This additional interest might be for financing construction, remodeling, renovation or repair. Leases are arranged while the construction is being done. As the loss will result in a delay in the opening of the project, the leases already signed will be broken due to the fact that the new tenants cannot occupy the premises at the original projected date. These leases will all need to be renegotiated. The insured will incur time and expense to have these leases renegotiated and signed.
Coverage is provided for the additional expense of renegotiating the leases.
Even though a project is damaged, there is still value at the site. A tax assessor will recognize the value of the original site plus all of the site improvements and the value of the project that was not destroyed by the loss. Examples of site improvements that are typically completed before an actual structure begins to take shape are items such as water mains, sewage conduits, underground wiring, and moving the ground around such as leveling a site prior to the very beginning of construction. Real estate taxes on these values will be levied despite the loss. This again is an expense covered by the soft cost endorsement.