Land Trust to Reduce Risk of Due on Sale Clause

[Jabbar Adesada]

Hello BP!!

Anyone familiar with how one can use a land trust to gain ownership interest in a property? Pros and Cons? I have been doing research and found something saying by utilizing a land trust one can reduce risk of the due on sale being enacted on them a clause most convenienal mortgages have. I want to partner with someone on a deal where they will be obtaining the loan and I will be bringing forth the money/asset management essentially. Any tips, attorney advised to just quit claim, in spite of the due on sale clause and wanted to see what other options I have. Both of us would be 50:50 on everything

[Bill Exeter]

Hi @Jabbar Adesada, 

Be extremely careful here when attempting to use the Title Holding Trust (Land Trust) as a means to avoid or reduce the risk of triggering the due on sale clause.  When anyone tells you that it can minimize or reduce the risk of the due on sale clause, they have likely crossed over into the "lender fraud" area.  

What they really mean is that the lender will likely never find out, but it does not change the fact that if the lender documents define the due on sale clause to include a transfer of a beneficial interest in the land trust it will trigger the due on sale clause.  You must refer to your loan documents.