DUE-ON-SALE CLAUSES

In general, see Maller, The Law of Due-on-Sale Clauses in Massachusetts, 68 Mass. L. Rev. 172 (1983).  In Egbert v. Freedom Federal Savings and Loan Association, 14 Mass.App. Ct. 383, 440 N.E.2d 22 (1982) the Appeals Court held that a due on encumbrance clause could be enforced in a commercial mortgage. The court noted, however, that the result would be different where residential property was being further encumbered property and had the loan been governed by 12 C.F.R., §545.8-3(g).

Also, see Dunham v. Ware Savings Bank, 384 Mass. 63, 423 N.E.2d 998 (1981) and Kornatowski v. Family Mutual Savings Bank, 388 Mass. 1011, 446 NE2d 404 (1983). Note that Chapter 112 0f the Acts of 1983 provides that a transfer from one spouse to another under M.G.L. c. 208, Section 34A, or a separation Agreement shall not trigger a due-on-sale clause in a mortgage.