Vetting a PPM as a passive investor for multifamily

[Bruce P.]

Hi all,

My friend is looking to get into passive investing for multifamily deals. While researching this topic for them, I read this insightful article where the author Ms. Perlman said before signing a PPM:

While reviewing a PPM, my friend noticed this clause:

From the PPM, my friend noticed that the Management and the Sponsorship team appear to be the same people.

2 questions:

1) Does that clause in my friend's PPM mean that in fact, the sponsorship team is putting the clause that is NOT recommended by Perlman's article?

2) What kind of clause would you put instead of the one shown in my friend's PPM? I can understand why a sponsorship would not want to be held liable for anything, but what is fair to hold them liable for?