When an individual purchases a property that already has a mortgage or loan, they may choose to assume the responsibility of making the loan payments. This implies that they are acquiring the property “subject to” the existing debt. In the event that they fail to make the payments, the original borrower remains liable, but the lender has the right to foreclose on the property, potentially resulting in the new owner losing it. It is important to note that this is distinct from “assuming” the loan, which necessitates approval from the lender.
The term “subject to” pertains to the acquisition of ownership of a real property that already has a mortgage or deed of trust. In this scenario, the new owner agrees to take on the responsibility of continuing to make payments on the promissory note secured by the mortgage or deed of trust. For instance, if John purchases a house from Jane subject to the existing mortgage, John becomes the new owner of the property and is accountable for making the mortgage payments. However, if John fails to make the payments, Jane remains liable for the payment, but the holder of the mortgage or beneficiary of the deed of trust may foreclose, and John could lose ownership. This is different from “assuming” the mortgage or deed of trust by a written transfer of the obligation, which requires the lender’s approval since the new owner’s creditworthiness may not be as strong as the original owner/borrower’s. In summary, “subject to” means that the new owner assumes the responsibility of paying the existing mortgage or deed of trust, but the original debtor remains liable if the new owner defaults on payments.
“Subject to” refers to a legal concept where a party agrees to be bound by certain conditions or terms outlined in a contract or agreement.
Yes, a contract can be subject to multiple conditions as long as all parties involved agree to them and they are clearly stated in the contract.
If a party fails to meet the conditions subject to the contract, it may be considered a breach of contract, and the non-breaching party may have legal remedies available, such as seeking damages or specific performance.
In general, it is advisable to include all conditions explicitly in the contract. However, if both parties agree to additional conditions outside the contract, they may be enforceable if they can be proven to be part of the overall agreement.
No, a contract cannot be subject to conditions that are illegal or against public policy. Such conditions would be considered void and unenforceable.
If a condition is impossible to fulfill, it may be considered a “frustration of purpose” and could potentially render the contract void. However, this would depend on the specific circumstances and applicable laws.
While it is generally recommended to have clear and unambiguous conditions in a contract, if a condition is open to interpretation, it may be subject to negotiation or potential disputes between the parties involved.
Yes, a contract can be subject to time-sensitive conditions, such as deadlines for performance or completion. Failure to meet these conditions within the specified time frame may result in consequences outlined in the contract.
Yes, a contract can be subject to conditions that can be modified or waived by mutual agreement between the parties involved. However, any modifications or waivers should be properly documented and agreed upon in writing.
Yes, a contract can be subject to conditions that are specific to certain events or circumstances. These conditions may outline how the contract will be affected or terminated if such events or circumstances occur.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
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