Mortgage Assumption Agreement Template for Hong Kong

The Mortgage Assumption Agreement is a critical document used in Hong Kong property transactions when one party wishes to take over the mortgage obligations of another. This document is essential when dealing with property transfers where the existing mortgage will not be discharged but rather transferred to a new borrower. It must comply with Hong Kong's stringent property and banking regulations, including requirements under the Conveyancing and Property Ordinance and Banking Ordinance. The agreement details the terms of assumption, including the property specifications, outstanding mortgage amount, payment terms, and the rights and obligations of all parties. It requires explicit lender consent and may include specific conditions or requirements set by the lending institution. The document is particularly relevant in situations such as property sales where the buyer wishes to assume an existing mortgage, family transfers, or corporate restructuring involving mortgaged properties.

1. Parties: Identifies and defines all parties to the agreement: Original Borrower, Assuming Party, and Lender

2. Background: Recitals explaining the existing mortgage, the property details, and the intention to transfer the mortgage obligations

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

4. Assumption of Mortgage: Core provision detailing the assuming party's agreement to take over the mortgage obligations

5. Lender's Consent: Explicit consent from the lender for the mortgage assumption and any conditions attached

6. Original Borrower's Representations: Warranties regarding the current status of the mortgage, payments, and property

7. Assuming Party's Representations: Warranties regarding financial capacity and commitment to fulfill mortgage obligations

8. Transfer of Rights and Obligations: Detailed provisions on the transfer of all mortgage-related rights and responsibilities

9. Effective Date and Conditions Precedent: Specifies when the assumption takes effect and any conditions that must be met

10. Fees and Costs: Allocation of transfer fees, legal costs, and other expenses related to the assumption

11. Governing Law and Jurisdiction: Specifies Hong Kong law as governing law and jurisdiction for disputes