Is it a breach of contract if the mortgagee transfers property with a due on sale clause without informing the mortgagee?

In the context of mortgages with a due on sale clause, transferring the property without informing the mortgagee does not constitute a breach of contract. The due on sale clause allows the lender to demand full payment of the loan if the property is sold or transferred without consent. However, it does not inherently impose a duty on the borrower to inform the lender of a sale or transfer.

In essence, the contract terms govern the relationship between the mortgagee and the mortgagor. Unless the mortgage explicitly requires disclosure prior to such a transfer, the borrower has no legal obligation to notify the lender, thus not breaching the contract. The lack of a disclosure requirement means that even if the transfer occurs, as long as it adheres to the contractual language, there is no breach.

This perspective underscores the importance of reviewing the specific terms of the mortgage agreement for any clauses that clarify requirements about notification or consent. In many standard mortgage agreements, unless expressly stated, the obligation to inform the lender does not exist, allowing the borrower to proceed with the transaction without a legal concern for breaching the contract.