What is a deed of trust with a due-on-sale clause?

A deed of trust with a due-on-sale clause is a legal document used in the state of South Dakota to secure payment of a debt from a buyer of real estate. The document is made between the borrower (the buyer) and the lender (the bank or other lender, often referred to as the trustee) and records the terms of the debt, including the interest rate, repayment schedule, and other conditions of the loan. The clause in the deed of trust that is of particular interest is the due-on-sale clause. This clause states that if the borrower transfers the property, either voluntarily or involuntarily, the lender has the right to demand full payment of the loan. In other words, it gives the lender the right to call the loan due, regardless of any payments already made or the loan term, when the property is sold. This clause is designed to ensure the security of the loan for the lender and to prevent any losses that could occur from the sale of the property.

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What is a deed of trust with a due-on-sale clause?

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