affirmative covenants

What Happens If Affirmative Covenants Are Violated?

If a borrower violates an affirmative covenant, the lender usually has several options:
1. Notification: The lender may first notify the borrower of the violation and request immediate rectification.
2. Penalties: The agreement might stipulate financial penalties for non-compliance.
3. Acceleration: In severe cases, the lender may demand immediate repayment of the entire loan amount, known as acceleration.
4. Legal Action: The lender can take legal action to recover the owed amounts or to enforce the terms of the agreement.

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