Regulation DO-R(0): School Properties Disposal Procedures

PROCEDURES FOR DISPOSITION OF SURPLUS REAL PROPERTY (BUILDINGS OR LAND)

After real property has been declared surplus by the DeKalb County Board of Education (“Board”) and the Board has authorized and directed the Superintendent of the DeKalb County School District ("DCSD"), or his/her designee(s), to dispose of the property, the following procedures as indicated below may be followed by the Superintendent or his/her designee(s):

1. General Requirements/Procedures:

2. After a property has been declared surplus and prior to its disposal, DCSD shall procure at least one property appraisal from an individual who is licensed and certified by the State of Georgia as a "State Certified General Real Property Appraiser". DCSD, however, does not need to wait for declaration of surplus by the Board for an appraisal to be procured.

3. Irrespective of the method of disposal of surplus property utilized by the Board, the minimum acceptable price or value for negotiation shall be the value determined by a sufficient and acceptable appraisal obtained by DCSD.

4. Irrespective of the method of disposal of surplus property utilized by the Board, DCSD will follow any applicable Board policies and administrative regulations, as well as all other terms the Board deems to be in the best interest of DCSD.

5. Surplus properties are generally disposed of "as-is". DCSD does not offer title insurance, and DCSD and the Board shall make no warranties or guarantees regarding the title of the property, or any guarantees or warranties that any property is usable for any particular purpose. DCSD may offer the property conditioned upon government action that the buyer may need to satisfy within a reasonable time period, as set forth in the disposal method process.

6. Nothing herein is intended to set forth procedures for the lease of surplus real property. Additionally, the Board may make its unused facilities available to local charter schools in accordance with Georgia law.

7. The Board will convey title of the property to the purchaser by Quitclaim deed.

8. The attorney for the Board will represent the Board at the closing on the purchase and draft/review all legal documents associated with the conveyance of the property.

9. Restrictions:

In order to prevent the appearance of impropriety, DCSD employees and their immediate family members are prohibited from purchasing DCSD surplus property or receiving surplus property if that employee was involved in the process in which the property was declared as surplus. All other DCSD employees are permitted to participate in the public sale of surplus property under the same conditions that are made available to the public. Sales to such employees are not authorized except during that period that the sales have been advertised to the public.

1. Reservation of rights:

Notwithstanding the procedures set forth in this regulation, the determination of priority and/or method of disposal of surplus property, and the discretion to dispose of surplus property, remains with the Board according to its determination of the best interests of DCSD, and as necessary to the efficient operation of DCSD as provided by law. In addition, notwithstanding any other provision of Policy DO, or this regulation, to the contrary:

1. the Board and DCSD shall have the right to reject any and all offers related to the disposal of surplus property, including, but not limited to bids and offers to purchase, exchange, or other negotiated transfer;

2. the Board and DCSD shall have the right to waive or modify any of the requirements set forth herein; and

3. the Board is authorized to make all arrangements necessary to the efficient operation of the schools as provided by law. (O.C.G.A. 20-2-520).

Option to offer surplus property to local government:

Notwithstanding the alternative methods of disposal of surplus property set forth herein, the Superintendent or his/her designee shall have the option, but not the requirement, to offer surplus property to a local government entity as follows:

1. Notify the local incorporated municipal government whose territorial boundaries in which the property is situated (or DeKalb County government if situated in an unincorporated area), of the property availability, stipulating the terms, conditions, and deadlines regarding as to when the Board will be notified of the local government's interest in acquiring the property, and the local government's first option for acquisition; and

2. Present to the Board the information, including the appraisal, and indicate the interest level of the local government concerning the acquisition of the property for appraised value or other substantive benefit satisfactory to the Board. This presentation can be combined with a plan for disposal method for such real property to the local government.

3. Permissible Disposition Methods:

ALTERNATIVE A: Disposition by Sealed Bid

In addition to the General Requirements set forth above, all sealed bids shall comply with the terms and conditions set forth in the bid, and the following:

1. Any reference in this regulation to sealed bid shall not preclude the DCSD from receiving bids and proposals by way of the nternet or other electronic means. DCSD may also reject any bid.

2. Notice of the Board's intent to sell will be published two times in one or more newspapers of general circulation in the metro area; and the notice shall state that the bids will be received on a specified date.

3. Must be accompanied by earnest money deposit in the form prescribed by the terms and conditions of the bid, and made payable to DCSD, in an amount not less than ten percent (10%) of the total bid amount.

4. Must be accompanied by two bank references, attesting to the credibility of the bidder.

5. The bid shall be irrevocable, in that it may not be withdrawn by the bidder before the Board takes official action on the matter.

6. In accordance with the terms and conditions of the bid, the deposit accompanying the successful bid may be deposited in escrow, or held by the Chief Financial Officer for DCSD, until closing on the purchase of the property. Payment of the balance of the purchase price shall be made at the closing of the sale. The earnest money deposit shall be credited to the purchase price at closing.

7. Checks submitted as earnest money by unsuccessful bidders will be returned to the unsuccessful bidder following official Board action of the matter.

8. In the event the successful bidder is unable to pay the balance of the purchase price at closing, or is unable to the close within the time set forth by the Board, the earnest money deposit shall become non-refundable and may be retained by DCSD as liquidated damages.

9. The successful bidder may examine title (and conduct other standard due diligence) for thirty (30) calendar days after notification that the bid has been accepted ("the due diligence period"); and shall within that time notify the Board, in writing, of any defects making the title unmarketable in accordance with applicable Georgia law and standards.

10. The Board or DCSD shall have up to thirty (30) calendar days from its receipt of such written notification to cure any defects ("the cure period") of title brought to its attention in writing, or to terminate the agreement to sale in lieu of curing, in which event the bidder's earnest money will be refunded.

11. If no termination occurs, then the closing shall occur within fifteen (15) calendar days after the cure period, unless the time for closing is otherwise extended by the Board.

12. If within the due diligence period, the successful bidder fails to provide the Board with written notice of defects, closing shall occur within forty-five (45) days of Board approval of the successful bidder.

13. The Superintendent or his/her designee will report the closing transaction and/or status to the Board.

ALTERNATIVE B: Listing with a licensed real estate broker or marketing agent

In accordance with applicable Board policies and regulations related to procurement of professional services, DCSD may retain a professional and licensed, as applicable, real estate broker or agent ("a real estate professional"), to accomplish the sale of surplus property to the general public. The real estate professional may be paid from the proceeds of the sale and in accordance with the payment methods in outlined in the procurement. The real estate professional may not be one of the appraisers. In addition to the General Requirements set forth above, applicable industry standards and Georgia laws related to listing, noticing, advertising and sale of the property, the following shall be complied with and apply:

1. Proposals to purchase shall comply with all applicable terms of sale and purchase set forth by DCSD.Proposals to purchase from interested buyers may be submitted immediately, but will not be considered for approval by the Board before ten (10) days from the latter of the date the real estate professional is notified to proceed, signs are placed on the property, and the availability of the property is advertised. Post-dated contracts from interested buyers will not be considered if dated prior to the ten (10) days stipulated above.
2. The real estate professional receiving a purchase proposal will indicate on the contract form the date and time the offer is received. If two or more valid offers are received, indicating the same proposed purchase price, the one with the earlier date and time will be considered.
3. A meeting may be scheduled with the Board as soon as feasible after the expiration of the ten (10) days stipulated above to consider contract proposals and approve the successful proposal.
4. The successful purchaser shall be required to submit an earnest money deposit in the form prescribed by the terms and conditions of the sale, and made payable to DCSD, in an amount not less than ten percent (10%) of the total offer or proposal.
5. In accordance with the terms and conditions of the sale, the deposit may be deposited in escrow, or held by the Chief Financial Officer for DCSD, until closing on the purchase of the property. Payment of the balance of the purchase price shall be made at the closing of the sale. The earnest money deposit shall be credited to the purchase price at closing.
6. In the event the successful purchaser is unable to pay the balance of the purchase price at closing, or is unable to the close within the time set forth by the Board, the earnest money deposit shall become non-refundable and may be retained by DCSD as liquidated damages.

ALTERNATIVE C: Disposal to another school system, local charter school, or a governmental agency

The Board may sell, transfer, exchange or otherwise dispose of by other means authorized by law, surplus real property to another school system, local charter school, or governmental agency on such terms and conditions as may be mutually agreed upon. This process may be used in lieu of those outlined herein when an intergovernmental transaction or transaction with a local charter school takes place. With respect to any disposal to occur under this section, the minimum acceptable price or value for negotiation of property disposal shall be the value determined by a sufficient and acceptable appraisal obtained by DCSD. The Superintendent or his/her designee will report the closing transaction and/or status to the Board.

ALTERNATIVE D: Auction

In accordance with applicable Board policies and regulations related to procurement of professional services, DCSD may retain the services of a professional and licensed auction to dispose of surplus property by auction. The auctioneer may be paid from the proceeds of the sale and in accordance with the payment methods in outlined in the procurement. In addition to the General Requirements set forth above, applicable industry standards and Georgia laws related to listing, noticing, advertising and auctioning of the property, the following shall also be complied with and apply:

1. Auction of surplus real property may be conducted via sealed bid, public auction, written auction, or by online auctions via the Internet by an auctioneer who is both licensed as an auctioneer by the Georgia Auctioneers Commission and who is licensed as a real estate broker by the Georgia Real Estate Commission.
2. Notice of the Board's intent to sell will be published two times in one or more newspapers of general circulation in the metro area; and the notice shall state that the auction will occur on a specified date or dates.
3. The Board reserves the right to withdraw any or all surplus properties prior to the auction, or to reject any bid.
4. All sales are subject to approval by the Board, which may reject any sale for any reason. All bids or auctions must include the condition of “subject to final approval by the seller” in the terms for the auction process.
5. In accordance with the terms and conditions of the auction, the successful bidder will be required to execute a contract of sale for the amount of the accepted bid, which must be accompanied by a deposit in the form prescribed by the terms and conditions of the bid, and made payable to DCSD, in an amount not less than ten percent (10%) of the accepted bid amount. In accordance with the terms and conditions of the auction, the deposit accompanying the successful bid shall be deposited in escrow, or held by the Chief Financial Officer for DCSD, until closing on the purchase of the property. Unless the terms and conditions of the auction provide otherwise, payment of the balance of the purchase price shall be made at the closing of the sale. The deposit shall be credited to the purchase price at closing.
6. Failure to make such deposit or payment in accordance with the terms and conditions of the auction shall disqualify the bidder and shall nullify the bid.
7. If the successful bidder fails to timely pay the balance of the purchase price, the deposit will be forfeited.
8. A successful bidder failing to close on the sale may be restricted from bidding at future auctions.
9. All information aids provided by DCSD in connection with auctions, such as slides, tax maps, deeds, photos, and property records are for identification purposes only and are not intended as, nor do they constitute, a representation, guarantee, or warranty as to condition, location, dimensions, zoning, property use and/or size.
10. The Superintendent or his/her designee will report the closing transaction and/or status to the Board.

See also Administrative Regulation DeKalb County Schools Descriptive Code EC-R