In a transfer assumption, who takes over the obligation to make payments?

In a transfer assumption, who takes over the obligation to make payments?

• A. The original lessee continues to pay.
• B. A new party assumes the payments.
• C. The lender waives further payments.
• D. The lessor forgives the debt.

Answer: (B)

Transfer assumption occurs when a new party agrees to take over the obligation to make payments. The new party becomes the responsible borrower or lessee under the contract, and the original party is typically released (if the agreement provides for it). This is exactly what “assumes the payments” means—the obligation is transferred to someone else who will now make the payments. The other scenarios don’t fit because they keep the same debtor paying, or they simply waive or forgive the payments rather than transferring the obligation to a new party.

Transfer assumption occurs when a new party agrees to take over the obligation to make payments. The new party becomes the responsible borrower or lessee under the contract, and the original party is typically released (if the agreement provides for it). This is exactly what “assumes the payments” means—the obligation is transferred to someone else who will now make the payments. The other scenarios don’t fit because they keep the same debtor paying, or they simply waive or forgive the payments rather than transferring the obligation to a new party.