Any association which makes a loan whose proceeds the borrower uses, or may use, to finance the design, manufacture, construction, repair, modification or improvement of real or personal property for sale or lease to others is not liable to third persons for:

1. A. any loss or damage resulting from any defect in the property; or
2. B. any loss or damage resulting from the borrower's failure to use due care in any of the work for or on the property, unless the loss or damage results from an act of the association outside the scope of its business as an association or unless the association has knowingly been a party to any misrepresentation concerning the property.

History: 1953 Comp., § 48-15-151, enacted by Laws 1971, ch. 242, § 11.

ANNOTATIONS

Severability clauses. — Laws 1971, ch. 242, § 12, provides for the severability of the act if any part or application thereof is held invalid.

Am. Jur. 2d, A.L.R. and C.J.S. references. — 9 C.J.S. Banks and Banking §§ 107, 113, 115, 121.