CPACE Legal Framework 5

Question 1

Which type of legal opinion is typically required at closing of a C-PACE transaction to confirm the program's validity?

Accepted Answer

Enforceability and legality opinion from qualified legal counsel

Answer

Environmental compliance opinion from a licensed engineer

Answer

Fairness opinion from a registered investment advisor

Answer

Zoning compliance certification from the local planning department

Question 2

A C-PACE project involves a historic building. Which additional regulatory framework must typically be satisfied alongside PACE requirements?

Accepted Answer

National Historic Preservation Act (NHPA) Section 106 review

Answer

FHA Section 8 housing regulations

Answer

Americans with Disabilities Act accessibility standards only

Answer

OSHA construction safety plan approval

Question 3

In the event of bankruptcy, how are PACE assessments generally treated under the U.S. Bankruptcy Code?

Accepted Answer

As secured claims with potential super-priority similar to tax liens, often survives bankruptcy

Answer

As unsecured general creditor claims with no priority

Answer

As automatically discharged upon bankruptcy filing

Answer

As subordinate claims behind all other secured creditors

Question 4

Which contractual provision in a C-PACE agreement protects the capital provider if the property is destroyed and insurance proceeds are collected?

Accepted Answer

Insurance proceeds assignment or collateral assignment of insurance

Answer

Force majeure clause eliminating all obligations

Answer

Subrogation waiver releasing all claims

Answer

Arbitration clause routing disputes to AAA

Question 5

Under most state C-PACE enabling statutes, which body is responsible for annually levying and billing the PACE assessment to the property owner?

Accepted Answer

The county tax assessor or tax collector

Answer

The private PACE capital provider

Answer

The state energy office

Answer

The federal Department of Energy

Question 6

A C-PACE program administrator knowingly finances a project on a property with an undisclosed federal tax lien. What is the likely legal consequence?

Accepted Answer

The federal tax lien may prime the PACE lien because federal law generally takes precedence

Answer

The PACE lien automatically supersedes the federal tax lien by statute

Answer

The PACE lien is voided and the property owner is solely liable

Answer

There is no consequence because federal tax liens only affect personal property

Question 7

Which disclosure document must C-PACE program administrators provide to property owners to ensure informed consent under most state program rules?

Accepted Answer

Program disclosure or assessment contract summary outlining terms, total cost, and lien consequences

Answer

HUD-1 Settlement Statement identical to mortgage closings

Answer

IRS Form 1099-INT reporting interest income

Answer

FEMA flood zone determination certificate