Due On Sale Clause

Provision in a mortgage or deed of trust calling for the total payoff of the loan balance in the event of a sale or transfer of title to the secured real property. A contract provision which authorizes the lender at its option to declare immediately due and payable sums secured by the lender’s security instrument upon a sale of transfer of all or any part of the real property securing the loan without the lender’s prior written consent. For purposes of this definition a sale or transfer means the conveyance of real property of any right title or interest therein whether legal or equitable whether voluntary or involuntary by outright sale deed installment sale contract land contract contract for deed leasehold interest with a term greater than three years lease-option contractor any other method of conveyance of real property interests. Standard language which states that the loan must be paid when a house is sold.

Due-On-Sale Clause
An acceleration clause granting the lender the right to demand full payment of the loan upon a sale of the property.