What happens if there is a casualty or condemnation?
In the event of a casualty or condemnation a predetermined amount will be due to the lessor. This amount is known as the “stipulated loss value” which is calculated to be sufficient to repay the outstanding debt, the equity’s remaining investment balance and any tax recapture that may be due as of the date of the loss. You may be required (subject to possible rights to self-insure) to arrange for casualty insurance in order to cover the applicable amount of stipulated loss value from time to time.
