Alienation Clauses in Florida Mortgages
An alienation clause in a Florida mortgage, also called a due-on-sale clause, gives the lender the contractual right to demand immediate full repayment of the outstanding balance if the borrower transfers the property without the lender's consent. This provision is standard in virtually every residential and commercial mortgage originated in Florida.
Triggering Events
Florida alienation clauses are triggered by any transfer of the property or a beneficial interest in the property. This includes outright sales, transfers into LLCs or land trusts, gifts, and conveyances incident to business restructuring. Even granting a life estate or adding a co-owner to the deed may trigger the clause depending on the mortgage language.
Federal Exemptions
The Garn-St. Germain Act provides safe harbors that Florida borrowers can use without triggering acceleration. Transfers to a surviving joint tenant, transfers between divorcing spouses, transfers into revocable trusts where the borrower remains a beneficiary, and inheritance transfers are all exempt. Florida estate planning attorneys frequently rely on the trust exemption when helping clients fund revocable living trusts with mortgaged property.
Related Terms
Barnes Walker Real Estate
Barnes Walker advises on property transfers, mortgage compliance, and alienation clause issues in Southwest Florida. Contact us for guidance.
Florida Law Reference
Fla. Stat. Ch. 697
Defines mortgages as liens on real property and establishes requirements for mortgage creation, assignment, and satisfaction in Florida.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC