2.4.5.3 Property Covenants

Property covenants are important in lease financings (where the public agency’s payment obligation is contingent upon having use and occupancy of the leased property) and project finance transactions. These may include covenants to do the following:

Not sell or encumber the property.
Maintain the property in good condition.
Reconstruct, repair or replace the property in the event of damage or destruction.
Maintain casualty and other property related insurance.