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Real Property Aquisition

PURPOSE

The purpose of the directive is to establish administrative procedures for the acquisition of real property either by purchase, exchange, donation, lease, or other means.

APPLICABILITY

This administrative procedure applies to all real property acquired by the Board of Education, City of Albuquerque, New Mexico, acquired for school, administrative or operational purposes.

Real property is defined as the interests, benefits and rights inherent in the ownership of real property. This includes land, permanent buildings and fixtures, site improvements, water rights, access rights, rights of way and leases.

MONITORING AGENCY

The Real Estate Department will manage and implement all provisions of the directive.

PROCEDURE

All real estate acquisition shall be initiated by the Real Estate Director, District Superintendent, or by the Board of Education. All real property acquisition proposals shall be directed to the Real Estate Director for review and response.

Specific procedures include the following:

  1. All real property acquisitions by purchase, exchange, donation, lease or other means shall comply with New Mexico State statutes.
  2. The acquisition of real property by purchase, exchange, donation, lease or other means is not subject to the provisions of the New Mexico State Procurement Act.
  3. In those cases where real property estimated to be $5000.00 or more in value is acquired, the following provisions apply:
    1. Acquisition of real property by purchase, exchange or donation will be general warranty deed. A general warranty deed is always required except where the provision is waived by the Real Estate Director.
    2. In some circumstances, acquisition of real property by special warranty deed or quitclaim deed is acceptable. Examples where a quitclaim deed may be acceptable are the acquisition of real property by donation, by tax deed, or from another government entity.

The Board of Education owns and acquires real property for school, administrative and operational purposes. In addition, real property may be acquired for strategies planning purposes as described in APS Procedural Directive New School Site Selection, Process and Criteria.

When acquiring real property by purchase, exchange, or donation, the Real Estate Director may secure professionally prepared appraisal reports estimating the market value of the real property being considered for acquisition as of a specific date. The Board of Education may waive securing an appraisal report.

Real Property Appraisal reports shall be secured from qualified real property appraisers licensed or registered in the State of New Mexico. The report shall comply with requirements of State of New Mexico statutes and regulations.

In the case of low-value real property acquisitions of less than $5000.00, donations and tax property acquisitions, real property appraisal reports are not required.

The Real Estate Director may secure as many real estate appraisal reports for any real property tract or parcel as is necessary for evaluation and decision-making purposes.

Real property may be purchased or acquired by other means for more or less than appraisal value.

Title Binder, Title Insurance and Surveys. It is the Board of Education's practice to acquire fee simple interest to real property with good and marketable title. This is verified by means of a title search, title binder, and/or title insurance.

The Real Estate Director may secure title search services from qualified title examiners and/or may purchase title binders and title insurance policies from licensed and bonded title insurance companies.

In case of low-value acquisitions of less than $5000.00, property donations or tax property, securing a title search, title binder or title insurance is not required but is an optional procedure.

In reference to title insurance policies, the Board of Education will require that Title Policy-Schedule B, standard exceptions to title insurance, items one through four, be removed at or prior to closing.

This requirement may be waived by the Real Estate Director.

Items one through four are as follows:

  1. Rights or claims of parties in possession not shown by the public records;
  2. Easements, or claims of easements, not shown by the public records;
  3. Encroachments, overlaps, conflicts in boundary lines, shortages in area, or inspection of the premises; and
  4. Any item, claim or right to lien, for services, labor or material heretofore furnished, imposed by law and not shown by the public records.

In the case of all real estate acquisitions valued at $5000.00 or more, the Real Estate Director will secure a property survey for school district records.

In the case of most real property acquisitions, the Real Estate Director may secure an environmental assessment and make closing the transaction contingent upon the findings of the assessment. This may include Phase I through Phase III, Standard Environmental Assessment Analysis. This requirement may be waived by the Real Estate Director.

In the case of real property donations, the Board of Education, and/or the school district administration reserves the right to accept or reject the donation. A donation is neither final nor binding upon the Board of Education, until such time as it is formally accepted by the Board of Education.

The Board of Education may pay real estate commissions or similar fees to acquire or dispose of real property.

Generally, the Board of Education will require that real property being acquired by the school district to be free and clear of all debts, stand-by charges or other financial encumbrances on or prior to closing.

The Board of Education and the school district administration may lease real property. A lease shall incorporate language that defines the lessor and lessee, the lease property, the lease term, the lease use, the lease rent, insurance and indemnification language, notice and termination language.

It is permissible to secure the temporary use of real property owned by others by license or permit. Generally, license or permits are short-term and are revocable by the Owner.

The Board of Education is a political subdivision of the State of New Mexico. It has the legal right to acquire private property for public purposes by exercise of Eminent Domain and Condemnation. In such cases, the school district shall provide the Owner of the property due process of law and payment of just compensation. The Real Estate Director shall coordinate any condemnation action with the Board of Education's legal counsel.

The New Mexico State Supreme Court has determined that the creation of public debt without voter approval violates Article IX, Section 10, of the New Mexico State Constitution. Therefore, long-term mortgage financing and lease-purchase financing for real property acquisition purposes is generally prohibited. In limited circumstances it may be permissible to acquire real property by short-term contract of five years or less, and without payment of interest. The Real Estate Director shall secure the review and approval of the Board of Education's legal counsel for long-term mortgage financing, lease-purchase financing or short-term contract real estate acquisition proposals.

In the case of acquisitions of real property by purchase, exchange or donation, the review and approval of the Superintendent of Schools and the Board of Education is required.

In the case of acquisition of real property by lease, the review and approval of the Superintendent of Schools, or his designee, is required.

In the case of the temporary use of real property which is secured by license or permit, the review and approval of the Real Estate Director is required.

The Real Estate Department will keep and maintain permanent records for all real estate acquisitions.

Ref.:

NSBA/NEPN Classification: DFA, DN

NSBA EPS Classification: DN

Approved: June 9, 1998

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