Due on Sale Clause
I have a question regarding the due on sale clause. I am especially interested in people that have been working the subject 2 route. I am awaiting Mr. $Cash's book that was purchased a couple of days ago.
Let say that you receive a property through a subject 2 or even through the land trust way. You then land contract that property for some money down to another person. How would you be liable for the land contract if the bank decides to call that loan due. Especially, if you cannot refinance the property. Just trying to do some homework here before I jump in. Thanks all for the help. This a great place to exchange ideas.[ Edited by tbelknap on Date 02/19/2003 ]
Check this site
www.legalwiz.com/dueonsale.htm
Thanks Dandaman. I have already looked at that information before I posted. Not quite the information I am after. I know what can trigger a due on sale clause. What I do not know is if I have a land contract with someone else and the due on sale clause is triggered, what will be my liability with the person whom has a land contract with me. That is if I could not refinance and the property went to foreclosure. I know there must be some type of legal repercussion if I cannot satisfy the land contract by the bank foreclosing on it. Please let me know if this makes sense. It does in my head but maybe not the way I have written it here. Those bloody voices in my head again. J.K.[ Edited by tbelknap on Date 02/19/2003 ]
The issue you will receive responses on is that going into the aggreement all parties understand that for protection of everyone involved that the mortgage stay in place as is. When you get the book, you will definately understand, and that which you dont understand Cash or his team will answer all your questions.
I think the book was the best investment of real estate I have ever made and Cash has lived up to all of what you see of him here and more.
I would wait for the book, read the book and then see if it fills in the puzzle. It did for me.
Bottom line is that when you have the documents in place, if you follow what Cash says, the seller and new buyer will know of the safety and security what we bring to them offers and there is no need to contact the mtg company.
Too much info at this early stage will do you more harm than good. Read up and then ask away!
GL
There are a few good CYA disclosures out there. I think John has one in his book in regards to contract buyers. Point blank is that if you get caught with your pants down when doing a deal and if you can't or if the L/C buyer can't then bring in a partner to save the position.
There is a lot of whoopla about the DOS. There is a chance that it might happen but if you keep your nose clean and maintain a low profile while taking in all the cashflow it sure does make life simple.
Regarding what can happen between you and your contract buyer? Read your agreement. If you have the obligation to pass the deed to them then you have too...but I would consider these addendums that are out there. In the past I have just left them out but in this litigous society....there back in there