Legal Question in Real Estate Law in California

Yes.

Unless the note otherwise provides, prepayment is as much of a breach as late payment, and if the note is completely silent on the matter, the lender may refuse to accept prepayment. Consequently, most notes make some provision for prepayment, including allowing it without penalty at any time, allowing it without penalty after a certain time, or prescribing penalties under various formulas.

These rules have been modified by statute for certain kinds of loan, such as consumer loans and residential loans, but there is no such limitation imposed upon commercial, industrial and financial-industry lending not involving a homeowner or consumer loan.

So, the provisions of your loan agreement are very likely lawful and enforceable. A lawyer's careful review might possibly turn up language that could be construed as permitting prepayment without penalty at certain times or under certain conditions, but if the note is tightly written by professional lenders, probably not.

The loan agreement should be reviewed. This office will do so for a reasonable fee.