contract)

[Luis Davila]

Ok BiggerPockets hopefully someone can help me out with some advice or least a suggestion. I recently wholesaled a property in Mascotte, FL. The purchase price was for $85k and I made a $13k assignment fee making the Total investment $98k. Now months later, my end buyer discovered material adverse facts on the title to the property (that I was not mad aware of by the seller) and ultimately my end buyer was not able to take possession of the property after closing. My end buyer is suing the seller because of this. I am not sure how this was not caught during the title search. So long story short my end buyer claimed the title insurance and was able to recuperate the $85k purchase price from the title insurance, but is also seeking I pay him the assignment fee back to him or he will file a lawsuit against me. Keep in mind, he willingly signed the assignment contract. Do I have any legal rights? 

[Wayne Brooks]

Part depends on the Exact language of your assignment contract, and how a judge would view the overall “intent” of the agreement.  Most assignment contracts call for the return of the fee if the buyer can’t close due to title issues....but a judge would probably rule that way even if it wasn’t specifically stated.  The largest risk for you is you likely violated FL licensing in the marketing of your wholesale deal. No, it doesn’t matter that you’re licensed because I assume you did not do this deal through your broker, which your license limits you to doing....in order for you to be “acting as an agent”. If this guys files a complaint with the state board, or if it gets reported as part of any law suit, you’ll have problems.