What does the property inspection covenant permit the lender to do?

• A. Allow the mortgagor to conceal damages
• B. Require the mortgagor to insure the property beyond policy limits
• C. Permit the mortgage to inspect the property to determine whether the mortgagor is keeping the property in good repair
• D. Permit the lender to relocate the property

Answer: (C)

Property inspection covenants give the lender the right to check the actual condition of the real estate that secures the loan. The goal is to verify the mortgaged property is being kept in good repair and preserving its value, which protects the lender’s security if the borrower runs into trouble. This isn’t about allowing concealment of damages, setting insurance limits, or relocating the property. It specifically authorizes inspections to ensure the collateral remains in proper condition.