DUE DILIGENCE CHECKLIST For: [PROPERTY NAME]

Transcription

1 DUE DILIGENCE CHECKLIST For: [PROPERTY NAME] Page 1 / List and describe ownership interests 2. A List required third party consents and releases (i.e., mortgages, regulatory) 3. Send authorization to governmental authorities permitting access to their files 4. Review and report on government agency responses 5. Review agreements with governmental authorities affecting the Property, including correspondence and orders 6. Review and report on all encumbrances to the Property including: (a) mortgages, charges, hypothecs, security interests, liens and other monetary encumbrances (b) easements, licences and rights of way, transit, agreements (c) development agreements (d) operating and joint use agreements (e) building restrictions (f) encroachment agreements (g) assignments of rent and leases (h) capital leases (i) subsurface agreements (j) City licences (k) reciprocal agreements 7. Review all agreements relating to the co-ownership of the Property and minutes of co-ownership meetings (if any) 8. Review copies of ground leases (if any) 9. Cost sharing or other agreements with adjacent owners 10. Purchase or sale option contracts or rights of first refusal 11. Review of title and title documents

2 12. Review any title reports and title opinions 13. Review building code compliance and occupancy permits (major tenants only) 14. Review of current uses and any zoning studies, reports or proposals 15. Investment Canada notification 16. Competition Act Pre-Approval 17. As built plans and specifications 18. Review of up-to-date surveys of the Property 19. Review of architectural, structural, roofing, geotechnical, parking lot/structure, electrical, life safety, mechanical as built plans and specifications by consultant and Purchaser/ Asset Manager 20. Review most recent reference plan showing boundaries of the Property 21. Review of all construction contracts including all warranties 22. Building area measurement plans & tenant layout plans 23. Review any valuations and appraisals 24. Obtain & review building inspection reports by engineers, architects and other consultants 25. Obtain endorsement of all building inspection reports 26. Endorsements to purchaser of existing reports 27. Engagement of outside consultant and review any environmental audits, test results, studies or reports 28. Follow up testing and remediation 29. Copies of all certificates, approvals, licences, permits and orders issued by Environment Canada or any provincial environment ministry and details of any recent inspections by those authorities Page 2 / 10

3 30. Copies of all waste generator registrations, details of any wastes generated on the site, where they are disposed of, and identity of the carrier 31. Copies of licences for any pesticides or herbicides used on the property 32. Building inspection reports of friable asbestos, including pipe wrapping, ceiling tiles, sprayed on fireproofing, or acoustical plaster, or flooring 33. Building inspection reports of Urea Formaldehyde Foam Insulation and/or radon 34. Records of any underground storage tanks, including inspections, upgrading, records of tanks removed and removal of any contaminated soil, any information filed with regulatory authorities and acknowledgements received. Page 3 / Details of any spills or other environment incidents reported, and of any civil proceedings for environmental damage brought or threatened against the owners or occupants of the property 36. Details of any criminal or quasi-criminal proceedings for environmental damage brought or threatened against the owners or occupants of the property or their directors 37. Details of ground water and surface water uses in the area 38. Details of waste water discharges, sewer by-law compliance issues, and copies of sewer permits and surcharge agreements 39. Inventory of air emission and any odour release points 40. Details on the emission of air or water pollutants 41. Materials handling information (i.e., products received, inventoried, produced, generated, transported and stored) 42. Details of any PCB s in active use, and details of any PCB waste storage sites on the property, including copies of licences 43. Description of solvents and degreasers used on the property the volumes, storage prior to use, volume of spent solvents generated, and storage, recycling and disposal practices for such spent solvents 44. Details of practices concerning the current or past storage of chemicals or fuels on the site 45. Copies of all policies, practices, procedures and systems in place dealing with the management of environmental, waste

4 Page 4 / 10 reduction and recycling, energy efficiency and related occupational health and safety, product liability and transportation of dangerous goods concerns (e.g., board of directors resolutions, company policies, internal personnel involved, training and education programs in place, use of external experts, on-going compliance review procedures, emergency response programs spills/discharges, fires, accidents, investigations, etc.) 46. Completion of Property Survey 47. Evidence of Insurance Owners, Lenders, Tenants, Third Parties 48. Complete insurer review of: i) standard form of lease ii) mortgage provisions 49. Check earthquake exposure and limits 50. Check Purchaser/ Asset Manager s property limits 51. Review of all existing insurance policies with respect to the Buildings and chattels (including pending claims and claims paid) and inspection reports received from insurance underwriters as to the condition of the assets 52. Review insurance on all vehicles associated with property including site truck(s), tractors and sweepers 53. Review bonding policy on employees and contracted management (if any) 54. Review all permits, consents, licences, certificates, approvals, authorizations, registrations or similar item issued or granted by any governmental authority 55. List of all litigation, actions, orders, investigations, inquiries, liens commenced or threatened affecting the Property 56. Review of service, operations and maintenance contracts relating to the Building 57. Review parking management agreement (if any) 58. Review any management agreements re: ability to terminate

5 59. Confirm whether there has ever been a union 60. Review any collective agreement with legal counsel to sign off 61. Review a list of all outstanding complaints, applications, proceedings, investigations, orders or arbitration or other awards pursuant to any collective agreements or any labour relations, employment standards, occupational health and safety or human rights legislation 62. A list of all Workers Compensation claims, all potential claims, current assessment rates, any actual or potential penalty assessments and the status of Workers Compensation Board accounts 63. Copies of inspection reports, testing results, records of health and safety audits, and minutes of meetings of any health and safety committee for the last 2 years 64. Copies of Employee Handbooks and statements concerning employment-related policies 65. Copies of all releases or agreements with respect to settlements of any potential or actual wrongful dismissal or similar claims arising during the past two years 66. Review of any employees on STD or LTD 67. Review employment contracts 68. Review standard form of lease, offer to lease and license agreements and provide comments 69. Copy each lease for premises in the building including any amendments thereto. Summary of each lease noting special clauses, including renewal options, termination rights, exclusivities, relocation clauses, rights of first refusal, expansion rights, recoveries 70. Compare lease summaries to Proforma 71. List of outstanding costs, tenant inducements and payables with respect to any of the leases 72. Review all current tenant correspondence files 73. Review copies of signed offers to lease and offers to lease that are in process Page 5 / 10

6 74. Review copies of the current rent rolls and roster 75. Draft 5 year lease expiry schedule 76. Review of accounts receivables list and explanation and historical information on any receivable in excess of $10, or 90 days 77. Review list of tenants on abatements, with related documents 78. Review list of tenant disputes, complaints, tenant defaults and breaches 79. Review list of security deposits, prepaid rents, tenant loans, guarantees and letters of credit 80. Review tenant sales information (twelve month summary covering last 3 years) 81. Review parking licence agreements and operating permit (if any) 82. Review any agreements relating to building name, signage including signage leases 83. Review copies of all real estate broker commitments and agreements 84. Review marketing reports in respect of the Property and any marketing materials including site/stacking/lease plans 85. Review current leasing reports 86. Review current budgets (capital and operating) and supporting documentation 87. Review income statements and balance sheets for the last two years 88. Review audited reports, statements, tax billings and operating cost certificates for last two years 89. Assessment and realty tax notices for current year and immediately preceding two calendar year 90. Review assessment appeals for last 3 years 91. Review tenant reimbursements/billings 92. Review copy of the most recent promotion fund statements and tenant/merchant association matters and previous 2 years Page 6 / 10

7 93. If merchants association verify society status and last three years filings 94. Review parking operations data, contracts, and history 95. Review list and description of owned and leased chattels and other assets which are the subject of purchase, and any encumbrances in respect thereto 96. Review Tenant Improvements-Work in Progress 97. Review Capital Improvements Work in Progress Page 7 / 10

8 ADDITIONAL DUE DILIGENCE FOR SHARE ACQUISITION Page 8 / Review minute book, charter documents 2. Corporate organization chart and showing ownership of all outstanding equity securities and vendor s ownership/interest in other ventures 3. Share option agreements/warrants or agreements to purchase or acquire securities of vendor 4. List jurisdictions in which vendor is qualified to do business and particulars 5. Copies of all certificates, permits or other registration documents 6. Shareholder agreements, voting, pooling, put or call agreements 7. Copies of all financial reports, auditors reports 8. Any OSC filings for the past 2 years 9. List of all liabilities including contingent liabilities 10. List any corporate guarantees or indemnities 11. Copies of current year s budget, cash flow and capital programs 12. Copies of any governmental grants or support agreements 13. Details of any non-arms length asset acquisition or disposition to which vendor has been a party in the past 5 years 14. List all trade names, corporate names and business names, jurisdiction and number of registration 15. List trademark applications and registrations of vendor or property 16. List trademark, trade names, industrial design, copyright

9 Page 9 / Licences or distribution or franchise agreements re: intellectual property 18. Copies of all trade secret and non-disclosure agreements including employee and independent contractor trade secret and nondisclosure agreements 19. Copies of all software licences held by vendor or property including web addresses and domain names Create list of all web addresses associated with the property. 20. A list and copies of all material notices, information requests, filings, permits, licenses, approvals and certificates obtained or required to be obtained from federal, provincial, local or foreign government authorities or agencies, or any other approvals or permits required to be held, in connection with vendor s business or property, including expiration date and status 21. Copies of any reports filed with local, provincial, federal or foreign governmental authorities or agencies during the last 3 years, and copies of all correspondence to and from governmental authorities relating to the matters described above 22. List all matters currently under discussion with any local, provincial, federal or foreign governmental authorities or agencies 23. To the extent not disclosed in response to other items, details of all cases of non-compliance or alleged non-compliance with laws, regulations, regulatory policies and rules 24. Copies of all agreements relating to outstanding indebtedness of vendor property 25. Copies of all agreements and instruments evidencing security over any of the assets of vendor relating to property 26. Copies of all assignments of indebtedness, security, options or other similar agreements 27. A schedule detailing intercompany indebtedness owing to or from all affiliates 28. Copies of all guarantees provided to or by vendor or property 29. Copies of federal and provincial tax returns for previous 5 years and all Revenue Canada audit report assessments and reassessments 30. List of all taxes, duties or charges unpaid and details of any failure to file any material tax report or return relating to the business or related to any operations of vendor or property

10 Page 10 / List of any tax matters, including audits, assessments, objectives, waivers or litigation, relating to vendor property currently under investigation by or discussion with Revenue Canada 32. Details of any asset acquisition by vendor which was or will be the subject of an election under section 85 of the Income Tax Act (Canada), including copies of any election forms prepared or filed 33. Details of any corporate reorganization to which vendor has been a party of which resulted in the formation of vendor, including copies of any tax opinions or memoranda in relation thereto 34. A list of all pending or threatened litigation (against or initiated by vendor), arbitration and investigations relating to vendor including: parties, remedies sought and nature of action 35. Copies of pleadings and other relevant documents for all actions identified above 36. Copies of any consent decrees, judgments, etc. under which there are continuing or contingent obligations affecting vendor and its business or properties