Due-On-Sale Clause

In Jamaican real estate, a Due-On-Sale Clause is a provision in a mortgage agreement that requires the borrower to pay off the remaining balance of the loan in full when the property is sold or transferred to a new owner. This clause is important because it protects the lender’s interests by ensuring that the original borrower does not transfer the mortgage obligation to a new owner without settling the outstanding debt. The clause typically comes into effect during the property sale process, and it requires the borrower to either pay off the mortgage or obtain the lender’s approval for a new mortgage arrangement. To comply with a Due-On-Sale Clause, sellers must coordinate with their lender to address the loan balance and ensure that the sale proceeds smoothly, preventing potential legal and financial complications. This clause helps maintain the lender’s control over who holds the mortgage and ensures that the loan terms are adhered to throughout the property’s ownership changes.