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Buyer Smith purchases thirty-five acres for subdivision development and she plans to phase the development. In order to sell the lots in the first phase of the project, she should reserve within the mortgage which type of clause?
Buyer Smith purchases thirty-five acres for subdivision development and she plans to phase the development. In order to sell the lots in the first phase of the project, she should reserve within the mortgage which type of clause?
Final answer:Buyer Smith should reserve a subordination clause within the mortgage to sell lots in the first phase of the project.Explanation:In order to sell the lots in the first phase of the project, Buyer Smith should reserve within the mortgage a clause known as asubordination clause.A subordination clause allows the developer to sell the lots in the first phase of the project without having to pay off the entire mortgage loan. It prioritizes the sale of the lots over the payment of the loan. This clause is beneficial as it provides flexibility to the developer in staging the development and selling the lots as they become available.By including a subordination clause, Buyer Smith can secure financing for the entire land purchase while still being able to sell the first phase of the project to generate revenue to continue with subsequent phases of development.Learn more about subordination clause here:brainly.com/question/33962567#SPJ11...