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    Finance & Mortgages

    Due-on-Sale Clause (Alienation Clause)

    A mortgage clause that lets the lender call the full balance due if the borrower transfers the property without paying off the loan.

    A due-on-sale clause, also called an alienation clause, lets the lender demand full repayment when the borrower sells or transfers the property without the lender's consent. It prevents a buyer from quietly taking over the seller's existing loan.

    It is a specific trigger of the lender's acceleration power, aimed at transfers rather than missed payments.

    On the exam

    If the trigger is sale or transfer of the property, the clause is due-on-sale (alienation), not a general acceleration on default.

    Exam trap

    Do not confuse this with a prepayment penalty. The due-on-sale clause is about transfer; a prepayment penalty is about paying the loan off early.

    Tested in

    Residential Mortgages (9% of the exam)

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    This definition is Florida real estate exam-prep education, not legal, tax, or professional advice. Verify current rules against the official source before relying on them for a real transaction. Back to the full glossary.