Due Diligence in Commercial Transactions Practice Questions

Question 1 of 5

Hawthornpoint Capital is acquiring a brownfield site formerly used as a printing plant. The site will be redeveloped to office. The QP confirms residual contamination but recommends 'risk assessment' rather than full removal. What does an accepted risk assessment under O. Reg. 153/04 enable?

• AIt allows site-specific standards, accepted by the Director, to support an RSC despite contamination above generic standards
• BIt requires immediate excavation of all contamination
• CIt eliminates the need for a Phase I ESA
• DIt re-zones the property to residential

Question 2 of 5

Maplewood Capital is reviewing a Phase I ESA for a property it intends to acquire. Which of the following is NOT a standard component of a Phase I ESA under CSA Z768?

• ARecords review of historical land use
• BSite reconnaissance and visual inspection
• CIntrusive soil and groundwater sampling
• DInterviews with current and past owners and occupants

Question 3 of 5

Brookbridge Acquisitions has executed an APS for a multi-tenant office tower in Mississauga. Counsel orders an estoppel certificate from each major tenant. What is the primary purpose of the estoppel?

• ATo grant the purchaser an option to renew the lease at the same rent
• BTo bind the tenant to the lease's stated terms and confirm there are no undisclosed defaults or side agreements
• CTo allow the purchaser to terminate the lease without penalty after closing
• DTo convert the lease from a gross to a net lease structure

Question 4 of 5

Greenmoss Logistics obtains an executive summary of a Phase II ESA stating that contamination is bounded and at-source remediation will cost $1.4M. What is the typical commercial outcome at closing?

• AA purchase price reduction or a remediation holdback equal to the estimated cost plus a contingency, supported by a remediation agreement
• BA cancellation of the deal automatically, by operation of law
• CA waiver of the contamination by the lender
• DA municipal indemnity covering the contamination

Question 5 of 5

Tarnwood Realty is closing on an industrial property in Cambridge. An off-title search at the local municipality reveals an outstanding work order requiring removal of an unpermitted mezzanine. Who is liable for compliance after closing?

• AThe vendor only, because the work order pre-dates the closing
• BThe current owner of the property at the time of enforcement, which after closing is the purchaser
• CThe contractor who built the mezzanine, regardless of ownership
• DThe municipality, because it issued the order