This question was answered based upon current rules, regulations & statutes in effect on May 14, 2020
I hope all is well with you.
Hoping you can shed some light as I’ve been going back and forth with insured and bank on this.
Bank is requesting to be listed as a Mortgagee for property being given as collateral for a loan. Loan is not for our insured, but for his landlord who we do not insure. Our insured is tenant of said property with triple net lease. No direct relationship between our insured and bank requesting to be listed as Mortgagee.
What are your thoughts on this? I’d appreciate any feedback you might be able to share.
Irene Morrill: A triple net lease means:
A triple net lease (or "nnn" lease) is a form of real-estate lease agreement where the tenant or lessee is responsible for the ongoing expenses of the property, including real estate taxes, building insurance, and maintenance, in addition to paying the rent and utilities.
The lease requires the tenant to insure the building – all losses whether negligent or not…first party coverage …not just buy coverage should they be sued for damaging building
I would “think” that the contract between building owner should have mentioned …oh by the way … I have a loan on the building …
the tenant has a legal right by contract language to buy first party coverage for the building …the building owner should be an additional insured …on the property and liability coverage ..there are endorsements for that …
And …that mortgagee should be listed on the policy
If set up properly …if there is a building loss …the check should mention the named insured (tenant), the building owner and the mortgagee
Agent: Thanks so much, I really appreciate the help!
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