Which clause allows a lender to declare the entire debt due and payable if the property is sold without lender approval?

The correct answer is the alienation clause. This clause, often included in mortgage agreements, is designed to protect the lender's interests in the event that the property is sold or otherwise transferred to another party without the lender's consent. When an alienation clause is activated, it allows the lender to demand the entire balance of the loan be paid immediately if the property changes ownership, which means that any prospective buyer must either pay off the outstanding debt or obtain the lender's approval to assume the mortgage.

This is significant for lenders because they want assurance that the terms of the loan are upheld and that the property remains a secure investment. If the property were sold without their knowledge, the risk of default could increase, hence the need for such a clause.

The other options serve different purposes. For instance, the acceleration clause allows the lender to demand full repayment of the loan under certain conditions, such as if the borrower defaults on payments, but it does not directly relate to the selling of the property. Equitable redemption refers to the right of a borrower to reclaim property in foreclosure by paying off the debt, and the defeasance clause typically pertains to the act of voiding a mortgage upon the payment of the debt. Each of these clauses deals with different scenarios