REAL ESTATE GLOSSARY
Carve-outs
Non-Recourse Carve-outs
Events that can trigger guarantor liability in an otherwise non-recourse loan.
What does Carve-outs mean?
Events that can trigger guarantor liability in an otherwise non-recourse loan. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
Carve-outs in context
Fraud or unauthorized transfer may activate a carve-out guaranty.
Why it matters in financing
Carve-outs can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related real estate terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.