Contracts
What is a 'release clause' in a Delaware subdivision mortgage?
AA clause releasing the agent from liability after closing
BA mortgage provision allowing individual lots to be released from the blanket mortgage lien upon payment of a specified portion of the loan, permitting lot-by-lot sales✓ Correct
CA clause releasing the buyer from the contract if financing is denied
DA provision allowing the seller to release contingencies before the deadline
Explanation
A release clause in a blanket mortgage allows a developer to release individual lots from the mortgage as they are sold, upon payment of a release price per lot. Without a release clause, a blanket mortgage would encumber all lots and prevent individual lot sales until the entire mortgage is paid off.
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