The word means to "clear from blame or remove guilt".
One of best things about the exculpatory clause is that it allows a buyer to purchase a property without any personal liability.
In an exculpatory clause, the liability may be limited to the property itself and may not extend beyond the liability which involves the property.
If a buyer defaults on a loan with an exculpatory clause and the seller of the lender forecloses and they take the property back, with the exculpatory clause that might be all they can take from the buyer.
A buyer's credit might be spared with the inclusion of such a clause in their contract.
If the seller is going to carry some of the financing for the buyer and the note is secured by the real estate with the seller this clause may be included.
As an example, if the seller is listing the property for 200 thousand dollars and the first mortgage has an existing balance of 75 thousand dollars on it, and the seller is willing to sell the property for a downpayment, (with the buyer taking over the first mortgage and the seller accepting a note for the difference) if the buyer signs for the property subject to the existing first mortgage, and includes an exculpatory clause that says " ...the liability shall be limited to the property itself and shall not extend beyond the liability of the property", the buyer is relinquished of any responsibility in the case of a default to the seller and their credit spared.
The buyer is absolved. (maybe)
Chime in legal eagles !
Please be advised that:
The information and notices contained in this blog are intended to summarize recent developments and news. The posts are presented as general research and information. These posts are not intended, nor should be regarded, as legal advice. Some blog posts concern allegations made in civil lawsuits and in criminal indictments in United States Courts. All persons are presumed innocent until convicted of a crime and proven guilty. Readers who have particular questions or who believe that they need legal counsel should seek the advice of a qualified attorney. It is neither the editor's or author's intention to create a confidential relationship or any broker-client relationship via communication from this site at any time. Please consult with your state real estate board if questions & answers in the education section conflict with the laws of your region or if you need clarification regarding their applicability or how they may govern the services that you provide.
By entering this web site, you understand the following:
When you select a link to an outside Web site, you are subject to the privacy, copyright, security, and information quality policies of that Web site. David Saks:
1.DOES NOT control or guarantee the accuracy, legality, relevance, timeliness, or completeness of information contained on a linked Web site;
2.DOES NOT endorse linked Web sites, the views they express, or the products/services they offer unless linked web sites, the views they express, or the products/services they offer endorse or support David Saks in accordance with the standards of the Tennessee Real Estate Commission and the Federal Government's laws regarding commerce and the application, solicitation and transmission of internet-related concerns, commerce or social networking;
3.CANNOT authorize the use of copyrighted materials contained in linked Web sites;
4.IS NOT responsible for transmissions users receive from linked Web sites;
5. That DavidSaks.Com is biographical & real estate related. Some links within will leave this site.
6. http://activerain.com/profile/davidsaks is internet-compliant & abides by the rules & regulations of the Tennessee Real Estate Commission, Eve Maxwell, Executive Director.
7. Unless indicated otherwise, ActiveRain does offer listings, or IDX and is provided for licensed salespersons, brokers, buyers & sellers of real property as a community & professional service.
8. David Saks is a retired / licensed real estate broker in the State of Tennessee, license #290452, and an independent contractor.
9. Information is believed to be accurate, but not guaranteed, at any realty link or document connected to the World Wide Web & viewable by anyone connected to the internet who has a web browser.
10. Brokers, buyers, sellers, agents & anyone should independently verify any information prior to submitting any offer to purchase goods & services from any link.
11. Please Visit The American Real Estate Alliance or Memphis.8k.Com for additional information regarding property issues for real estate professionals and consumers.
Before you even think about committing a real estate crime
click this red button.
"Information generated by the Department of Justice is in the public domain and may be reproduced, published or otherwise used without the Department’s permission. Citation to the Department of Justice as the source of the information is appreciated, as appropriate."
© All Rights Reserved.
Department of Justice Legal Policies
Click "HERE" For Today's Question
David Saks Show
University of Memphis
Mr.Saks' participation in ActiveRain ended April 13, 2015.
His blog archives will remain online.
May God bless you.