Refinance penalty

[Charles A.]

We are about to close on an apartment complex purchase with a local bank.

The only sore point for me in the deal is a 1% penalty inserted by lender if property is refinanced with another bank anytime in the future but no penalty if refinanced with them or sold outright.

Is this pretty standard or am I right to continue pushing for the clause to be removed ?

[Charlie Fitzgerald]

"anytime" in the future is not standard and in most states it is required to be defined to a specific term for pre-payment penalties to apply.  Ex. 1% pre-pay penalty if note is paid off in the 1st year. 

Florida law prohibits prepayment penalties that are not specified in the mortgage note. But otherwise it allows them without limit, as long as they are disclosed in the note. The law specifies that any note that is silent with regard to the right to prepay may be paid in full without prepayment penalty (Fla. Stat. Ann. § 697. 06, 687. 03(3)).

It's a negotiable item...so, negotiate.