Posted by Rya n on October 07, 2003 at 09:18:52:
I’m purchasing a 5-plex this month and I’m getting the funds from a family member. The family member will get a deed of trust on the property but they asked me a question that I have never considered before. If I were to get sued as the owner of the property would the lender have any chance of also being held liable. I have heard that banks are not liable for the actions of the owners but does this also apply to private lenders. I just wanted to give him additional confidence that this is not an issue. I could add him to the insurance policy which has liablity coverage.
Since a lot of people in this web site do hold notes have you ever heard of an occurance where the lender is liable??