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Assumption Agreement (Real Estate) Template for Canada

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Key Requirements PROMPT example:

Assumption Agreement (Real Estate)

"I need a Real Estate Assumption Agreement for a residential property in Ontario, where my client is taking over an existing mortgage from their parents, with the assumption to be effective March 1, 2025, and the property includes a rental basement unit."

Document background
The Assumption Agreement (Real Estate) is a crucial document in Canadian real estate transactions where an existing mortgage is transferred from one party to another. This agreement is commonly used in property sales where the buyer takes over the seller's existing mortgage instead of obtaining new financing, or in situations involving property transfers between related parties. The document must comply with Canadian federal banking regulations and provincial real estate laws, requiring careful consideration of mortgage terms, property details, and lender requirements. It includes comprehensive details about the original mortgage, property information, parties involved, and specific conditions for the assumption. The agreement is particularly important in markets with favorable existing mortgage terms or when maintaining current financing arrangements is advantageous. It requires lender approval and typically involves legal review to ensure compliance with all applicable regulations.
Suggested Sections

1. Parties: Identification of all parties: Original Borrower (Assignor), Assuming Party (Assignee), and Lender

2. Background: Context of the original mortgage, property details, and reason for assumption

3. Definitions: Key terms used throughout the agreement including Property, Mortgage, Assumption Date, etc.

4. Assumption of Mortgage: Core terms of the assumption, including the assuming party's agreement to take over all mortgage obligations

5. Original Mortgage Details: Summary of the key terms of the original mortgage being assumed

6. Representations and Warranties: Statements of fact and assurances from both original borrower and assuming party

7. Conditions Precedent: Conditions that must be met before the assumption becomes effective

8. Lender's Consent: Acknowledgment and approval of the assumption by the lender

9. Release of Original Borrower: Terms of release for the original borrower from mortgage obligations

10. Fees and Expenses: Allocation of costs related to the assumption process

11. Governing Law: Specification of applicable Canadian jurisdiction

12. Notice Provisions: Contact information and methods for formal communications

13. Execution: Signature blocks and execution requirements

Optional Sections

1. Property Management Provisions: Required when the property is income-generating or has existing tenant arrangements

2. Insurance Requirements: Detailed insurance obligations when specific coverage is required beyond standard mortgage requirements

3. Environmental Representations: Required for commercial properties or when environmental concerns exist

4. Co-Signer Provisions: Include when there are additional guarantors or co-signers for the assumption

5. Pre-Payment Terms: Include when specific pre-payment privileges are being transferred or modified

6. Property Tax Arrangements: Required when there are special tax payment arrangements or outstanding issues

7. Mortgage Insurance Provisions: Include when CMHC or other mortgage insurance is involved

Suggested Schedules

1. Schedule A - Property Description: Legal description of the property and any included fixtures or improvements

2. Schedule B - Original Mortgage: Copy or summary of the original mortgage agreement being assumed

3. Schedule C - Current Mortgage Statement: Statement showing current balance, payment terms, and status of the mortgage

4. Schedule D - Property Tax Statement: Current status of property tax payments and any arrangements

5. Schedule E - Lender's Approval Requirements: Specific conditions required by the lender for approval of the assumption

6. Appendix 1 - Due Diligence Documents: List of required documents and confirmations for the assumption process

7. Appendix 2 - Payment Instructions: Details of payment arrangements and banking information for mortgage payments

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions






























Clauses




























Relevant Industries

Real Estate

Banking & Financial Services

Mortgage Lending

Property Management

Legal Services

Insurance

Property Development

Commercial Real Estate

Residential Real Estate

Relevant Teams

Legal

Real Estate

Mortgage Services

Property Management

Financial Services

Compliance

Risk Management

Document Management

Client Relations

Title Services

Relevant Roles

Real Estate Lawyer

Mortgage Specialist

Property Manager

Real Estate Agent

Banking Officer

Mortgage Broker

Legal Counsel

Real Estate Partner

Conveyancing Lawyer

Property Administrator

Loan Officer

Compliance Officer

Real Estate Paralegal

Title Officer

Financial Advisor

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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