A corporate officer buys a house with a loan financed by the corporation, which requires the officer to grant a mortgage to the corporation. After three years of timely payments, the officer sells the house to an unrelated buyer without consent. The deed states the transfer is subject to the mortgage. The buyer records. Who is liable for the loan balance when payments are not made?

• A. The buyer is personally liable to the corporation due to the due-on-sale clause.
• B. The transferee-buyer takes title subject to the mortgage and is not personally liable.
• C. The buyer is in privity of estate with the corporation and is liable.
• D. The officer remains personally liable, and the buyer is automatically shielded.

Answer: (B)