This article addresses some of the issues which may arise among a borrower and two lenders in a situation where the lenders are both providing financing to the borrower for an individual real estate transaction.
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This presentation discusses various aspects of provisions in deeds of trust that deal with recourse versus non-recourse liabilities and so-called carve-out provisions imposing liability in an otherwise non- recourse context. A sample non-recourse carve-out provision is attached as Appendix A, but there is a great variety of provisions which lenders and borrowers negotiate on a regular basis.
Although they have received a bad reputation in some circles, the terms and provisions contained in a ground lease can be negotiated in such a way that they allow both property owners and developers to achieve a variety of financial and business goals. By understanding the risk and benefits, as well as the typical party’s motivations, an attorney working on a ground lease can best prepare his client for the unlikely eventualities that may face a party to a ground lease – whether they come in the first year or the ninety-ninth.