CMBS 2.0 Update: The Expanded "Non-Interference" Carve-Out

One of the most significant changes in the most recent set of CMBS loan documents has been the expansion of the recourse carve-out provisions (a/k/a the bad boy provisions) to include a "non-interference" carve-out. One of the main selling points for CMBS loans has long been that fact that they are generally non-recourse to the borrower and its principals. The only exceptions to the general non-recourse nature of these loans are specifically enumerated bad acts of the borrower or guarantor such as fraud, waste, misappropriation bankruptcy and non-permitted transfers, which depending on the severity of such bad acts would result in recourse liability to the borrower and guarantor (generally a borrower principal) either for the full loan amount or to the extent resulting in a losses to the lender. Although the language of such non-recourse carve-outs are typically heavily negotiated and may vary slightly from loan to loan, the intent behind these exceptions to