Do lease options trigger due on sale?

Posted in Creative Real Estate Discussions
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  • Donna Ross
    February 2, 2010 at 9:39 am
    Donna Ross

    I am prepping a long term lease option: 8 years…has anyone ever heard of that causing a triggering of due on sale clause in underlying 1st TD?
    I plan to record it..

    thk you for any guidance.
    D

    DON WEDE
    February 3, 2010 at 5:02 am
    DON WEDE

    Though most due on sales do not specify a lease I believe if it is over 60 months it is deemed a security agreement and could trigger the due one sale.
    For a practical matter I do not worry if the deal makes sense. I would not record the lease option. I might record a memorandum of option that does not divulge all of the terms.

    Don Wede

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