Pledge Agreement Due Diligence

In the agenda package for the LTC meeting tomorrow, Thursday January 27, 2011 there is a "pledge agreement" between Potlatch Properties Ltd. and the Gabriola Health Care Foundation that is being presented. 

Here are notes from a conversation with a real estate attorney regarding this "agreement":

·  Why is the document not dated?  It is not valid if it is not dated.

• Who signed the document?  What are their names and why are they not printed on the document?  Do these people actually represent the parties they claim to, that is Potlach Properties Ltd. and Gabriola Health Care Foundation?  If not, the document is useless.  Who witnessed the signatures?  We need their names and contact information to ascertain that these are actual signatures, validly obtained.  Why is there no corporate seal attached to a document of this significance?
• What is the legal description of the land being pledged?  We have the legal description of the total parcel, but not that of the actual piece being pledged.  All we have is a drawing with a black square outlined, but no specific legal description of it.  Too easy for the donor to change his mind, move the lines, or deny it altogether.
• Owner (pledgor) should be the one who undertakes the subdivision, then we would have a legal description of the land in question and would actually know what we were talking about.  The pledgee could then register a caveat against it in the agreement and have some legal power. Right now, we just have a black line in the approximate location of where we think the land might be.
• What proof do we have that Potlach Properties Ltd. actually owns the land?  Could it be held by the donor personally, or by one of his other corporations, or by someone else altogether?
• What bankruptcy searches have been undertaken to ensure that the holder of the land is not facing bankruptcy charges, either here or in the US, which could result in loss of the land?
• What court searches have been undertaken to determine who might be suing the landholder or anyone associated with him or his corporations, which could result in loss of the land?
• Has there been a search undertaken to prove that the property taxes have been fully paid to date?  If not, the land could be seized.  
• Has there been a corporate search undertaken to ensure that Potlach Properties Ltd. is indeed a corporation in good standing according to Canadian law?  Are they properly registered, with all corporate taxes paid to date, and year end reports duly filed?
• Is there an assurance in the agreement that the property in question will not be sold to another party during the five year term of this Pledge Agreement?  If not, and a sale should occur, do the terms of the agreement still stand?
• Who is the attorney representing the GHCF, and thus representing the community of Gabriola, in this endeavour?  If they want our support, we need to know they are adequately represented and advised by appropriate legal counsel.

We have it on authority from two lawyers that they have never heard of a pledge agreement and that it appears to come from an American source.