Is transferring a home between parent and child exempt from the due on sale clause even if it has 5 rooms since it is a duplex?

A transfer between parent and child is not exempt from the due on sale clause contained in the deed of trust. The lender can accelerate the loan balance and foreclose on the property. You may have confused the parent child exemption from reassessment for property tax purposes. For income tax purposes, your mother should transfer the property into a living trust with you as the beneficiary when she passes away. That way she can keep the tax benefits of claiming the property as her primary residence, with income exclusion if she sells the property up to $250,000, deduction of property taxes, and deduction of interest on the mortgage. Also, when you eventually take ownership of the property when she passes then you will have a stepiup in basis to the fair market value of the property at the time of your mother's passing. All of these tax benefits will be lost if she transfers the property now.

Yes, a due on sale clause does not apply to a transfer between you and your mother. It is still a bad idea. If your mother transfers the property to you, then your tax basis for purposes of computing capital gains tax on a sale of the property, will be her old low tax basis. When she passes away, whoever gets the house gets a stepped-up basis of its fair market value as of the date of death. If you sell it then, there will be no capital gain. If you appreciate this free advice, please remember to refer me to any friends or acquaintances who need a lawyer. Referrals are still our best source of new business. Do you have a revocable living trust to protect your heirs against probate? Probate takes forever, is expensive, and is annoying. Do your family a favor. Set up a trust, and put all your property, especially any real property, into the trust. Since it is revocable, you can change it, add to it, take property out of it, or even cancel it completely, at any time. We set up such trusts, provide a pour-over will as a back-up for any property that does not make it into the trust, provide you with blank durable powers of attorney for health care and financial decisions, in case you become incapable of making such decisions while still alive, and convey one piece of real property to the trust, usually the family home, for $1500.00. If you would like to hire me to do this, let me know, and I'll send you a list of the information I need. Dana Sack