MARK KOHLERMain Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, LLC · Owner at Main Street Professionals, LLC

Don't Fear the "Due on Sale" Clause 🏠

30 Apr 2026 · 1 min

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1:08

In this concise advisory segment, Mark Kohler emphasizes key practices for maintaining asset protection when operating a small business or rental‑property venture. He warns that using the same bank account for personal and business finances quickly defeats protection, urging strict separation of accounting on a regular basis. Kohler also stresses the importance of signing contracts, leases, and online accounts in the business’s name rather than personally. He then addresses a common concern about the mortgage due‑on‑sale clause, explaining that transferring a property’s title into an LLC after closing is safe—banks typically do not enforce the clause, and the owner remains personally liable for the mortgage while the LLC holds the title for protection. The overall message is to avoid commingling assets, formalize business identity in agreements, and not fear title transfers for asset protection.

Chapters

This is one of the fastest ways to lose protection. So if you're using the same bank account for your personal life and your business, pshh, game over. Not a good move. And I think all of you know that. Now, is it going to happen once in a while? You're at Costco, you need to pick up something for your business, so you write a personal check and buy it and you want to reimburse yourself and write it off. Sure, that's fine if it's once in a while, but you've got to respect that separate accounting as much as possible on a daily, weekly, monthly basis. One of the other big ones is just not even signing contracts in the name of the business, signing them personally, signing up for online accounts in your personal name, not the company name. Think about the lease agreement on your rental property, title, and frankly, do not worry about transferring title from the property into the LLC. Oh, there's a due-on-sale clause with the mortgage. People, we've transferred thousands, tens of thousands of titles into LLCs after closing, and the banks don't care. You're still on the hook personally for the mortgage. It's just the title is held by the LLC for asset protection. So do not worry about moving title after closing.