In Kentucky, can a buyer in a real estate contract assign to a 3rd party without informing the seller?

Question by blowry007: In Kentucky, can a buyer in a real estate contract assign to a 3rd party without informing the seller?
The only assignment clause in the contract specifies that “the parties or . . . their . . . assigns” will be held responsible for the performance of the contract. There is also a clause which states that both parties must be informed in writing and agree to any modification to the contract. The assignment occurred to a person who was unable to qualify for the financing contingency and the seller was not informed until after the orgininal closing date that any assignment had occurred. Does this appear to be a breach of contract? Is an assignment a modification of a contract?

Best answer:

Answer by bostonianinmo
It might not be illegal as far as the agreement between the buyer and seller are concerned, but it damn sure is an illegal “straw man” deal as far as the mortgage lender is concerned. If I were the lender, I’d be threatening legal action against the buyer and the 3rd party and be looking hard at activating any due on sale clause. Straw man agreements like this are bank fraud, pure and simple and can attract prison time.

If the seller was taking back the paper, then he certainly would have cause to activate any due on sale clause and foreclose on the property if payment was’t rendered quickly, along with any other remidies such as fraud complaints, etc.

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