Due-On-Sale Provision | Practical Law

Due-On-Sale Provision | Practical Law

Due-On-Sale Provision

Due-On-Sale Provision

Practical Law Glossary Item 3-502-2335 (Approx. 2 pages)

Glossary

Due-On-Sale Provision

A provision in a promissory note, loan or mortgage that allows the lender to demand payment of the full balance owed when the borrower sells or transfers real property used as security. This kind of clause is standard in mortgages executed in the US. However, major statutory exceptions to these provisions exist where a borrower transfers property to a trust to which the borrower is a beneficiary.