Subordination Agreement Mortgage Template for Singapore

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Key Requirements PROMPT example:

Subordination Agreement Mortgage

"Need a Subordination Agreement Mortgage under Singapore law for a commercial property where DBS Bank is the senior lender with first-ranking security, and we need to subordinate a new second mortgage from OCBC Bank for additional financing of SGD 2 million, to be completed by March 2025."

What is a Subordination Agreement Mortgage?

A Subordination Agreement Mortgage is essential in Singapore's property financing landscape where multiple lenders have security interests in the same property. This document is typically used when a property owner has multiple loans secured against their property, and the lenders need to establish a clear order of priority for their security interests. The agreement ensures that the senior lender's rights take precedence over junior lenders in terms of payment and enforcement. Under Singapore law, this agreement must comply with the Conveyancing and Law of Property Act, Land Titles Act, and relevant MAS regulations. It's particularly important in refinancing situations or when additional financing is sought against an already mortgaged property.

What sections should be included in a Subordination Agreement Mortgage?

1. Parties: Details of Senior Lender, Junior Lender, and Borrower

2. Background: Explains existing loans, security arrangements, and reason for subordination

3. Definitions: Key terms including Senior Debt, Junior Debt, Security Documents

4. Subordination Terms: Core provisions establishing priority of security interests

5. Payments and Enforcement: Rules regarding payments and enforcement rights

6. Duration: Term of the subordination arrangement

7. Governing Law: Specification of Singapore law as governing law

What sections are optional to include in a Subordination Agreement Mortgage?

1. Turnover Provisions: Rules for handling payments received in violation of priority

2. Standstill Provisions: Restrictions on junior lender's enforcement actions

3. Additional Security: Provisions for future security arrangements

What schedules should be included in a Subordination Agreement Mortgage?

1. Schedule 1 - Existing Security Documents: List of all existing security documents and their details

2. Schedule 2 - Form of Notice: Template for notices required under the agreement

3. Schedule 3 - Property Details: Details of mortgaged property and title particulars

4. Appendix A - Existing Loan Details: Summary of senior and junior loan terms

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Industries

Conveyancing and Law of Property Act: Primary legislation governing property transactions and mortgages in Singapore (Cap. 61), which sets out the fundamental rules for creating and enforcing security interests in real property

Land Titles Act: Key legislation (Cap. 157) that governs the registration and transfer of land titles in Singapore, including the registration of mortgages and subordination agreements

Housing and Development Act: Legislation governing HDB properties, which may be relevant if the mortgaged property is public housing

Banking Act: Legislation (Cap. 19) that regulates banking institutions and their lending practices, including mortgage lending

Moneylenders Act: Legislation governing non-bank lenders and their lending practices in Singapore

MAS Guidelines: Regulatory guidelines issued by the Monetary Authority of Singapore regarding mortgage lending practices and requirements

TDSR Framework: Total Debt Servicing Ratio framework that limits the portion of a borrower's gross monthly income that can go towards repaying all monthly debt obligations

MSR Requirements: Mortgage Servicing Ratio requirements that limit the portion of a borrower's gross monthly income that can go towards repaying all monthly mortgage obligations

Singapore Contract Law: Common law principles governing contract formation, validity, and enforcement in Singapore

Equitable Principles: Legal principles relating to mortgages and priorities in property law, including the doctrine of contractual subordination

SLA Registration Requirements: Singapore Land Authority requirements for the registration and lodgment of mortgage and subordination documents

PDPA: Personal Data Protection Act governing the collection, use, and disclosure of personal data in Singapore

AML Regulations: Anti-money laundering regulations that must be considered in property transactions and mortgage agreements

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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