Humber/Ontario Real Estate Course 2 Exam Practice

What is the focus of a Due Diligence review during a commercial property transaction?

1. Ensuring compliance with all zoning laws

2. Obtaining a thorough environmental assessment

3. Reviewing historical financial performance

4. Reviewing lease agreements

5. Verifying that all building permits are current

6. All of the listed factors

The correct answer is: All of the listed factors

During a Due Diligence review in a commercial property transaction, it is essential to consider various aspects to ensure a thorough evaluation of the property. This includes examining compliance with zoning laws to verify that the property's use aligns with local regulations. Additionally, a comprehensive environmental assessment is crucial to identify any potential environmental hazards or liabilities associated with the property. Reviewing the historical financial performance of the property is critical in understanding its income-generating potential and assessing its overall financial health. Examining lease agreements is important to determine the existing rental income, lease terms, and any potential risks related to tenant agreements. Verifying that all building permits are current ensures that any renovations or constructions on the property were done legally and comply with building codes. Therefore, the correct answer is F - All of the listed factors, as they collectively contribute to a thorough Due Diligence review in a commercial property transaction.