Environmental
What is 'environmental due diligence' in Kansas commercial real estate transactions?
AA required inspection for residential properties only
BThe investigative process (Phase I and II ESAs) a buyer conducts to assess environmental liabilities before purchasing commercial or industrial property✓ Correct
CA government inspection before property sale
DA title insurance endorsement for environmental claims
Explanation
Environmental due diligence involves Phase I (records review and reconnaissance) and, if needed, Phase II (sampling) assessments before purchasing commercial/industrial property, helping buyers identify and price environmental liabilities under CERCLA.
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Key Terms to Know
Title Insurance
Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Transfer TaxA tax imposed by state or local governments when real property ownership is transferred, typically based on the sale price.
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