negative covenant definition

negative covenant

Provision in a debt agreement (usually an adhesion contract type) that imposes one or more constraints on the borrower, such as a ceiling on the executives' salaries, prohibition on acquiring more debt, and tight control on level of dividend.

Provision in a deed that imposes certain constraints on the buyer of a piece of land, such as density of buildings per unit of area, size, style, or price range of the buildings to be erected, types of businesses allowed. Also called negative pledge or restrictive covenant.

negative covenant is in the Banking, Commerce & Finance, Corporate, Commercial, & General Law and Real Estate & Buildings subjects.

negative covenant appears in the definitions of the following terms: loan covenant and restrictive covenant

This content can be found on the following page:

http://www.businessdictionary.com/definition/negative-covenant.html