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Loan Assumption Agreement Template for Hong Kong

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Key Requirements PROMPT example:

Loan Assumption Agreement

"I need a Loan Assumption Agreement to be used in Hong Kong where ABC Properties Limited will take over an existing HKD 50 million property development loan from XYZ Developers Limited, with completion targeted for March 2025 and including provisions for additional security over the development project."

Document background
The Loan Assumption Agreement is a crucial document used when a new borrower wishes to take over the obligations of an existing loan from the original borrower. This type of agreement is commonly used in Hong Kong's dynamic business environment, particularly in real estate transactions, corporate restructurings, and business acquisitions. The agreement must comply with Hong Kong's legal framework, including the Contract Ordinance (Cap. 26) and relevant banking regulations. It typically includes detailed provisions about the outstanding loan amount, payment terms, security arrangements, and conditions precedent for the assumption to take effect. The Loan Assumption Agreement serves to document the three-way relationship between the original lender, original borrower, and assuming borrower, ensuring clear definition of rights, obligations, and liabilities of all parties involved. This document is particularly important in Hong Kong's financial sector, where loan assumptions are common in property transactions and corporate reorganizations.
Suggested Sections

1. Parties: Identifies all parties to the agreement including original lender, original borrower, and assuming borrower

2. Background: Recitals explaining the original loan agreement and the intention to assume the loan

3. Definitions and Interpretation: Defines key terms and establishes interpretation rules for the agreement

4. Assumption of Loan: Core provision detailing the assumption of rights and obligations under the original loan

5. Conditions Precedent: Conditions that must be satisfied before the assumption becomes effective

6. Representations and Warranties: Statements of fact and assurances from the assuming borrower

7. Covenants: Ongoing obligations and commitments of the assuming borrower

8. Original Borrower Release: Terms of release of the original borrower from loan obligations

9. Fees and Expenses: Allocation of costs and fees related to the assumption

10. Notices: Communication procedures between parties

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

12. Execution: Signature blocks and execution requirements

Optional Sections

1. Security Arrangements: Include when the loan is secured by collateral that needs to be transferred or renewed

2. Guarantor Provisions: Required when there are guarantors for the assuming borrower

3. Insurance Requirements: Include when specific insurance must be maintained on collateral

4. Tax Provisions: Include when there are specific tax implications or requirements for the assumption

5. Regulatory Compliance: Include when the assumption requires specific regulatory approvals or compliance

6. Interest Rate Adjustment: Include when the assumption involves changes to interest rate terms

7. Payment Restructuring: Include when payment terms are being modified as part of the assumption

Suggested Schedules

1. Schedule 1 - Original Loan Agreement Details: Copy or summary of the original loan agreement terms

2. Schedule 2 - Outstanding Loan Amount and Payment Schedule: Current loan balance and payment requirements

3. Schedule 3 - Security Details: Description of any security or collateral for the loan

4. Schedule 4 - Conditions Precedent Documents: List of required documents and conditions to be satisfied

5. Schedule 5 - Form of Notices: Template notices required for the assumption process

6. Appendix A - Relevant Consents and Approvals: Copies of required third-party consents and regulatory approvals

7. Appendix B - Due Diligence Documents: List and copies of due diligence documents provided by assuming borrower

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

Banking & Financial Services

Real Estate

Commercial Property

Infrastructure

Manufacturing

Retail

Healthcare

Hospitality

Construction

Energy

Transportation

Technology

Relevant Teams

Legal

Finance

Treasury

Credit Risk

Compliance

Corporate Finance

Loan Administration

Transaction Management

Risk Management

Company Secretarial

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Loan Officer

Credit Manager

Legal Counsel

Compliance Officer

Risk Manager

Corporate Finance Manager

Financial Controller

Banking Relationship Manager

Property Finance Manager

Debt Management Officer

Transaction Manager

Corporate Secretary

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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