Construction Loan Covenants Sample Clauses
Construction Loan Covenants are contractual provisions that set specific requirements and restrictions on borrowers during the course of a construction loan. These covenants typically mandate that the borrower maintain certain financial ratios, adhere to project timelines, and use loan funds exclusively for approved construction-related expenses. For example, a borrower may be required to provide regular progress reports or obtain lender approval before making significant changes to the project. The core function of these covenants is to protect the lender’s investment by ensuring the project is completed as planned and minimizing the risk of default or misuse of funds.
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Construction Loan Covenants. Tenant acknowledges that the loan documents evidencing Landlord's financing for the Building and other Improvements to be constructed on the Land (the “Construction Loan”) may contain certain covenants based on Tenant's financial condition, business, and operations (“Tenant's Loan Covenants”). Tenant acknowledges that it has received, reviewed, and approved Tenant's Loan Covenants set forth in the Loan Agreement and the other Construction Loan documents. Tenant understands that the violation of any of Tenant's Loan Covenants may result in a default by Landlord under the Loan Agreement. Accordingly, Tenant agrees, for the benefit of Landlord, to comply with Tenant's Loan Covenants throughout the term of the Construction Loan, including any amendments, renewals, or modifications thereof. Lease Agreement for Forest Park Medical Center at Southlake
Construction Loan Covenants