Reviewed by Casa Academy and updated July 29, 2026 using the current DBPR checklist and Pearson VUE scheduling guidance.
Defeasance Clause
A defeasance clause in a mortgage or deed of trust promises that when the borrower pays the debt in full, the lender will execute a release or reconveyance so the lien is removed and clear title returns to the borrower.
Exam context
Choose defeasance when the borrower fully satisfies the debt and expects the lien released. Partial payments do not trigger defeasance until the obligation is completely discharged per the note terms.
Purpose in security instruments
The clause defeats the lender's interest in the property upon full performance. Without recording the release, the lien may appear on title even after payoff. Title companies require proof of satisfaction before insuring a resale. Some states use a deed of trust with trustee reconveyance instead of mortgage language.
Relation to alienation and acceleration
Defeasance upon payment differs from an alienation clause that lets the lender accelerate if the owner transfers without consent. Exams may present both clauses in one note and ask which applies after payoff versus unauthorized sale.
Examples
Mortgage payoff
After the borrower wires the final payment, the lender records a satisfaction of mortgage and the county index shows the lien cleared.
Trust deed reconveyance
A beneficiary instructs the trustee to reconvey after payoff, extinguishing the trust deed lien on the owner's title report.
Keep studying
Related terms
- Alienation clauseDue-on-sale language that may accelerate the loan on transfer.
- Acceleration clauseLender demand for immediate full balance on default or trigger events.
Related resources
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- Florida exam topic hub
Florida-specific explainers and question sets for this topic area.
Sources
- Cornell LII: mortgage(Cornell Legal Information Institute)