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DUE DILIGENCE IN COMMERCIAL REAL. .

ESTATE TRANSACTIONS

These materials were preparedbyStuartWicijowski,ofMcDougall Gauley law firm Regina;Saskatchewan for th~ Saskatchewan Legal Education Society Inc. seminar, Commercial Real Estate;March 2004. . .

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Table of Contents.

I. Introduction/Scope 2II. Nature of Commercial Real Estate Due Diligence 2m. Communicationwith Clients and Allocation of DueDiligence Tasks 2IV. Due Diligence Checklist 3V. Scope of Due Diligence , : 3

1. Factors to be ·Considered 4VI. Alternatives to Due Diligence ' : 4

1. Officer's Certificates 52. Reserve Escrow 53. "Carve-Out" Indemnity Agreements 54. Letters of Credit 65. Title Insurance 6

VII. Specific Due Diligence 61. Selected Searches 62. Document Review 113. Third Party Reports 12

Precedent -Due Diligence Checklist 14Precedent - Consent to· Release Information 22

I.

·Due Diligence inCommercial Real Estate

Transactions

Introduction/Scope

This paper is prepared from the point of view of a solicitor acting for a purchaser. Thepurchaser's solicitor will generally conduct the most extensive transactional due diligence.Further, the purchaser's solicitor may to be called upon to provide an opinion to the purchaser'smortgagee, generally necessitating additional·due diligence.

On occasion, real estate is acquired through the acquisition of a single-purpose corporate entitythat holds title to the land. This is becoming more common-place in Saskatchewan for largecommercial properties as a result of the much higher Land Registry fees now payable on transferof such properties. Some of the due diligence referred to in this paper is particularly relevant to atransaction structured in this way [but more from the point-of-view of~he single-asset corporationbeing a bare trustee of the lands, and not the beneficial owner].

II. Nature of Commercial Real Estate Due Diligence

Due diligence in commercial real estate transactions can be generally grouped into three types:

1. Searches and enquiries of registries and public offices;2. Review of relevant documents and agreements; and3. Investigations - generally by professional third party consultants such as engineers,

appraisers, and surveyors.

III. Communication with Clients and Allocation of Due.Diligence Tasks

Communication with clients is essential to productive and efficient due diligence. Due diligencecan be very expensive for clients, and some due diligence may provide only limited benefit or riskreduction to the client. Lawyers who do not advise their clients on the costs and benefits ofdifferent types of due diligence are doing a disservice to their clients. For example, your clientmay not need a lawyer to read and summarize every lease relating to the property, at $200.00 per.hour or more. Perhaps they can primarily rely on a combination of their own review, a review bya third party real estate professional, and estoppel certificates from tenants. It might be morepractical for the lawyer to be called upon to review the major leases and to deal with issues andconcerns raised by the client or its real estate consultant. .

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Your communication with your client should make it clear who is responsible for engaging thirdparty consultants, such as appraisers, surveyors, engineers and accountants. In this regard, youmust specify whether you are to review the engagement letters with such thirdparties to ensurethe appropriate scope of the services to be provided. You should be recommending to your clientthat you review such third party reports in order to give the client appropriate advice on theinformation provided. Such a review also gives you a better perspective on the "big picture" ofthe property and any possible concerns, issues, or pitfalls that could cause delays or problems onthe closing.

The client needs to make the ultimate call .on the scope of the due diligence to be conducted bythe solicitor, based upon the advice of the solicitor. Clients should be free to limit the scope ofthe services to be provided by their solicitors, but the solicitor must ensure that his advice and thescope of his retainer are properly documented in order to avoid liability. .

It is good practice to note the allocation of tasks (among the solicitor, client and third party.professionals) or any decision to dispense with a particular due diligence item, directly on the due.diligence checklist discussed below.

Sometimes we are faced with a "seat-of-the-pants" or "cheap" client who does not see the valuein due diligence. If a lawyer is instructed to dispense with critical due diligence items, a lettermust go to the client confirming the instructions and clearly setting forth the potentialimplications ofthis action. [In extreme cases, where the client appears to be acting recklessly andignores the solicitor's recommendations, withdrawal from the file should be considered.]

IV. Due Diligence Checklist

Every good due diligence regime starts with a checklist. A comprehensive checklist is attached tothis paper for reference. Certain properties mayhave specific additionalitems requiring duediligence based on their location or use. The attached checklist is for a typical commercialproperty.. The checklist is an essential tool to track your progress and ensure nothing fallsthrough the cracks. It also gives you a quick "one-stop" reference for all due diligenceinformation.

The checklist may be the first and last document prepared in any comrtlercial real·estatetransaction. It will be a work-in-progress, right up to the time of closing. Items will be added asissues and documents come to light. Each version of the list should be tracked and identified witha copy being maintained on your file. The list should be periodically shared with and discussedwith the client, and any new instructions or advice to the client should be documented with theappropriate notation made directly on the checklist for ease of reference. Have your client signoff on the checklist, bye-mail or other acknowledgment. This should be done following anyupdates or changes, in particular, changes to the allocation of tasks set forth on the checklist.

V. Scope of Due Diligence

The client, in consultation with their solicitor, will make the decision on the scope ofthe duediligence to be performed.

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1. Factors to be Considered.

Sometimes property is sold on an "as-is, where-is" basis with no representationsand warranties whatsoever, except perhaps as to title, due authorization, andpower and capacity of the seller to convey title. This is typical in sales ofproperties after foreclosure, or ~ales by receivers and trustees in bankruptcy. Insuch circumstances, the buyer takes considerable risk if extensive due diligence isnot conducted. Therefore, the ~olicitor should recommend to their client anextensive and detailed due diligence regime.

On the other hand,. if it is possible to obtain substantial representations andwarranties from the seller, and the seller has the financial wherewithal andreputation to back up such representations and warranties, the risk of reduced duediligence can be substantially mitigated. In certain cases, an escrow account maybe set up to hold a portion of the purchase price for a period of time. Thepurchaser will then have the opportunity to take possession of and operate theproperty. Presumably within the specified period (a year for example) thepurchaser will discover whether any of the representations and warranties wereinaccurate.

The location of the property and its current use are also factors that affect theextent to which the due diligence should be conducted. For example, undevelopedfarm land is considered much less risky than existing industrial sites, or urbanlands that have had former commercial uses. Many due diligence searches wouldbe of little value with respect to farm land that has never been used for any otherpurpose.

VI. Alternatives to Due Diligence

Nothing is a complete substitute for doing your own due diligence as insurance claimsand claims for breaches of representations and warranties can be subject to manyuncertainties and roadblocks, including:

i. proving the breach or loss;ii. ability of the Defendant to pay a judgment or coverage issues in the case of

insurance;iii. warranties and representations are often based on "best of knowledge" - the

requisite knowledge may not exist or be difficult to prove;iv. legal costs and the delays inherent in the legal process; andv. unprovable or unrecoverable losses, such as consequential damages.

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However, sometimes extensive due diligence is prohibitively expensive or impracticaldue to lack of time. In such cases, consideration can be given to alternatives to certainelements of the standard due diligence regime. Earlier in this paper, reference was madeto obtaining extensive warranties and representations from the seller. Some other optionsinclude:

1. Officer's Certificates

Earlier we discussed how the use of extensive warranties and representations canreduce the need for extensive due diligence. Such warranties and representationsare often backed up by Officer's Certificates. A sample Officer's Certificate isattached to The Closing - Documents and Surrounding Issues paper. SometimesOfficer's Certificates will be given by the officer in their personal capacity. Insuch case, the seller may have personal recourse against the officer. In mostcases, however, the officer will insist that the Certificate is given only in hiscapacity as an officer of the company. This may have the effect of reducing oreliminating the officer's personal liability. However, one would expect an officerto take much more care in signing an Officer's Certificate than he might in signingan agreement as a signing officer on behalf of the company where there ispotential for personal liability. Officer's Certificates will generally also coversuch items as corporate status, and power and capacity.

2. Reserve Escrow

Also discussed above was the use of a reserve escrow account to fund liabilities,either discovered post-closing, or that become quantifiable post-closing. Typicalexamples are maintenance and repair issues, such as a major roof replacement,pending tax appeals, contingent liabilities in such things as tenant disputes orencroachments. A sample agreement is attached to the following paper.

3. "Carve-Out" Indemnity Agreements

Even where a property is sold "as is, where is", specific items might be "carvedout" of the absolute exclusion from liability presumed by an "as is, where is"clause. Environmental matters are the most common issue dealt with by suchagreements. Often mortgagees will ask for a carve-out on environmental issues,even where the mortgage is non-recourse (i.e. no covenant of the borrower).Purchasers and mortgagees will often ask for joint liability of parent companies onsuch carve-out indemnities, rather than relying on the covenant of a one-assetholding company. A precedent agreement is attached to the following paper.

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) 4. Letters of Credit

Letters of credit can be posted to deal with specific contingent liabilities orliabilities that are not yet quantifiable. They are used in a similar manner as. thereserve escrow accounts referred to above.

5. .Title Insurance

Title insurance can reduce the need for extensive due diligence and can provideprotection, within policy limits, for title defects, access issues (to roadways, forexample), zoning issues, and encroachments. Although title defects have nothistorically been of great significance in Saskatchewan in light of our Torrenssystem, this may become a larger issue in the future as errors resulting from theconversion to the LAND system come to light over the coming years, and limitson the assurance fund leave land owners and interest holders at risk.

Keepin mind that title insurers still require some due diligence searches, and willusually require a title report and off-title searches to be conducted prior to issuingany policy for a large commercial property. They may be willing to accept out-of­date search results that might not be normally accepted by a mortgagee, forexample..

VII. Specific Due Diligence

1. Selected Searches

The following are selected searches typical on commercial real estate transactions:

a. Land Registry

1. Title prints for all surface and mineral parcels affected by the. transaction. Review each title to confirm ownership, legal

description, encumbrances. Make note of any unusual notations suchas locks and ties.

11. Obtain copies of all registered encumbrances not being discharged.Review encumbrances and provide copies, with summaries, to client.Investigate any issues that arise. For example, if caveat refers torights under an agreement that is not attached, obtain a copy of theagreement. Review all encumbrances.·Do not assume that you knowthe nature of an encumbrance such as a standard utility easement or alease by a tenant that is being accepted by the purchaser. There isalways a possibility that the registration will relate to somethingunexpected.

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iii. Do a name search in the name of the vendor to determine what otherlands they own. This could assist in identifying additional parcels notincluded in the legal description provided, such as parking lands orextra parcels created on conversion to the LAND system. A box canbe checked to search proximity names. This is recommended.

iv. Parcel pic search to broadly determine the location of the variousparcels and their orientation to each other. This will also assist inconfirming the legal description.

v. Copy of registered plan. This will assist in verifying the legal.description and the location and orientation ofthe parcels.

vi. Writ Registry searCh in the name ofthe vendor and the purchaser.This will identify any writs which could potentially affect your title ordelay your closing.

. .b. Personal Property Registry

1. Search the name of the vendor.2. Search the name of the vendor's business name (such as "Southland

Mall", or "Regina Inn").3. Serial number search on any vehicles to be included in the

transaction.4. Search ofthe purchaser's name if opinion to mortgagee's counsel is

anticipated.

c. .Bank of Canada Search for Assignments under Section 427

d. Industry Canada - Bankrupty Branch -Bankruptcy Search forassignments or petitions in bankruptcy.

e. Action Searches from Applicable Judicial Centres in the Name of theVendor - These results will often reveal interesting issues for furtherfollow-up, including tenant disputes, tax appeals and disputes with adjacentland owners. Occupier liability lawsuits or nuisance claims could revealinherent problems with the property that invite litigation or will make itdifficult to obtain insurance.

f. Sheriff's Office at applicable Judicial Centres - This will disclose writslodged with the Sheriff, but for some reason do not appeared in theSaskatchewan Writ Registry. Such writs cannot obtain priority over aregistered interest, but the existence ofsuch writs at the Sheriffs office mayalert you to other issues. It may also help you find writs that are not in theexact name of the registered owner.

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g. Muncipal Taxation Department - Obtain an on-line or oral real propertytax search and order a Tax Certificate to determine arrears of taxes, currenttaxes, and local improvement assessments. An inquiry should also be madeto the municipality regarding any off-site levies. Such levies might only

.become payable upon application for a building permit to· pay for suchthings as thoroughfare construction and water and sewer lines to service theproperty that were pre-bu~lt by the city in advance of development. Theseitems are unlikely to appear on the Tax Certificate.

h. Saskatchewan Finance - Revenue Division (Consent Needed) - Searchunder The Revenue and Financial Services Act as to status of accounts .under miscellaneous revenue·statutes, including PST, liquor consumptiontax and corporation capital tax. A Clearance Certificate under Section 51(2)of The Revenue and Financial Services Act may be obtained post-closing.

1. Worker's Compensation Board - Request a letter of good standingregarding the vendor's accounts. A Clearance Certificate may also beobtained post-closing (consent required).

J. . Regional Health Authority - Public Health Inspections - Obtain a letterof good standing and disclosure of any outstanding orders.

k. Saskatchewan Corrections and Public Safety - Licensing andInspections - Obtain letter confirming there are no outstandingcontraventions or orders under the following acts:

1. The Boiler and Pressure Vessel Act;ii. The Electrical Licensing Act;

iii. The GasLicensing Act; andiv. The Passenger and Freight Elevator Act.

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1. Saskatchewan Labour Relations Board - Obtain letter confirming nooutstanding applications or orders.

m. SaskatchewanLabour Standards Board - Obtain letter confirming nooutstanding complaints.

n. Business Corporations Branch

i. On-Line Profile Report for Vendor and, if necessary, Purchaser;ii. Certificate of Status for Vendor and, if necessary, Purchaser; andiii. Microfiche of the Corporate Records for the Vendor and, if necessary,

the Purchaser.

o. Saskatchewan Environment and Resource Management - EnvironmentalSearch as to outstanding notices of contravention, complaints,investigations, outstanding work orders, or other proceedings. This can take30 - 45 days. Consider deleting this as duplicative if an environmentalreport is being obtained from an environmental engineer.

p. Saskatchewan Land Surveyor - Obtain an updatedreal property reportfrom a Saskatchewan Land Surveyor. Carefully review the Surveyor'sCertificate to confirm the legal description, the location and orientation ofthe buildings, proper setbacks, encroachments, access, and location andconflict With any easements.

q. Municipal Urban Planning

1. Obtain a Building Siting Certificate and Zoning Certificate ormemorandum from the municipality. A copy of the current Surveyor'sCertificate will be required by the municipality.

ii. Confirmation as to zoning classification lawful uses of the property,. andwhether it is designated as a heritage site.

111. Confirmation from the municipality that the property confirms toparking regulations.

IV. Confirmation that there are no outstanding obligations undersubdivision or development agreements with the municipality.

r. Municipal Building Department

i. Confirmation from the municipality that there is no outstanding workorders or notices.

11. Confirmation that an Occupancy Permit or Certificate has been issuedfor the property.

iii. Request new inspection.

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s. SaskPower Gas Inspector - Obtain letter confirming that there are nooutstanding compliance issues under The Gas Inspection Act (consentneeded)..

t. SaskPower Electrical Inspector - Confirmation under The Electrical·Inspections Act that there are no outstanding compliance issues oroutstanding utility charge~ (consent needed).

u. SaskEnergy - Confirmat~on of any outstanding work orders andoutstanding invoices for utility charges (need consent).

v. Municipal Fire Department - Request new inspection and letter of goodstanding disclosing any outstanding work orders.

w. Municipal Water Department - Confirmation of any outstanding invoices(need consent).

x. Saskatchewan Liquor and Gaming Authority - Obtain a letter confirmingany liquor licenses on the premises or outstanding orders.

y. Municipal By-Law Enforcement - Search as to any outstandinginfractions.

z. Saskatchewan Government Insurance -·Search for any vehicles owned bythe vendor that might be included with the property such.as maintenance orsecurity vehicles (consent required).

aa. Saskatchewan Securities Commission - Obtain letter confirming nodefaults or pending proceedings if acquiring corporation's shares.

bb. Canada Revenue Agency - Information re: status of account regardingsource deductions, GST and income tax (consent required).

cc. Occupational Health and Safety Branch - Obtain letter regardingoutstanding orders, infractions, or complaints. .

dd. SaskEnergy - Legal Department ~ Property's compliance with right ofway or easement agreements and information re: utilities (unregisteredeasements are only applicable in rural areas).

ee. SaskPower- Legal Department - Property's compliance with right of wayor easement agreements and information re: utilities (unregisteredeasements are only applicable in rural areas).

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ff. SaskTel- Legal Department - Property's compliance with right of way oreasements agreements and information re: utilities.

gg. Saskatchewan Human Rights Commission - Obtain a letter re:outstanding complaints or investigations.

hh. .Determine whether part VI of The Saskatchewan Farm Security Act applies.That is, is there restrictions on ownership as a result of the purchaser being acorporation or resident outside of Saskatchewan? ·If the farm ownershiprules apply, determine whether an exemption order can be obtained.

ii. Determine whether aJicense is required under The Agricultural OperationsAct, which applies to such operations as large, intensive livestock facilities.Determine if a license has been obtained, and the requirements to transfersuch license.

jj. Search for registration and ownership of business name (CorporationsBranch) or trade mark or trade name (Canadian Intellectual PropertyOffice).

2. Document Review

The following are some of the typical documents one should anticipate reviewingwhen actingfor a purchaser in a commercial real estate transaction: .

a. Leases

Obtain estoppel certificates from all major tenants and as many of the othertenants as possible. Obtain a certificate of the vendor for any estoppelcertificates not obtained. Estoppel certificates should be directed to thepurchaser and its mortgagee and should disclose the essential lease terms,including any rights or early termination, rights to set off rent, rights toabate rent, pre-paid rents, exclusive use rights, exclusive parking rights,expansion rights, and rights of first refusal on additional space, andexistence of any outstanding leasehold improvement allowances.

On instructions of the client, leases, in particular major leases, should bereviewed to confirm consistency with estoppel certificates or landlordcertificates, and to note any other unusual provisions that would not becaught by the estoppel certificate.

b. Restrictive Covenant Agreements - Review any agreements that restrictthe use of the land.

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c. Property Management Agreement - Review the Property ManagementAgreement, in particular the business terms and termination rights if theproperty manager is to be retained.

d. Review all easements registered on the land,and all easements registeredon all other lands where the lands being acquired are the dominanttenement. Confirm registration of easements on other land by conducting aland registry search.

e. Parking Agreements - Review all parking agreements with themunicipality or adjacent land owners to confirm thatadequate parking hasbeen provided for and that there are no unreasonable requirements.

f. Zoning and Development Agreements - Review all agreements with themunicipality to ensure compliance and confirm there are no unreasonablerequirements.

g. Service Contracts - Review all service contracts for suppliers, if they willbe assumed.

i. Property Taxes - Review the legal documentation surrounding any pendingtax appeals.

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h. Warranties - Review all construction and maintenance warranties that arestill subsisting.

j. Plans and Specifications - Review on instructions of client if third partyprofessional has not been retained.

k. Employment Contracts - Review contracts for any employees beingassumed by purchaser.

1. All Other Material Contracts

m. Minute Books - Review minute books to confirm due authorization,authority and due execution.

3. Third Party Reports

For each of the following types of reports, determine from the client who will beretaining the third party, whether a solicitor will be asked to review and commenton the retention letter or contract, and whether the solicitor will be asked to reviewand comment on the report produced by the third party:

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a. Environmental Engineering Report and Soil Engineering Report

b. Building Engineer's Report • Inspect roof, mechanical systems, andgeneral state of repair of land and buildings.

c. .Insurance Consultant's Report..., Insurance consultants should ensure thatthe building can be insured at a reasonable premium.

d. Land Surveyor - Obtain up-to-date Real Property Report

e. Appraisal - An appraisal will be required by the purchaser's mortgagee.

f. Leasing or Real Estate Consultant - Review of leases.

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Revised.

Precedent - Due Diligence Checklist

File No.•

. Due Diligence Searches - as at ., 2004

Civic Address: .; Regina, SKName of Business: •

Vendor's Name: • ("Company")Purchaser's Name: • ("Purchaser")

OFFICE WHERE DOCUMENT ORDERED REC'D SENT TO DESCRIPTION OF SEARCH RESULTI.REQUEST MADE REQUESTED (DATE) (DATE) CLIENT COMMENTS - -

(DATE)1. Land Registry a. Title Print

b. Search and printoutof each instrumentregistered against realpropertyc. Saskatchewan WritRegistry (in name ofthe Company and. .

Purchaser)d. Search ofRegistered OwnersName to locate anyadditional parcelse. Parcel pic search tolocate parcels

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OFFICE WHERE DOCUMENT ORDERED REC'D SENT TO DESCRIPTION·OF SEARCH RESULT/REQUEST MADE REQUESTED (DATE) (DATE) CLIENT COMMENTS

(DATE)f. Copy of registeredplan

2. Personal Property a. Search on theRegistry Company, and

Purchaser, if necessaryb. Search on BusinessName

3. Bank of Canada Search on theCompany

4. Industry Canada, Bankruptcy Search onBankruptcy Branch, the CompanyOttawa5. Action searches a. Certificate for actionfrom applicable search under the nameJudicial Centre(s) of the Company

b. Copy of pleadings6. Sheriff at applicable a. Sheriffs certificateJudicial Centre(s) for writs of execution

under the name of theCompany

7. Municipal Taxation a. Real Property taxDept. search oral or on-line

search, plus order TaxCertificate (can takeseveral weeks),including any localimprovement chargesaccrumg.

8. Saskatchewan a. Revenue and. Need ConsentFinance Revenue Financial Services Act

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OFFICE WHERE DOCUMENT ORDERED REC'D SENT TO DESCRIPTION OF SEARCH RESULTIREQUEST MADE REQUESTED (DATE) (DATE) CLIENT COMMENTS

(DATE)Division (search as to status of

payments under misc.prov statutes -Provincial Sales Tax,Liquor Consump.,etc.); and CorporationCapital TaX searchb. Revenue and only available post-closing (Need Consent)Financial Services ActCertificate for Vendor -(s.51(2))

9. Workers' a. Consent letter from Need ConsentCompensation Board the Company(see s. 155 of Act)

b. WCB letter of goodstanding (consent notrequired)c. Clearance will only be available post-closing (Need consent)Certificate

10. Regional Public General search onHeath Authority - property and letter ofInspections good standing11. Saskatchewan a. The Boiler andCorrections and Public Pressure Vessel ActSafety - Licensing and searchInspections re:outstanding orders orcontraventions under: -"

b. The ElectricalLicensing Act search

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OFFICE WHERE DOCUMENT ORDERED REC'D SENT TO DESCRIPTION OF SEARCH RESULTIREQUEST MADE REQUESTED (DATE) (DATE) CLIENT COMMENTS

(DATE)c. The Gas LicensingAct searchd. The Passenger andFreight Elevator Actsearch

12. Saskatchewan Certificate re:Labour Relations outstandingBoard applications I orders13. Saskatchewan Letter re: noLabour, Labour outstanding complaintsStandards Branch14. Business a. Profile Report on theCorporation Branch Company

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b. Certificate of status -

.for the Companyc. Microfiche of theCompany's corporaterecords

15. Saskatchewan Environmental searchEnvironment & as to orders, etc. (30 toResource Mgmt. 45 days)16. Surveyor Surveyor's.Certificate

I Real Property Report17. Municipal Urban a. Building SitingPlanning Certificate and Zoning

Certificate orMemorandum (needSurveyor's Certificate)b. Confirmation as tozoning classification,

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OFFICE WHERE· . DOCUMENT ORDERED REC'D SENT TO DESCRIPTION OF SEARCH RESULT!REQUEST MADE REQUESTED (DATE) (DATE) CLIENT COMMENTS

(DATE)lawful uses of propertyand whetherdesignated as aheritage sitec. Confirmationproperty conformswith parkingregulationsd. Enquiry re:obligations outstandingfrom subdivisionapproval

18. Municipal a.· Confirmation fromBuilding Deparment municipality of no

outstanding workorders or noticesb. Occupancy permit!certificate

19. SaskPower The Gas Inspection Need consentSuperintendent Gas Act search letterInspector20. SaskPower The Electrical Need consentSuperintendent Inspection·Act searchElectrical Inspector letter21. SaskPower Outstanding invoices Need consent

(need consent of theCompany)

22. SaskEnergy Work orders Need consentoutstanding andoutstanding invoices

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OFFICE WHERE DOCUMENT ORDERED REC'D SENT TO DESCRIPTION OF SEARCH RESULTIREQUEST MADE REQUESTED (DATE) (DATE) CLIENT COMMENTS

(DATE)(need consent of the·Company)

23. Municipal Fire Letter of good standingDepartment24. Municipal Water Water invoices Need consentDepartment outstanding (need

consent of theCompany)

25. Saskatchewan Search as to licensesLiquor and Gaming and outstanding ordersAuthority26. Municipal Bylaw Search astoEnforcement outstanding orders27. Saskatchewan Vehicle searchGovernment Insurance (consent required)28. Saskatchewan No-default certificateSecurities Commission29. Canada Revenue Information re:Agency compliance with

source deductions andthe Excise Tax Act(GST) (need consentof the Company)

30. Occupational Letter re: noHealth and Safety outstanding orders or

complaints31. SaskEnergy Legal Property's complianceDepartment with right of way or

easement agreementsandinformation re:

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OFFICE WHERE DOCUMENT ORDERED REC'D SENT TO DESCRIPTION OF SEARCH RESULT/REQUEST MADE REQUESTED (DATE) (DATE) CLIENT COMMENTS

(DATE)utilities

32. SaskPower Legal Property's complianceDepartment with right ofway or

easement agreementsand information re:utilities

33. SaskTel's Legal Property's complianceDepartment with right of way or

easement agreementsand information re:utilities

·34. Material Contracts(including building

.....

and maintenance -

contracts) .

35. Human Rights OutstandingCommission complaints /

investigations36. The Saskatchewan Determine whetherFarm Security Act Part VI of the Act

applies and whether anexemption order canbe obtained

37. The Agricultural Determine'whether aOperations Act . license is required

under the Act

Third Party Reports38. Environmental'

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OFFICE WHERE DOCUMENT ORDERED REC'D SENT TO DESCRIPTION OF SEARCH RESULTI .REQUEST MADE REQUESTED (DATE) (DATE) CLIENT COMMENTS

(DATE)Engineering Reportand Soil EngineeringReport39. Building Inspection of roof,Engineer's Report mechanical systems,

and general state ofrepair of land andbuildings.

40. Insurance Ensure that theConsultant's Report building can be insured .

at a reasonablepremium.

41. Land Surveyor42. Appraisal ' Appraisals will be

. required by thePurchaser'smortgagee.

43. Leasing or Real Review of leases.Estate Consultant

Documents:

DOCUMENT RECEIVED FROM DATE REC'D SENT COMMENT ON DOCUMENTREQUESTED DATE TO

CLIENT(DATE)

44. Leases

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-._-~

OFFICE WHERE DOCUMENT ORDERED REC'D SENT TO DESCRIPTION OF SEARCH RESULTI

REQUEST MADE REQUESTED (DATE) (DATE) CLIENT COMMENTS(DATE)

45. RestrictiveCovenant Agreements46. PropertyManagementAgreement47. Easementsregistered on the landand all lands whereland acquired isdominant tenement48.ParkingAgreements49. Zoning andDevelopmentAgreements50. Service Contracts51. Warranties52. Property Taxes53. Plans andSpecifications54. EmploymentContracts55. All other materialcontracts56. Minute Books

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Precedent - Consent to Release Information

CONSENT TO RELEASE OF INFORMATION

TO WHOM IT MAY CONCERN:

Dear Sirs:

Re: •

•. . Please accept this letter asyour full warrant and authority to release any

information respecting the company and property noted above to Messrs. • [Insert solicitor'sname and address].

This consent, authorization and instruction applies to all municipal, provincial andfederal government offices including, without limiting the generality of the foregoing, thefollowing:

(a) Saskatchewan Workers' Compensation Board;

(b) the Revenue and Financial Services Act: respecting the status of thecompany's tax indebtedness under miscellaneous statutes;

DATED this __ day ofe, 2004.

•Per:

Name:Title:

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