Because a due‑on‑sale clause is contractual, a lender does not need to show harm, default, or bad faith to enforce it.
If an unapproved transfer occurs, the lender may accelerate the loan based solely on that fact. A lender’s decision not to enforce the clause immediately does not eliminate the right to enforce it later.
For related posts and primary authority, see: Due‑on‑Sale Clause.
Hani Sarji
New York lawyer who cares about people, is fascinated by technology, and is writing his next book, Estate of Confusion: New York.
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