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Loan Assumption Agreement for Malta

Loan Assumption Agreement Template for Malta

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Loan Assumption Agreement

"I need a Loan Assumption Agreement under Maltese law for a commercial property purchase, where my company will take over an existing 鈧2.5M loan from the current property owner, with the assumption planned for March 2025 and HSBC Malta as the lender."

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Loan Assumption Agreement

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What is a Loan Assumption Agreement?

The Loan Assumption Agreement is utilized when a party wishes to take over the existing loan obligations of another party, commonly occurring in property transactions, corporate restructurings, or business acquisitions. This document, governed by Maltese law, requires careful consideration of the Banking Act (Chapter 371), Civil Code provisions, and financial services regulations. The agreement typically includes detailed provisions about the assumed debt, payment terms, security arrangements, and any conditions precedent. It's essential for documenting the three-way relationship between the lender, original borrower, and assuming party, ensuring all parties' rights and obligations are clearly defined. The document must address specific Maltese legal requirements regarding loan transfers, security interests, and banking regulations.

What sections should be included in a Loan Assumption Agreement?

1. Parties: Identifies the three main parties: Lender, Original Borrower, and Assuming Party

2. Background: Recitals explaining the original loan agreement, current status, and intention to transfer obligations

3. Definitions: Defines key terms including Original Loan Agreement, Assumed Obligations, Effective Date, and Security Documents

4. Assumption of Obligations: Details the assuming party's acceptance of the loan obligations and terms

5. Release of Original Borrower: Specifies the extent and terms of the original borrower's release from obligations

6. Representations and Warranties: Statements from the assuming party regarding their capacity and ability to assume the loan

7. Lender's Consent: Explicit consent of the lender to the assumption and any conditions attached

8. Continuation of Security: Confirmation that existing security arrangements remain in effect

9. Payments and Interest: Confirms payment terms, interest rates, and payment mechanisms

10. Governing Law and Jurisdiction: Specifies Maltese law as governing law and relevant jurisdiction

11. Notices: Contact details and methods for formal communications between parties

12. Execution: Signature blocks for all parties

What sections are optional to include in a Loan Assumption Agreement?

1. Additional Security Arrangements: Used when new security or guarantees are being provided by the assuming party

2. Conditions Precedent: Include when specific conditions must be met before the assumption becomes effective

3. Fees and Expenses: Include when there are specific arrangements about who bears the costs of the assumption

4. Tax Provisions: Required when specific tax implications need to be addressed

5. Guarantor Provisions: Include when there are third-party guarantors involved

6. Due Diligence Confirmation: Used when specific due diligence requirements need to be documented

7. Regulatory Compliance: Include when specific regulatory requirements need to be addressed

What schedules should be included in a Loan Assumption Agreement?

1. Original Loan Agreement Details: Summary or copy of the original loan agreement terms being assumed

2. Outstanding Loan Amount and Payment Schedule: Detailed breakdown of the remaining loan balance and payment schedule

3. Security Details: List and details of all security arrangements continuing or being created

4. Existing Charges and Encumbrances: Details of any existing charges or encumbrances affecting the loan or security

5. Conditions Precedent Checklist: List of conditions to be satisfied before the assumption becomes effective

6. Form of Notice to Third Parties: Template notices required to be sent to relevant third parties

Authors

Alex Denne

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

Relevant legal definitions
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Relevant Industries

Banking

Financial Services

Real Estate

Corporate Finance

Construction

Commercial Property

Asset Management

Investment Banking

Private Equity

Project Finance

Relevant Teams

Legal

Finance

Treasury

Credit

Risk Management

Compliance

Corporate Banking

Loan Administration

Transaction Management

Documentation

Relevant Roles

Legal Counsel

Finance Director

Chief Financial Officer

Banking Manager

Credit Manager

Risk Manager

Compliance Officer

Corporate Lawyer

Financial Controller

Treasury Manager

Debt Manager

Portfolio Manager

Transaction Manager

Legal Director

Company Secretary

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