Assumption Agreements in Florida
An assumption agreement is a contract in which one party expressly agrees to take over the obligations of another party under an existing agreement. In Florida, assumptions are used in mortgage transfers, business acquisitions, and lease assignments to formally bind the new party to existing obligations.
Common Applications
Florida assumption agreements appear in mortgage assumptions (where the buyer takes over the seller's existing loan), business acquisitions (where the buyer assumes designated contracts), and lease transfers (where the assignee assumes the tenant's obligations). The assumption agreement is typically part of a larger transaction document, such as an asset purchase agreement or assignment agreement.
Release and Novation
A critical distinction in Florida law is that assumption does not equal release. The original obligor remains liable unless the third party consents to a novation. This means the obligee has recourse against both the original party and the assuming party, providing enhanced security. Parties seeking a clean break must negotiate a separate release or novation agreement.
Related Terms
Barnes Walker Business Law
Barnes Walker structures assumption agreements for Florida business transactions. Contact us for contract guidance.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC