[WSBAPT] Due on sale clauses

[John McCrady]

I think that Garn- St. Germain is the act you are thinking about ( 12 US Code 1701j-3 section d)
Here is an excerpt
With respect to a real property loan<https://www.law.cornell.edu/definitions/uscode.php?width=840&height=800&iframe=true&def_id=12-USC-1202940583-2124459218&term_occur=999&term_src=title:12:chapter:13:section:1701j%E2%80%933> secured by a lien on residential real property containing less than five dwelling units, including a lien on the stock allocated to a dwelling unit in a cooperative housing corporation, or on a residential manufactured home<https://www.law.cornell.edu/definitions/uscode.php?width=840&height=800&iframe=true&def_id=12-USC-2070006528-2124459219&term_occur=999&term_src=title:12:chapter:13:section:1701j%E2%80%933>, a lender <https://www.law.cornell.edu/definitions/uscode.php?width=840&height=800&iframe=true&def_id=12-USC-1106367012-2124459217&term_occur=999&term_src=title:12:chapter:13:section:1701j%E2%80%933> may not exercise its option pursuant to a due-on-sale clause <https://www.law.cornell.edu/definitions/uscode.php?width=840&height=800&iframe=true&def_id=12-USC-2106257779-2124459216&term_occur=999&term_src=title:12:chapter:13:section:1701j%E2%80%933> upon-...............
(6)
a transfer where the spouse or children of the borrower become an owner<https://www.law.cornell.edu/definitions/uscode.php?width=840&height=800&iframe=true&def_id=12-USC-106164915-1510435011&term_occur=999&term_src=title:12:chapter:13:section:1701j%E2%80%933> of the property;


John McCrady
Counsel
Puget Sound Title Company
5350 Orchard Street West
University Place WA 98467
253-476-5721
j.mccrady at pstitle.com<mailto:j.mccrady at pstitle.com>



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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Kerry Richards
Sent: Monday, July 25, 2022 10:55 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Due on sale clauses

Dear Listmates:
I am working on a property settlement agreement emanating from a CIR (Committed Intimate Relationship) and am concerned about the effect of one party deciding to provide his 49% share of the house to an irrevocable trust naming the children as beneficiaries. Will that trigger the mortgage company's due on sale clause or is this transaction protected like a dissolution Property Settlement Agreement under the Statutory protections of that statute which I cannot fully remember the name of? Something like Garman St. German or so.
Can someone offer their opinion please?
Yours truly,
Kerry A Richards
Krichards at lawgate.net<mailto:Krichards at lawgate.net>
206.617.2119

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