The Due on Sale clause (DOS)

[Tom Gimer]

This issue gets mentioned a lot on this site.

Here is the "standard" DOS clause :

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18. Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 18, “Interest in the Property” means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests transferred in a bond for deed, contract for deed, installment sales contract or escrow agreement, the intent of which is the transfer of title by Borrower at a future date to a purchaser.

If all or any part of the Property or any Interest in the Property is sold or transferred (or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender’s prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law.

If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower.

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If you want to transfer property subject to such a clause to your wholly-owned LLC, get the lender's consent in advance. Depending on the lender, this could be a mere formality.

Otherwise, it's pretty clear what the lender's rights and responsibilities are.

Someone earlier today said "just transfer the property back to yourself." Kinda tough to do if the LLC has more than one member and the partners at that point are not in agreement.

Food for thought.