Assignment of Claims, Not Assignment of Rights

By Richard G. Erickson and Matthew Racioppo¹

In September of 2025, the Arizona Supreme Court held that an anti-assignment clause in the sale of a home between the builder and buyer did not prohibit the assignment of claims arising from that contract. Specifically, the Court sought to answer whether a clause that precludes a homeowner from assigning their rights under a purchase agreement also prevents the homeowner from assigning a breach of implied warranty claim to a homeowners’ association (HOA).

In Pointe 16, Community Association v. GTIS-HOV Pointe 16, LLC, et al., a majority of homeowners in a subdivision assigned their claims against the Defendant builder for construction defects to the HOA. The HOA brought suit against the builder for these claimed defects and the Defendant prevailed in the lower courts. These courts found that the anti-assignment clause included in each of the homeowners’ purchase agreements prohibited the homeowners from assigning these claims to the HOA. This clause specifically provided that the “Agreement and the rights of the Buyer hereunder may not be assigned or transferred by Buyer…without first obtaining Seller’s written consent…”

Reiterating the current principles of Arizona law regarding the ability to assign unliquidated claims, the Court made clear that (1) claims are generally assignable when not involving personal injury, (2) the legislature retains the ability to determine whether particular claims are assignable, and (3) that public-policy considerations ought to provide guidance to courts in deciding whether to depart from the general rule. These general principles demonstrate that breach-of-contract claims, including the implied warranty of workmanship and habitability, are generally assignable. However, parties may generally contract away the ability to assign rights and claims.

In deciding whether the language of this anti-assignment clause prohibited the assignment of accrued claims for damages, the Court examined the intent of the parties, as made clear by the prefatory language of the anti-assignment clause. However, the Court ultimately focused on the language of the anti-assignment clause and found notable that the language did not reference claims, only rights under the contract. Resting on this distinction, the Court held that the anti-assignment clause did not prohibit the assignment of the claims to the HOA.

The Court also heard arguments on an important secondary issue: whether the anti-assignment clause precluded the homeowners from assigning their claims against non-parties to the purchase agreement. The resolution of the general assignment issue left this secondary issue moot. Therefore, this issue remains unresolved for now.

While the holding of this case may appear simple, its ramifications for assignment provisions could be profound. Countless anti-assignment provisions may now provide far fewer protections than previously intended. Further, those wishing to prohibit assignments of claims in their purchase agreements must now be precise in the language of their provisions, explicitly providing that claims arising under the agreement may not be assigned.