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Real Estate transfer question

My neighbor wants to tranfer a rental property back to her parents that her parents bought for her five years ago. The reason is that she would like to free herself from the liability of the mortgage. Her parents are willing to take it back and assume the outstanding balance.

Should there be a purchase and sale agreement as the bank is requesting them to do. I thought it should have been a simple morgage assumption.

Anyone with any experience / knowledge on this type of a transaction?

What are the implications for Canadian Capital gains tax?
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