Acceptance of Gifts of Real Property
Provides guidelines for accepting and valuing gifts of real property.
This policy sets forth the procedures which Adelphi University shall follow to accept title to gifts of real property. The policy is intended to safeguard the University against accepting gifts of real property that are difficult to market or are encumbered with defects that could put the University at risk once the institution is in the chain of title.
Reason for Policy
To provide guidelines for accepting and valuing gifts of real property.
Who Is Governed by this Policy
Procedure for Initial Processing of Potential Gifts
The Vice President of University Advancement will have overall responsibility for handling inquiries, negotiating with donors, assembling the documentation, presenting the gift for acceptance to the Finance and Investment Committee and marketing real property gifts. All inquiries regarding real property will be referred to or coordinated with University Advancement management.
Authority to Negotiate
The Office of the Executive Vice President of Finance will have the authority to negotiate with donors, retain appraisers, surveyors, realtors and other technical consultants, and to execute agreements subject to Adelphi University approval. Assuming such activities follow approved procedures and assuming such agreements follow the process approved by the University’s legal counsel, this authority to act will not require review or further approval other than that of the Board of Trustees outlined below. The Office of the Executive Vice President of Finance shall coordinate with the Office of the Vice President of University Advancement throughout the process.
Board of Trustees’ Responsibility
In all instances of gifts of real property, the Board of Trustees has final determination of accepting or rejecting the gift.
Evaluation of Potential Gifts
A. Property and report form
Upon initial inquiry, potential donors will be asked to complete a property inquiry form and return it to the Office of the Vice President of University Advancement with appropriate maps and documentation.
B. Liens and encumbrances
Property, which is subject to liens, unpaid mortgages, deeds of trust, judgment liens, unpaid taxes, or assessments, mechanics’ liens, or other encumbrances, will be evaluated as “bargain sales.” (A bargain sale is an arrangement whereby a donor offers property to Adelphi University at a price significantly below its market value.)
Properties subject to encumbrances will be considered for acceptance only if evaluation convincingly demonstrates that the property can be sold at a price, which exceeds the aggregate amount of the encumbrances, and any costs associated with satisfying them and any selling costs.
C. Field evaluation
If initial information indicates that an offer is viable and if the property seems potentially profitable, an authorized representative of the Office of the Executive Vice President of Finance will visit the property. A representative may be a local realtor and/or business affairs representative. The purpose of the visit will be:
- To identify any potential problems not evident from initially supplied information.
- To identify any environmental conditions that would argue against the Office of the Vice President of University Advancement sale of property; such as the presence of toxic chemicals or other pollutants, environmental restrictions, sanctions, toxic wastes, or otherwise encumbered as to cause present or future liability for the University. The Field Checklist (annexed as Exhibit B) will serve as the basis for this analysis. If any indications of possible pollution exist, the Office of the Vice President of Advancement will decide either to forego the gift or to retain consultants to undertake analysis that is more detailed.
D. Market evaluation
Whenever practicable, arrangements will be made to have a realtor analyze the property to evaluate the existence of a market for such property. The Office of the Executive Vice President of Finance, or a representative of, may, at their opinion, request that the donor provide such an evaluation from a realtor acceptable to the University. Under IRS regulations, the donor must pay for any initial appraisal of the property. It is also the responsibility of the donor to cover the costs of the title search and environmental impact study.
E. Expense budget
Office of the Executive Vice President of Finance, or a representative of, will prepare a budget outlining all the projected expenses associated with the acceptance of all proposed real property. The budget will include consideration of the factors set forth in Exhibit C.
F. Authority to Accept Real Property
Upon completion of the evaluation, the Office of the Executive Vice President of Finance and the Office of the Vice President of University Advancement will jointly present the proposed gift to the Finance and Investment Committee of the Board of Trustees.
The Finance and Investment Committee of the Board of Trustees will act on the item accordingly and move it forward to the full Board of Trustees as appropriate. The Board of Trustees will have the final authority to accept or refuse a real property gift. G. Authority to Refuse Gifts of Real Property The Board of Trustees may refuse any offered real property that is judged not to be in the best interests of Adelphi University.
H. Procedure for Accepting Real Property
The following procedures for accepting real property will take place:
- Prior to acceptance, the Finance and Investment Committee shall consider the need for title insurance and require such insurance in appropriate cases. If requested by the Finance and Investment Committee, the Office of the Executive Vice President of Finance, of a designee there of, will obtain title certification. If requested by the Finance and Investment Committee, the Office of the Executive Vice President of Finance, or a designee thereof, will purchase title insurance.
- Prior to the transfer of title to Adelphi University, the proper governing document for the gift will be signed by donor and the University (approved by the University’s outside legal counsel) stating the terms of the gift, which shall specify that there are no restrictions of Adelphi University’s right to use or convey the property among other legal and pertinent items.
- Prior to the transfer of the real property to Adelphi University, the Office of the Executive Vice President of Finance, or a designee thereof, will obtain sufficient insurance as deemed necessary by the Finance and Investment Committee or the full Board of Trustees to protect the University from losses due to physical damage or liability claims that might arise.
- Adelphi University will not seek exemption from real estate taxes for real property unless the property is to be used for Adelphi University related purposes.
I. Responsibility of the Donor
- The donor will be responsible for complying with all applicable legal requirements.
- It is incumbent upon the donor to produce a valid appraisal of the real property by an appraiser acceptable to the University. This appraisal will determine the market value of the property.
- Donors will be encouraged to discuss contemplated bequest of real property before finalizing their Wills. Property that is bequeathed to Adelphi University will be evaluated like other real property gifts.
- The donor will provide a statement certifying the donor’s knowledge of hazardous waste or materials that have been used or stored on the property.
Adelphi University Will Not
Adelphi University will not pay for legal assistance, appraisals, or other services on behalf of the donor. Adelphi University will not establish or corroborate the value of any property for substantiating the donor’s income tax charitable deduction.
Marketing Real Property
After accepting real property, arrangements will be made to sell the property through a qualified real estate professional. Local zoning ordinances, land-use plans, and community attitudes will be considered in marketing real property.
While it is anticipated that in most circumstances the sale price will equal or exceed the appraised value of the property, the terms of the sale will take into account current market conditions, availability of financing and other factors.
The Office of the Vice President of University Advancement will maintain all files pertaining to real property. Deeds to real estate properties will be stored in the Office of the Executive Vice President of Finance. The Office of the Vice President of University Advancement will maintain duplicate copies.
This policy does not have definitions associated with it at this time. Upon periodic policy review this area will be evaluated to determine if additional information is needed to supplement the policy.
This policy does not have forms associated with it at this time. Upon periodic policy review this area will be evaluated to determine if additional information is needed to supplement the policy.
This policy does not have related information at this time. Upon periodic policy review this area will be evaluated to determine if additional information is needed to supplement the policy.
- Last Reviewed Date: September 24, 2017
- Last Revised Date:September 24, 2017
- Policy Origination Date: September 1, 2017
Who Approved This Policy
Jim Perrino, Executive Vice President, Finance