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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."
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
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
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
Real Estate
Banking & Financial Services
Mortgage Lending
Property Management
Legal Services
Insurance
Property Development
Commercial Real Estate
Residential Real Estate
Legal
Real Estate
Mortgage Services
Property Management
Financial Services
Compliance
Risk Management
Document Management
Client Relations
Title Services
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
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