- How Much Money Is Needed To Invest In Rental Property?
- Should A Real Estate Investor Get An Agent’s License?
- 5 Big Factors That Affect The Costs Of Renovating Your Home
- SIBOR Hike – What You Can Do With Your Current Loan
- 6 Basic Don’ts Of Real Estate Negotiation Tactics
- Will New Condo Relaunches Trigger The Great Property Sale We Have All Been Waiting For?
- 10 Proximity Amenities That Add Value To Real Estate
- How To Get Personal Loans More Easily With Good Credit
Novation is a used to describe the act of substituting an existing contract with a new one and accepted by all parties involved.
The debt can also be in the form of a debt or obligation.
The most common reason when novation arise is when current tenants assign their lease obligations to a new tenant.
For example, a tenant might have 9 month remaining on the rental agreement but has to move overseas for work purposes. To avoid paying penalties for the breach of the rental contract, a new tenant is assigned the existing lease and terms.
Sometimes landlords controlling whole buildings might also enforce a requirement for all tenants to endorse novation agreements. This effectively replaced the terms of the old agreement with the terms of the new one.
The word novation can also be used in the context of assignment of contracts. Such as in the case of an assumable mortgage.