Enacted as part of the Garn-St. German Depository Institutions Act of 1982 (P.L. 97-320; 96 Stat 1501) a due-on-sale clause can not be enforced on a “transfer into an inter vivos trust on which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property.” This exemption applies to residential real property containing less than five dwelling units. [12 USC Sec. 1701j-3(d)] The regulations list that the borrower in this type of situation must remain the beneficiary and occupant of the property. [12 CFR 591.5(b)(vi)] However, “occupancy” is not defined. Therefore, prudence suggests notifying the lending institution before the transfer.