Resort due diligence

A buyer under a signed letter of intent on a resort faces a longer and wider diligence list than almost any other hospitality acquisition, because the target is not one licensed business but several, sitting on a substantial piece of land, with obligations to members that outlast the current owner. The work here is largely about confirming that each piece of the bundle is what it was represented to be, on its own terms.

Start with a title search on the underlying land

Because a resort’s land base is itself a significant part of what is being purchased, a buyer’s counsel should confirm registered ownership and every existing charge or encumbrance against the title directly with the land registry — in British Columbia, through the Land Title and Survey Authority’s public search — rather than relying on a seller’s representation of clean title. Other provinces maintain their own land registries with their own search processes, so a buyer acquiring property in more than one province should not assume one province’s search covers land held in another.

Check environmental status amenity by amenity, not property-wide

A resort’s environmental exposure is rarely uniform across the property — a golf course’s water use, a marina’s waterfront operations and any historic fuel storage or maintenance areas each carry their own contamination risk profile, and provincial site-remediation regimes, such as British Columbia’s or Alberta’s, are the mechanism for confirming whether a site has a recorded history of contamination. A buyer should have each amenity area assessed individually rather than accepting a single property-wide environmental statement as covering all of them.

Build a complete inventory of licences and approvals, and confirm transferability of each

Every bundled amenity carries its own licensing and capital profile that must be diligenced on its own, not rolled into one line item — liquor licensing for the hotel and food and beverage side, and whatever separate approval governs the golf course, marina or spa. For each one, a buyer’s counsel needs to confirm not just that the licence currently exists, but whether it transfers with the sale, requires a fresh application under the buyer’s name, or is at any risk of non-renewal, since a delayed or denied amenity licence is one of the more common reasons a resort closing gets held up even when the rest of the deal is ready.

Reconcile the full membership-liability ledger

Where the resort runs a membership or club structure, a buyer should obtain the complete, current membership ledger — every prepaid fee, every guaranteed benefit, every long-term commitment — and reconcile it independently rather than accepting a seller’s summary total, because membership obligations that turn out larger than disclosed become the buyer’s liability the moment the deal closes. This reconciliation is worth doing early in the diligence process, since a materially larger-than-disclosed membership liability can change the economics of the whole deal.

Confirm the seasonal workforce and key relationships will actually continue

A resort typically depends on a significant seasonal workforce recruited on its own annual cycle, and often on a specific key relationship — a management company contract or a golf professional, for example — that the business may lean on more heavily than the org chart suggests. A buyer should confirm directly, rather than assume, that these relationships are willing and able to continue under new ownership, because losing a key seasonal relationship shortly after closing can materially disrupt a resort’s next operating season.

Verify PPSA registrations against amenity equipment

Equipment across a resort’s various amenities — golf-course maintenance equipment, marina infrastructure, spa equipment — should be checked for registered liens under the applicable personal property security regime before closing, the same way any equipment-heavy acquisition would be checked, since an undischarged lien can attach to equipment in the hands of a new owner if it is not cleared as part of the sale.

Pull the technical safety file for every elevating device, boiler and electrical system

A buyer’s counsel should request the inspection and change-of-ownership history for the resort’s elevating devices, boilers and pressure vessels, and electrical systems directly from the applicable technical safety regulator — Ontario’s Technical Standards and Safety Authority, or British Columbia’s Technical Safety BC — rather than relying on the seller’s representation that everything is up to date. An open order on any of these systems is the kind of finding that needs to be priced, resolved or escalated before closing, since it can represent a real near-term capital cost that was not reflected in the purchase price.

Verify inventory across every outlet independently

Because a resort typically operates food and beverage, retail and sometimes a pro shop or marina store as separate inventory pools, each should be independently counted and valued during diligence rather than accepted from the seller’s consolidated figure, which can mask a shortfall in one outlet with a surplus in another. Agreeing on who conducts the count and how it is timed against closing belongs in the purchase agreement itself, not left to be worked out informally once the deal is already signed.