Interested in training for your team? Click here to learn more

Structuring Financial Covenants, Cash Management, and Other Lender Protections in Mortgage Documents

Nonrecourse Carveouts, Leasing Provisions, Secondary Financing, Escrow Disbursement Conditions

Recording of a 90-minute premium CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Tuesday, May 7, 2024

Recorded event now available

or call 1-800-926-7926

This CLE webinar will consider key loan document provisions that provide borrowers flexibility and/or lender protections in times of economic uncertainty, including financial covenants, cash management provisions, additional indebtedness, and nonrecourse carveouts, as well as loan disbursement conditions.


The current commercial real estate market has presented new challenges for borrowers and lenders and has impacted the initial drafting of loan documents or required modification of existing documents. Lenders might include new covenants and obligations in loan documents, while borrowers will want to negotiate for protections related to factors beyond their control.

Lenders and borrowers should consider whether relief from debt service coverage and other financial covenants will be necessary. If borrowers own properties where tenants seek rent reduction or forgiveness, borrowers should consider the impact on any financial and leasing covenants. Lockbox provisions may need to be revised to provide the lender with more flexibility in addressing tenant vacancies or debt-service coverage ratio (DSCR) triggers.

In construction loans or other loans with a future funding component, borrowers may be unable to satisfy conditions precedent to disbursement due to force majeure clauses and their inability to make continuing representations and warranties required by lenders. Current and future documents may need revisions to address disbursement issues.

Documents may also need to contemplate additional indebtedness and whether the borrower will be entitled to loan forgiveness or to prepay the loan before the maturity of the senior debt. Also, current market conditions may force borrowers and lenders to revisit nonrecourse or "bad-boy" carveouts as well as provisions regarding springing liability for bankruptcy or insolvency.

Listen as our authoritative panel discusses financial covenants, cash management, and other lender protection provisions in real estate finance documentation.



  1. Financial covenants: DSCR, LTV, other
  2. Construction and other loan disbursements: loan balancing conditions, force majeure
  3. Cash management: lockbox triggers
  4. Leasing covenants and occupancy requirements
  5. Reps and warranties
  6. Recourse carveouts
  7. Additional financing


The panel will review these and other documentation issues:

  • How should loan documents address commercial and retail tenant defaults?
  • What changes may be necessary to DSCR and other covenants to avoid loan defaults or cash management triggers?
  • How should loans involving future disbursements be tailored to address the current economic uncertainty?
  • What revisions should be made to subordinate financing provisions to accommodate other financing?


Kostman, David
David B. Kostman

Loeb & Loeb

Mr. Kostman’s practice focuses primarily on real estate finance, with a concentration on the origination, sale,...  |  Read More

Vallerie, Megan
Megan Vallerie

McDermott Will & Emery

Ms. Vallerie advises clients on a broad range of complex real estate transactions on both the debt and equity sides of...  |  Read More

Access Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. All formats include course handouts.

To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video