[WSBARP] Due on Sale Clauses and Real Estate Contracts

[Paul Neumiller]

I agree. The Client is not going to hide the transaction from the first lien holder.  I am inquiring if a lender will allow a Real Estate Contract.


Sent from my T-Mobile 5G Device
Get Outlook for Android<https://aka.ms/AAb9ysg>
________________________________
From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> on behalf of Nestor Gorfinkel <nestor at GlcLawyer.com>
Sent: Thursday, December 7, 2023 6:33:53 AM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] Due on Sale Clauses and Real Estate Contracts


The problem arises is how does the property appraiser and tax collector deal with the real estate contract. When recorded, do their records reflect the contract vendor or vendee. If they make the change and a tax bill is issued in the name of the vendee/purchaser, when the Lender verifies the payment of the property taxes, they can then move to enforce the due on sale clause. Also, regarding property insurance. Whose name will appear on the property insurance? The change in name can also alert the Lender.



Be careful.



Cordially,



Nestor Gorfinkel, Attorney at Law

Licensed in Florida & Washington State

Florida Civil-Law (International) Notary



[cid:image002.jpg at 01DA28F0.7D57F770]



ATTENTION - This e-mail message and any attachment to this e-mail message may contain confidential information that is legally privileged. If you are not the intended recipient, you must not review, retransmit, convert to hard copy, copy, use or disseminate this e-mail or any attachments to it. If you have received this e-mail in error, please notify us immediately by return e-mail or by telephone at the phone numbers provided herein and delete this message. Please note that if this e-mail message contains a forwarded message or is a reply to a prior message, some or all of the contents of this message or any attachments may not have been produced by the sender.



P Please consider the environment before printing this e-mail.









From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Paul Neumiller
Sent: Wednesday, December 6, 2023 7:02 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: [WSBARP] Due on Sale Clauses and Real Estate Contracts



What is the experience of people under this scenario (and I know I need to read the loan documents)?  Client wants to buy commercial property with an existing first lien.  Client doesn’t have the money to pay off the first lien but the seller is willing to carry the balance financing.  Parties contemplate that the Client will pay both the existing loan and the seller carryback loan.  Title company is suggesting that a Real Estate Contract might be able to get around the Due on Sale Clause in the existing loan because title does not vest in the Client/Buyer until the financing is paid in full.  This doesn’t quite pass the smell test for me.  In this age of rising interest rates (or, at least, higher interest rates), are lenders really not calling in their loans under the standard Due on Sale Clause if the parties use a Real Estate Contract?  What is the experience of the title companies?





[cid:image003.jpg at 01DA28F0.7D57F770]


-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20231207/6282b1df/attachment-0001.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image002.jpg
Type: image/jpeg
Size: 731986 bytes
Desc: image002.jpg
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20231207/6282b1df/image002-0001.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image003.jpg
Type: image/jpeg
Size: 14264 bytes
Desc: image003.jpg
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20231207/6282b1df/image003-0001.jpg>