Commercial Property Owners May Be Held Personally Liable For Sour Investments
A new ruling in Michigan may give creditors more legal backing to go after the personal assets of commercial real estate landlords whose properties are foreclosed on.
Current laws protect commercial property owners from losing their personal assets to creditors when real estate investments are no longer viable. With non-recourse loans, once commercial landlords give up their properties, most creditors are legally barred from obtaining other types of assets. However, a Michigan appellate court recently upheld the decision of a lower court, which ruled that bondholders were justified in launching a personal lawsuit against strip-mall owner David Schostak after he defaulted on a loan, according to the Wall Street Journal...
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