A Deed of Sale With Assume Balance is commonly used in Philippine real estate transactions where the seller has an existing mortgage or loan that the buyer agrees to take over. This arrangement can be beneficial for buyers who may not qualify for a new loan or prefer to assume an existing one with potentially favorable terms. The document must comply with Philippine property laws, banking regulations, and local government requirements. It typically includes detailed information about the property, the remaining loan balance, payment terms, and conditions for the transfer. The deed requires careful drafting to protect all parties' interests and often needs the original lender's consent. This document type is particularly relevant in situations where the property has an existing mortgage and both parties agree to transfer both the property and the loan obligations.
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1. Parties: Identification of the Seller and Buyer with complete names, civil status, addresses, and tax identification numbers
2. Background: Recitals establishing the Seller's ownership, existing loan details, and intention to sell with assumption of remaining balance
3. Definitions: Key terms used in the deed including Property, Purchase Price, Assumed Balance, Original Loan Agreement, etc.
4. Property Description: Detailed legal description of the property including location, boundaries, and certificate of title number
5. Sale and Purchase: Core provision establishing the sale and the total purchase price
6. Assumption of Balance: Terms of the balance assumption, including amount, payment terms, and interest rate
7. Payment Terms: Structure of payments, including any down payment and schedule of payments for the assumed balance
8. Representations and Warranties: Seller's warranties regarding property ownership, existing loan status, and authority to sell
9. Obligations of the Parties: Specific duties of both Seller and Buyer in completing the transfer and assumption
10. Transfer of Rights: Provisions for the transfer of ownership rights and responsibilities
11. Taxes and Expenses: Allocation of transfer taxes, registration fees, and other transaction costs
12. Execution Requirements: Formal requirements for deed execution including notarization
1. Lender Consent: Required when the original lender's approval is needed for the assumption of balance
2. Property Inspection: Used when specific property condition terms need to be documented
3. Insurance Requirements: Included when there are specific insurance obligations related to the assumed loan
4. Default Provisions: Detailed terms for handling payment defaults, if not covered in the original loan agreement
5. Spouse Consent: Required when the seller or buyer is married and spousal consent is necessary
6. Special Payment Arrangements: Used when there are non-standard payment terms or conditions
7. Property Management During Transition: Included when there's a gap between sale and full transfer of possession
1. Schedule A - Property Details: Comprehensive technical description of the property including lot plans and boundaries
2. Schedule B - Payment Schedule: Detailed amortization schedule showing payment dates, amounts, and interest calculations
3. Schedule C - Outstanding Balance Details: Breakdown of the remaining loan balance being assumed
4. Schedule D - Property Documents: List of all property-related documents being transferred
5. Appendix 1 - Original Loan Agreement: Copy of the original loan agreement being assumed
6. Appendix 2 - Property Title: Copy of the current property title or TCT
7. Appendix 3 - Tax Clearances: Copies of relevant tax clearances and certificates
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