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The covenant may be negative or affirmative. A negative covenant is one in which property owners are unable to perform a specific activity, such as block a scenic view. An affirmative covenant is one in which property owners must actively perform a specific activity, such as keeping the lawn tidy or paying homeowner's association dues for the ...
Technical default occurs when an affirmative or a negative covenant is violated. Affirmative covenants are clauses in debt contracts that require firms to maintain certain levels of capital or financial ratios. The most commonly violated restrictions in affirmative covenants are tangible net worth, working capital/short term liquidity, and debt ...
The legal provision in the loan agreement providing for the loan to be "called" is the "acceleration clause": once the buyer defaults, all future payments due under the loan are "accelerated" and deemed to be due and payable immediately. [1] Covenants may also be waived, either temporarily or permanently, usually at the sole discretion of the ...
Negative pledge clauses are almost universal in modern unsecured commercial loan documents. The purpose is to ensure that a borrower, having taken out an unsecured loan , cannot subsequently take out another loan with a different lender, securing the subsequent loan on the specified assets.
A common example of an affirmative covenant that "touches and concerns" the land is a transfer fee payable to a community association. These have routinely been found to touch and concern the burdened land because the affirmative obligation to pay money has a reasonable nexus to a benefit conferred upon the burdened land.
Lord Templeman held that the covenant could not be enforced because the covenant was positive. His judgment said the following. [1]Equity cannot compel an owner to comply with a positive covenant entered into by his predecessors without flatly contradicting the common law rule that a person cannot be made liable upon a contract unless he was a party to it.
In this type of privity, the covenants may be positive or negative and, unless very inequitable, are generally held to be binding. After the case, instead of the first narrow privity of estate, any restrictive covenant chiefly needed to satisfy four lesser requirements to bind the successors in title:
Negative rights exist unless someone acts to negate them. A positive right is a right to be subjected to an action of another person or group. In the framework of the Kantian categorical imperative, negative rights can be associated with perfect duties, while positive rights can be connected to imperfect duties. [citation needed]