Tennessee Code 45-3-704 – Construction lenders liability
Terms Used In Tennessee Code 45-3-704
- Association: means a capital stock or mutual savings and loan association. See Tennessee Code 45-3-104
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Property: includes both personal and real property. See Tennessee Code 1-3-105
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- real property: include lands, tenements and hereditaments, and all rights thereto and interests therein, equitable as well as legal. See Tennessee Code 1-3-105
An association that makes a loan, the proceeds of which are used or may be used by the borrower to finance the design, manufacture, construction, repair, modification, or improvement of real property for sale or lease to others, shall not be held liable to third persons for any loss or damage occasioned by any defect in the real property so designed, manufactured, constructed, repaired, modified, or improved, or for any loss or damage resulting from the failure of the borrower to use due care in the design, manufacture, construction, repair, modification, or improvement of the real property, unless the loss or damage is a result of an act of the association outside the scope of the activities of a lender of money that is tantamount to assuming direct and active responsibility for, or assuring the structural integrity of, the design, manufacture, construction, repair, modification, or improvement of the property or unless the association has been a party to misrepresentation with respect to the real property.