Asked in Family Law, Real Estate Law and Bankruptcy

Q: My uncle and my father did partioned the Entire wealth like Cars , Buisness, Farm land , bunglow etc.

So the deal was my uncle can keep cars , bunglow and buisness but my father was good at farming so he kept all farms . This was mutually decided by my father and uncle along with my aunt ( Bua ) . So all the buisness and property was already in the name of my elder uncle but my father said that as we mutually have decided he'll give me my farm and other things someday. But now 7 years have passed but they are giving excuse that the land my father wants is already in debt and to transfer it on my father name we must clear the debt first . So is it true we need to clear debt before transferring the owner .

1 Lawyer Answer
W. J. Winterstein Jr.
W. J. Winterstein Jr.
  • Bankruptcy Lawyer
  • Boyertown, PA

A: Is it true that one needs to "clear debt before transferring" real property.

No. At a minimum, that's a forbidden restraint upon alienation.

The current owner(s) of the property can transfer it at will. If there is debt tied to the land, e.g., a mortgage, that mortgage must be paid currently for the new owner to retain ownership.

Historically, many Mortgages contained "due on sale" clauses, which more recently have been met with a general disfavor by the courts. In the given scenario, even if there is such a due-on-sale provision, the new owner could do a take-out mortgage/refinancing, to clear the old debt (some due-on-sale provisions are still respected, e.g., VA 100% mortgage loans to eligible vets, etc.).

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