Carveout
Glossary of Terms Related to Commercial Mortgages and Loans
A provision of a non-recourse promissory note that renders the borrower personally liable to the lender for damages should the borrower negatively impact the secured property in certain defined ways, usually relating to malfeasance or gross negligence. A typical carve-out might provide a lender with legal recourse to recover from the borrower personally the amount of unpaid tax liens the borrower has let accrue on the property.
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