A due-on-sale clause is a clause in a real estate loan agreement (mortgage, deed of trust, or real estate contract) that says the lender can demand full payment of the loan if the property is transferred.
Transfers can include sales, some lease-to-own agreements, transfer of a controlling interest in the entity that owns the property (such as a corporation), some transfers to trusts, and transfers to family or friends.
However, under federal law, lenders are prevented from enforcing a due-on-sale clauses under certain circumstances. Some such circumstances include:
