What Happens When You Sell a Logan Rental or Family Farm on Seller Financing?
Seller financing in Logan and Cache County: student-area rentals, farmland, and family sales to children, with the due-on-sale and interest-rate questions a Utah attorney checks.
Informational onlyThis page is general information about Utah law, not legal advice for your situation. Reading it doesn't create an attorney-client relationship. Read the disclaimer.
Seller financing in Logan and Cache County works like it does anywhere in Utah. The situations are what stand out. Student-area rentals, farmland, and parents selling to their children each need different documents. Family deals raise two questions early: the lender's due-on-sale clause, and the interest rate you charge.
Student-area rentals in Logan
Rentals near campus draw investor buyers. An investor who already owns rentals can be a good payer. But a student rental wears harder than most homes, and tenants turn over often.
Build that into the documents. The buyer should carry landlord insurance that names you as lender. The buyer should be responsible for repairs, city rules, and tenants. You should have a right to inspect on reasonable notice.
Take the leases seriously at closing. Get copies of every lease and move the security deposits to the buyer in writing. Tell the tenants, in writing, where to send rent.
On a $360,000 rental with $72,000 down, you would carry $288,000. The seller-carry calculator shows the payment for the rate and term you choose.
Selling to your children: the due-on-sale question
Parents in Cache County sometimes sell the family home to a child and carry the note themselves. If the parents still owe on the home, the first question is the lender's due-on-sale clause.
Federal law lists transfers a lender cannot treat as triggering that clause. For residential property of fewer than five dwelling units, the list includes a transfer where the borrower's spouse or children become an owner of the property (12 U.S.C. § 1701j-3(d)). It also covers transfers on death and certain living-trust transfers.
That is helpful, and it has limits. The list is written for homes of one to four units. Whether your exact transfer fits it depends on the loan, the property, and how the deal is structured. Have your attorney read the loan before anyone signs a deed.
Pricing a family note: the interest rate
A family note at a low rate feels generous. It can also create a tax problem. A note charging less than the applicable federal rate can have interest imputed under the tax code (26 U.S.C. §§ 1274, 483; Rev. Proc. 2025-32). Put simply, the IRS may treat you as receiving interest you did not charge.
The current rates are published monthly.
Source: Rev. Rul. 2026-17. The IRS publishes new rates every month; the rate for your note depends on its term and the month of the sale.
There is one more family rule. Under the installment method, a related-party resale within two years can speed up the seller's gain (26 U.S.C. § 453; IRS Pub. 537). If your child might sell the home soon, raise it with your tax preparer before closing.
Farmland needs its own analysis
A farm is not a big house lot. The questions are different, and a home-sale checklist will miss them.
- Water. Are water rights or irrigation shares part of the sale? How are they transferred?
- What the loan covers. A farm with a home on it may be on one loan or several.
- Leases. Is there a grazing or crop lease in place? Does it survive the sale?
- Equipment and livestock. These are usually sold separately from the land.
- Partial releases. If a child is buying the farm in pieces, when does each piece come free of your trust deed?
The due-on-sale exemption list does not automatically help here. It is written for residential property of fewer than five dwelling units. A working farm needs a separate look at what the loan actually secures.
Comparing the three Cache County situations
| Situation | First question | What usually goes into the documents |
|---|---|---|
| Student-area rental | Who handles tenants, deposits, and repairs? | Landlord insurance naming you, repair duties, inspection rights |
| Family home sold to a child | Does the transfer fit the lender's exemption list? | Written note at or above the federal rate, recorded trust deed |
| Farmland | What do the water, leases, and loans cover? | Water transfer terms, lease assignments, partial release schedule |
Keeping a family deal businesslike
Family deals go wrong in quiet ways. A missed payment turns into an awkward holiday. A sibling asks why one child got a better deal. The best protection is paperwork that treats the sale like any other.
Write a real note with a real payment schedule. Record the trust deed, because an unrecorded document loses to a later good-faith purchaser who records first (Utah Code § 57-3-103). Consider a third-party servicer so nobody has to ask about a late payment. And tell your estate planning attorney about the note, so the other children know how it is handled.
What happens if a family buyer stops paying?
The same process applies as with a stranger, and that is the hard part. A trust deed from your child is enforced the same way as any other Utah trust deed.
If your child lives in the home, a written notice with at least 30 days to cure comes before any notice of default (Utah Code § 57-1-24.3). After the notice of default is recorded, the buyer has three months to reinstate by paying what is past due plus costs (Utah Code § 57-1-31).
Most families never want to use those steps. Knowing they exist changes how you write the note. A clear grace period, a written late fee, and a servicer who sends the reminders keep the conversation about the paperwork instead of the relationship. The foreclosure timeline tool shows the dates if you ever need them.
Which guides matter most here
For how a family seller-carry works start to finish, read the complete Utah seller financing guide. The servicing and taxes guide covers interest reporting and installment sales. The interest rate article explains how to set the rate. Other counties are on the locations page.
Recording in Cache County
Greg's office is in Provo, in Utah County. He works with families statewide, and a Cache County sale does not need a local office to close. Utah recorders have accepted electronic recording statewide since January 1, 2022 (Utah Code Title 17, Chapter 71).
Utah's statewide recording-fee section sets $40 per instrument (Utah Code § 17-71-407). Fees were amended again in 2026, so verify the current amount with the county recorder before closing.Confirm the current fee and submission rules with the Cache County Recorder before closing.
What Greg would tell you
With a family sale, I want the note to look like one you'd sign with a stranger. That protects your child as much as it protects you. If there's a loan on the house, we read it together before anyone signs a deed.
Frequently asked questions
Can I sell my Logan home to my son on a note from me?
Yes, and treat it like a real loan. Write the note, record the trust deed, set a rate at or above the applicable federal rate, and ask your tax preparer and attorney how it fits your estate plan.
If I still owe on the house, will my lender call the loan when my kids take title?
A transfer where the borrower's spouse or children become an owner is on the federal exemption list for homes of fewer than five units. Whether your particular sale fits that exemption is a question for your attorney before closing.
Does the same exemption apply to our farm?
Not automatically. The federal exemption list is written for residential property of fewer than five dwelling units. A farm with a home on it needs a separate look at what the loan covers.
Can I charge my children zero interest?
You can agree to it, but a below-market note can have interest imputed for tax purposes. Compare the rate to the current applicable federal rate and talk to your tax preparer first.
Do I need a Cache County attorney?
No. Any Utah-licensed attorney can prepare the documents. Greg works from Provo with clients statewide, and Cache County documents can be recorded electronically.
This site is for general information about Utah law and is not legal advice. Using it does not create an attorney-client relationship. Every transaction is different — talk to an attorney about yours. Attorney advertising.
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