What is the main purpose of a DOS clause in a real estate transaction?

The main purpose of a Due on Sale (DOS) clause in a real estate transaction is to limit the seller's ability to transfer the property. This clause is typically included in a mortgage or trust deed and provides that if the property is sold or transferred without the lender's consent, the lender has the right to demand full repayment of the outstanding loan balance.

The inclusion of a DOS clause protects the lender’s interests by preventing the new buyer from assuming the existing mortgage terms without the lender's approval. It ensures that the lender maintains control over who takes on the mortgage obligation, effectively reducing the risk to the lender if the current borrower sells the property to someone who may not have the same creditworthiness or ability to repay the loan.

Other choices do not accurately describe the function of a DOS clause. For instance, while it may have implications on how the property is used, such a purpose is not central to the clause. Similarly, it does not deal with payment schedules or maintenance responsibilities, which are typically covered through separate provisions in the transaction documents. Thus, the focus remains on limiting the transfer of the property as it relates to the mortgage agreement.