Due on Sale and Due on Encumbrance Clauses
Egbert v. Freedom Federal Savings and Loan Association, 14 Mass.App.Ct. 383, 440 N.E.2d 22 (1982) held that a due on sale clause could be enforced in a commercial mortgage where the mortgaged property was further encumbered. The court noted, however, that the result would be different where the property being further encumbered was residential property and the loan was governed by 12 C.F.R., §545.8-3(g).
See also, Title 12, Chapter 13, sec. 1701j-3, Preemption of due-on-sale prohibitions.
See also Dunham v. Ware Savings Bank, 384 Mass. 63, 423 N.E.2d 998 (1981) for a discussion on due-on-sale clauses generally.