nominee agreement ( for real estate purchase)
In a nominee agreement, the owner conveys property to a nominee who the latter consents to hold and execute transactions on behalf of the owner. The purpose of the agreement is to outline for legal purposes the ownership of the property and the role of the nominee.
For legal purposes, a nominee agreement represents an arrangement in which the owner registers the property in the name of a nominee so that the latter legally holds the property and all the rights related to it such as mortgages, interests, easements, licenses, leases, by-laws and charges. Unlike the owner, the nominee has no beneficial interest in the property.
The nominee cannot make decisions about the property without the express and written authorization of the owner. For many standard agreements, the nominee can only perform, or execute, certain instruments according to the authority outlined in the agreement. This includes performing and/or delivering the following types of documents: leases, deeds, transfers, assignments, contracts and other documents related to the property.
Anonymous Purchase of Real Estate
Question: How can a buyer purchase a property and remain anonymous?
Response: Contracts must identify a buyer against whom the contract can be enforced. Yet sometimes buyers seek to remain anonymous. For example, Joe Developer wants to assemble contiguous lots in downtown Denver on which to build a new skyscraper. Mary seeks to buy neighbor’s house (with whom she has been feuding for years) to cut down the tree that blocks Mary’s view. Joe seeks to remain anonymous to avoid creating leverage for the holdout sellers. Mary wants to remain anonymous because the neighbor won’t sell to Mary, or because her neighbors would charge Mary a premium.
The solution is for the “Principal,” the buyer who wishes to remain anonymous, to purchase the property through a nominee. There are two basic structures for nominee transactions. In one, the nominee enters into a contract to buy the property and then assigns the contract to the Principal, and the Principal, not the nominee, closes on the purchase (“pre-closing assignment”). With the other structure, the nominee takes title to the property and later conveys it to the Principal (“post closing transfer”).
This Agreement was made on ____________ between ___________ of ___________ (“Nominee”) and ________________ of ___________________ (the “Owner”).
Whereas Owner is the sole beneficial owner of the land described in Exhibit 1 to this Agreement, including all buildings and other fixed improvements thereon and all interests therein and rights appurtenant thereto;
AND it has been agreed between Nominee and Owner, at the request of Owner and as a matter of convenience, that for the time being the said land will be registered in the name of Nominee and that Nominee shall hold, as nominee for Owner on the terms and subject to the conditions hereinafter set forth, the said land and all related rights and interests (including without limitation those under agreements and other documents such as mortgages, charges, easements, leases, licenses and by-laws) that Owner may from time to time assign to Nominee (such land and related rights and interest are collectively called the “Real Property”), Nominee having itself no beneficial interest in the Real Property;
NOW in consideration of these premises and the mutual covenants, conditions and agreements herein contained, and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto hereby covenant and agree as follows:
1. Nominee hereby acknowledges, declares, covenants and agrees that:
(a) Nominee will hold, as and from the date hereof, the Real Property, and all right, title and interest therein and benefit to be derived therefrom, as nominee for and on behalf of the Owner;
(b) Nominee otherwise has no legal or beneficial interest in the Real Property; and
(c) All other attributes of the beneficial ownership of the Real Property shall be and remain in Owner.
2. Nominee covenants and agrees, subject to the indemnity hereinafter provided, that it shall at all times and from time to time deal with the Real Property as nominee for Owner only in accordance with the written or verbal instructions and directions of Owner and not otherwise; and that it will do no act relating to the Real Property without the express authorization and direction of Owner, and that it has no active or independent duties to perform in respect of the Real Property except as may be specifically provided for herein.
3. Nominee shall enter into, and execute and deliver as nominee for Owner only, all such instruments, including, without limitation, all such documents, assignments, deeds, transfers, leases, subleases, assignments and surrenders of leases, mortgages, charges, hypothecs, servitudes, easements, licenses, privileges, management contracts, personal property security contracts and other agreements, (collectively called “instruments’) as may from time to time be requested by Owner in connection with the Real Property, including without limiting the generality of the foregoing a conveyance and transfer in registrable and/or other form(s) of all right, title and interest of Nominee in the Real Property.
4. Nominee acknowledges, declares, covenants and agrees that all rents, profits, emoluments and other receipts and revenues of any nature or kind arising from the Real Property or the use thereof shall belong legally and beneficially to Owner, and that Nominee has no legal or beneficial interest in such rents, profits, emoluments and other receipts and revenues. Nominee shall, subject to the rights of any mortgagee or other secured creditor, promptly remit to Owner all rents, profits, emoluments and other receipt and revenues of any nature or kind arising from the Real Property, which may be received by Nominee as nominal party to any instrument. Nominee shall incur no liability to any person for making any such remittance as directed in any notice from any such mortgagee or other secured creditor, or, in the absence of such notice, pursuant to a direction from Owner. Nominee shall, at the request and expense of Owner, account to Owner for all sums received with respect to the Real Property.
5. Nominee shall promptly deliver to Owner all instruments with respect to the Real Property, together with all recording information relative thereto, to the extent that Nominee may come into possession of any thereof.
6. Nominee shall promptly transmit to Owner copies of all notices, claims, demands or other communications, which Nominee may receive and which relate in any way to the Real Property. Nominee, upon the request of Owner, shall be a nominal party to any action in response to or as a consequence of any such matter. Any such action, proceeding, negotiation or other response shall be conducted by Owner, with counsel selected by him, and Nominee shall not, nor shall it be obligated to, take any such action itself, its only obligation being that of a nominal party thereto subject to the indemnity hereinafter provided.
| Jacek Kloskowski|
Local time: 09:52
Works in field
Native speaker of: Polish, English
PRO pts in category: 43