Can the Bank enforce a Do On Sale Clause on a land contract?

I am offering my duplex as rent to own. One of the prospective t/b wants to buy it on land contract and still make payments for a year while he fixes up the basement into a third apt. How will the bank react if they find out? Will they need to enforce the DOSC or will they still accept payments until the final balloon payment? If I do it should I record the land contract with the county? I will be contacting a lawyer but wanted to get a heads up from everyone’s expertise here. Any info or thoughts are welcome. Thanks! PureAu :biggrin

Yes, if the lender wished to pursue it, they could invoke the DOS if you sold via land contract. They could do it on a rent2own/lease-option as well. In the current market, chances are very good that they won’t as long as you’re paying as agreed. Chances are also very good that they’ll never find out anyway.

Why would you want to record a land contract where you where the seller? Hopefully, you’ll get good legal advice here, but that’s a bad idea.


Thanks Roger,
I appreciate the help. If I go the land contract route I will not record it. Thanks! Avi