CPACE Legal Framework 2

Question 1

Under PACE financing, the special assessment is attached to which entity?

Accepted Answer

The real property itself

Answer

PACE assessments run with the land as a lien on the real property, not as personal liability of the owner.

Question 2

Which federal law requires lenders to provide loan disclosures and has been debated in the context of PACE residential financing?

Accepted Answer

Truth in Lending Act (TILA)

Answer

TILA disclosure requirements have been a central regulatory debate for PACE programs, particularly regarding whether PACE constitutes 'credit' under the statute.

Question 3

A property owner defaults on a PACE assessment. In most jurisdictions, the PACE lien is treated with what priority relative to a first mortgage?

Accepted Answer

Senior or superior to the first mortgage

Answer

PACE liens typically hold super-priority status similar to property tax liens, placing them ahead of existing mortgage liens.

Question 4

Which California statute is considered the foundational enabling law for commercial C-PACE programs in that state?

Accepted Answer

AB 811 and SB 77 (Improvement Act for Commercial Properties)

Answer

California's AB 811 and its commercial extension SB 77 created the legal framework allowing local agencies to offer PACE financing.

Question 5

When a commercial property with a PACE assessment is sold, who is generally responsible for the outstanding PACE obligation?

Accepted Answer

The new property owner assumes the obligation as part of the property

Answer

Because PACE is a property-based assessment, the obligation transfers to the new owner at sale, similar to property taxes.

(CPACE) Commercial Property Assessed Clean Energy Practice Test

(CPACE) Commercial Property Assessed Clean Energy Practice Test

CPACE Legal Framework 2