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

Legal counsel's enforceability opinion confirms that the assessment is legally authorized, binding, and enforceable under applicable state law.

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

Improvements to historic buildings often require Section 106 review to ensure the project does not adversely affect historic properties.

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

Courts have generally treated PACE assessments similarly to property tax obligations, which hold priority status and survive bankruptcy discharge.

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

An assignment of insurance proceeds ensures that if casualty insurance pays out, the capital provider has a legal claim to those funds to satisfy the outstanding assessment.

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

PACE assessments are placed on the property tax bill and collected by the county tax authority, which then remits funds to the program administrator.

(CPACE) Commercial Property Assessed Clean Energy Practice Test

(CPACE) Commercial Property Assessed Clean Energy Practice Test

CPACE Legal Framework 5