Real estate tip

Understanding property abandonment
Abandonment in real estate can be referred to as the act of surrendering a claim to, or interest in, a particular asset.

In some other circles, it is believed to be the permitted withdrawal from a forward contract that is made for the purchase of deliverable securities, and also the act of allowing an option to expire unexercised.

It can also be added that abandonment is, “The surrender, relinquishment, disclaimer, or cession of property or of rights. Voluntary relinquishment of all right, title, claim, and possession, with the intention of not reclaiming it.”

Abandonment in real estate includes both the intention to abandon and the external act by which the intention is carried into effect. In determining whether someone has abandoned property or rights, the intention is the first and paramount object of inquiry, for there can be no abandonment without the intention to abandon.

Abandonment in real estate, however differs from surrender in that surrender requires an agreement, and also forfeiture, because forfeiture may be against the intention of the party alleged to have forfeited the property.

Reasons for abandonment in real estate

Corporations will generally abandon assets or projects that no longer offer any profitability. In most instances, proper legal documents must be filed with authorities and any damages must be recouped.

Abandonment can also occur in forward contracts that permit the purchasers to withdraw from the contract, rather than purchase the deliverable securities.

In many instances, an option may not be worthwhile or profitable to exercise and, therefore, the purchaser of the option will let the option expire without being exercised.

Stories by Babajide Okeowo