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Professional Standards Manual

Trading Services

4. General Information

(a) Contract Clauses - View Entire Section

(XVII) Financing Information - View Subsection
(5) Refinance of Existing Mortgage

Under certain circumstances, a substantial payout penalty may be avoided by the buyer arranging a new mortgage through the existing mortgagee.

Refinancing with Existing Mortgagee Clause

Subject to the Buyer arranging financing with (name of existing mortgagee) and to (name of existing mortgagee) providing the Seller with written confirmation on or before (date), that upon completion the Seller shall be released, without penalty or cost, from its covenants under the existing mortgage.

This condition is for the benefit of the Seller and the Buyer.

CAUTION: This clause is to be used only in conjunction with the ‘‘New First Mortgage Clause’’ detailing the mortgage to be arranged by the Buyer.

Such a clause should be reviewed by the seller’s lawyer.