13 Consent to novation

In a lending arrangement the borrower has to be a party to the novation process although it will usually be the case that the express terms of the loan agreement provide that the borrowers consent is not required for the novation to take effect. In the normal course, the documentation required to effect a novation of loan depends on the provisions in the loan agreement.
However most loan agreements (including the APLMA and LMA recommended form) will have a transfer certificate attached as a schedule that operates by way of novation. There is also a provision in the loan agreement where all parties (including the borrower) agree that provided the other conditions to any transfer set out in the loan agreement are complied with the borrower consents to the novation effected by the execution of the transfer certificate.