Judges: JAMES D. \"BUDDY\" CALDWELL, Attorney General
Filed Date: 5/24/2010
Status: Precedential
Modified Date: 7/5/2016
Dear Mr. Duplantis:
Your request for an opinion has been forwarded to me for research and reply. You have asked for an opinion from this office concerning the procedure to be followed should the St. Mary Parish School Board (School Board) decide to transfer ownership of the following two pieces of property to the Town of Baldwin: (1) Baldwin Elementary School and (2) a parcel of land adjacent to the school. The Town of Baldwin entered into a 2008 Intergovernmental Agreement with the School Board in which it agreed to pay $100,000.00 to the School Board in order to "aid in the costs of obtaining certain infrastructure, particularly utilities." The parties also agreed that in the event the School Board ever divested itself of the school, the Town of Baldwin "would be given due consideration to obtain ownership." The School Board obtained the adjacent parcel of land through a 1984 Act of Sale with the Baldwin Volunteer Fire Department. The Act of Sale required that the property could not be sold without giving the Town of Baldwin the right of first refusal.
The School Board has recently voted that its Baldwin Elementary School and Land adjacent to the school are no longer used or needed to operate the schools within its jurisdiction and desires to transfer the school and property to the Town of Baldwin. Your concern is whether any statutes, particularly La.R.S.
Initially, it is important to note that there is no indication in your opinion request that the property at issue involves 16th Section lands (lands held in trust by the State and managed by School Boards); therefore, the sale of this property is not subject to any statutory provisions applicable to 16th Section lands.
Therefore, other statutory provisions governing non-16th section property, such as La.R.S.
La.R.S.
Any city, parish, or other local public school board may sell, lease, or otherwise dispose of, at public or private sale, for cash or on terms of credit, any school site, building, facility, or personal property which is not used and, in the judgment of the school board, is not needed in the operation of any school or schools within its jurisdiction. Any such sale, lease, or disposal of such school property shall be on such terms and conditions and for such consideration as the school board shall prescribe.
(West 2010).
Whereas, La.R.S.
Whenever the school board of any parish or city determines that any school lands or other immovable property under its control are no longer needed for school purposes and the best interest of the public school system would be served by the sale of such lands, the school board shall have the authority to dispose of such lands at public auction or under sealed bids in accordance with the procedure set forth in this subpart; provided that this subpart shall not apply to the sale of sixteenth section lands, school indemnity lands or any other school lands for the sale of which the law already has provided a procedure in Chapter 6 of Title 41 of the Louisiana Revised Statutes or elsewhere in the law. *Page 3
(West 2010).
Our office has analyzed the operation of the foregoing statutes in tandem in La. Atty. Gen. Op. No. 06-0285, in which we cited and affirmed our prior reasoning in La. Atty. Gen. Op. No. 01-0321:
Consequently, LSA-R.S.
We take cognizance of the fact that LSA-R.S.
(emphasis original).
As mentioned in your opinion request, the School Board has determined that Baldwin Elementary and land adjacent to the school are no longer needed for the operation of the schools within its jurisdiction and have been declared surplus. We adopt the sound legal reasoning of Atty. Gen. Op. Nos. 01-0321 and 06-0285, whereby La.R.S.
La.R.S.
However, the transfer must be accomplished within the constraints of La.Const. Art. VII, Sec. 14, "which precludes the use of `funds, credit, property or things of value of the state or of any political subdivision' for the purpose of loans, pledges or donations `to or for any person, association, or corporation, public or private.'" La. Atty. Gen. Op. 95-325.
In order to comply with this particular constitutional provision, the School Board must receive adequate consideration from the Town of Baldwin for the property which would require a sale of the property for a price not less than the property's fair market value. "Fair market value means the price at which property would change hands between a willing buyer and a willing seller when neither party is under any compulsion to buy or sell and both parties have a reasonable knowledge of relevant facts." See La. Atty. Gen. Op. No. 09-0293, a copy of which is enclosed herein. However, since the Town of Baldwin, the purchaser, is also a public entity, the sale of the property should not be for a price that exceeds the fair market value as that could be deemed to be a donation in direct contravention of the constitution. See La. Atty. Gen. Op. No. 09-0293. Additionally, if the properties have a value greater than $3,000.00, then La.R.S.
According to the Intergovernmental Agreement between the St. Mary Parish School Board and the Town of Baldwin, the Town paid $100,000.00 "toward the cost of providing utilities, specifically water and sewerage to the new school facility." (emphasis added). In consideration of the $100,000.00, "the Board agree[d] to construct, maintain, and operate the school, and give the TOWN due consideration as to the future use of the BOARD'S facilities located within the Town of Baldwin, which may become vacant upon the opening of this new school." (emphasis original). The Town has already paid $100,000.00 to the Board to assist with the costs for water, sewerage, and utilities of the School in the past. This past payment may not be used now as consideration for the contemplated sale. Instead, the Town will need to pay an additional amount to the Board representing fair value in order to ensure that article II of Section 14 of the Louisiana Constitution is not violated. Rendering an opinion as to what the fair value amount should be, would require a factual determination in direct contravention with our Office's long-standing policy against rendering opinions on issues of fact.1 *Page 5
As for the Act of Sale between the Baldwin Fire Department and the St. Mary Parish School Board for the parcel of property adjacent to Baldwin Elementary, the contractual language contains a right of "first privilege" or right of first refusal provision. This provision provides that in consideration of the sale, the St. Mary Parish School Board "binds and obligates itself, its heirs, and assigns not to sell, assign, or transfer the . . . property without giving the Town of Baldwin the first privilege of purchasing the same, at a price to be determined in an appraisal by a registered M.A.I. appraiser, which privilege shall expire after fifteen (15) days prior notice of such intention to sell, if not exercised during that time." Therefore, according to the contractual language, the St. Mary Parish School Board is obligated to offer the land adjacent to Baldwin Elementary to the Town of Baldwin first, after an appraisal has been performed and the Town has been put on notice of the intent to sell. Because the St. Mary Parish School Board and the Town of Baldwin are both public entities, such a condition of the sale or transfer of the property would not be prohibited, as public bids and advertisements would not be required in this particular instance pursuant to the foregoing discussion. Hence, the Town of Baldwin has the first right of refusal on the land adjacent to the Baldwin Elementary subject to compliance with La.R.S.
Therefore, pursuant to the reasoning in La. Atty. Gen. Op. 95-325, it is our office's opinion that St. Mary Parish School Board is not required to advertise for bids in order to sell Baldwin Elementary School and its adjacent property to the Town of Baldwin. It is further the opinion of this office that the School Board must receive fair value and an appraisal of the properties for the sale if the purchase price exceeds $3,000.00.
It is understood and agreed between the parties hereto that, [wh]ile the cash consideration moving between the parties is $2,000.00, . . . named in said deed, the value of the property conveyed is in [ex]cess of this sum by some three to four thousand dollars,; and that . . . prime and other consideration, therefore, is that the Parish *Page 6 [Bo]ard of School Directors for the Parish of St. Mary will maintain and operate a white public school ipon [sic] the said premises, and that the [sa]id conveyed property shall not be used for any other purpose except . . . purpose of maintaining a white public school.
See Opinion Request, Exhibit C.
In summary, as a condition of the act of sale, the property was to be used solely for the purpose of maintaining a white public school. This clause or provision is not a "reversionary clause" such as the provision at issue in La. Atty. Gen. Op. No. 08-0352. In this case, there is no language expressing that if the property is used for a different purpose it "shall revert" back to the sellers or their heirs. Nonetheless, La. Atty. Gen. Op. Nos. 08-0352 and 08-0353 copies of which are enclosed herein, offer sound guidance that should be followed in this instant matter regardless of whether the language is a reversionary clause or not. Based upon these prior opinions, although the desegregation of Baldwin Elementary School in 19692 was required by law, it was also a clear breach of the terms of the 1910 contract of sale. However, under Louisiana law, the heirs of the original sellers had ten years from 1969 to assert a breach of contract claim for failure to adhere to the terms of the contract. Now, approximately forty years later, the heirs are prohibited from asserting such claims as these claims prescribed in 1979. See La. Atty. Gen. Op. Nos. 08-0352 and 08-0353. Accordingly, it is the opinion of our office that the language of the 1910 Act of Sale in the building and on the premises included in the sale is unenforceable.
We hope that this information sufficiently answers your inquires. If we can be of further assistance, please do not hesitate to contact us.
Very truly yours,
JAMES D. "BUDDY" CALDWELL ATTORNEY GENERAL
By:__________________________ KATHERINE K. GREEN Assistant Attorney General
JDC:KKG:jv *Page 1
62 LEASES
97 SCHOOLS SCHOOL DISTRICTS — Property
La.C.C. Arts.
Pursuant to Louisiana law, provisions in a real estate sale document requiring that a school be segregated are illegal and unenforceable and such a clause should be severable from the document. In addition, should the prior owner attempt to enforce such a provision, that action has prescribed.
Dear Mr. Haney:
You have requested an opinion from this Office regarding the ownership status of certain school board property in Iberia Parish. Specifically, you provide the following facts:
The Iberia Parish School Board ("the Board") acquired property, upon which is located one school, by a sale in 1926. The 1926 sale documents, which you have provided for our review, contain reversionary language that states that:
It is agreed and distinctly understood that the said property purchased by said Iberia Parish School Board shall be used for the purpose of erecting and maintaining a colored School only; and should at any time it be abandoned for such purposes, that then and in that event the said tract of land without improvements shall revert back to Vendor upon Vendor paying to the said Iberia Parish School Board, the sum of $800.00 the purchase price herein, within one year after the date of abandonment for school purposes.1
The Canal Street Elementary School was erected on the property. The subject school was integrated in 1969.2 In addition, according to information provided by your office, the school ceased being used for school purposes on February 6, 2008, due to the expansion of another school in the area. The original Vendor has made demand for the property pursuant to the above-quoted reversionary clause. However, in light of the triggering conditions of the reversionary clause, *Page 2 you have the following questions regarding the Board's rights and duties with respect to the land:
1. Is the Board obligated to return the property?
2. If the answer to question 1 is "yes", can the Board return it without improvements upon receipt of $800.00 cash, as stated in the deed, or must it have the appraised value?
3. To avoid the cost of demolitions (estimated to be approximately $50,000) can the Board legally offer to return the property with the improvements (the old school building) for the appraised value of the land without improvements?
For the reasons set forth below, it is the opinion of this Office that the Board is not under any obligation to return the subject property. Because we are of the opinion that the Board is the owner of the property and that the reversionary language is not actionable or enforceable, we need not address questions two and three, above.
As an initial matter, we find La.C.C. Art.
The right of ownership may be subject to a resolutory condition, and it may be burdened with a real right in favor of another person as allowed by law.
Because we are of the opinion that the reversionary clause in the 1926 deed is properly classified as a resolutory condition, 3 we believe that La.C.C. Art.
The courts of this State have looked disfavorably upon conditions in the acquisition of property by one elected body that will bind subsequent bodies as to the use of the property. See e.g., Anderson v.Thomas,
The next obvious question in this matter is: Can the above-quoted clause be stricken from the deed? In a recent opinion, Judge Lemelle of the Eastern District of Louisiana wrote the following concerning whether particular provision of a contract could be stricken due to their violations of public policy:
The Louisiana Supreme Court has held that the dissolution of a contractual provision because it goes against public policy does not necessarily dissolve the entire contract. The court stated, "It is not necessary that the entire agreement containing the stipulation against public order or policy be declared null." Morse v. J. Ray McDermott Co., Inc.,
Rathborne Land Co., LLC v. Ascent Energy, Inc.,
Because the questions that you ask relate to the cause of the contract (the 1926 deed), a consideration of the enforceability of an illegal cause is warranted. In this regard, La.C.C. Art.
[t]he cause of an obligation is unlawful when the enforcement of the obligation would produce a result prohibited by law or against public policy.
Because the subject cause in this matter is both illegal and in violation of public policy, we have no qualms about labeling it unenforceable. In addition, unlike the "as allowed by law" provision of La.C.C. Art.
Nonetheless, if the "obligation" is the entire sale (the 1926 deed), we believe that this option would obtain the same result as in theEvans cases: the failure of the cause would result in the failure of the contract. On the other hand, if, as we here opine, the "obligation" is merely the obligation to give effect to the resolutory condition, then the failure of the cause would not result in the failure of the contract, but rather just severing of the offending clause. Nonetheless, although we are unable to definitively opine that the Canal Street Elementary School property can remain the property of the Board because of the unenforceability of the segregation clause, for the reasons discussed below, we are of the opinion that such a determination is unnecessary, as the property appears to have vested in the Board's ownership for other reasons that rest on a clearer legal basis. *Page 6
It is the opinion of this Office that the basis for the Board's full ownership of the Canal Street Elementary School property, with no obligation to return the property for the failure to keep the school segregated, lies in the Louisiana law of prescription. When Canal Street Elementary School was integrated in 1969, this action was, while required by law, a clear and open breach of the 1926 sale contract.
The prescriptive period for bringing a breach of contract claim in Louisiana is ten years. La.C.C. Art.
In addition to the unenforceability of the reversionary clause for the reasons discussed above, there is yet another reason that the Canal Street Elementary School property remains in the ownership of the Board. There is a charge to the original owner of the Canal Street Elementary School property in the reversionary clause that requires it to take some action to avail itself of the terms of the reversionary clause. This language is as follows:
. . .that then and in that event the said tract of land without improvements shall revert back to Vendor upon Vendor paying to the said Iberia Parish School Board, the sum of $800.00 the purchase price herein, within one year after the date of abandonment for school purposes.9
This sub-clause of the reversionary clause requires the original owner to tender the $800.00 to the Board "within one year after the date of abandonment [of the property] for school purposes"10 in order to trigger the reversion. Thus, in this situation, it is the opinion of this Office that the reversionary clause was not automatically triggered at either the integration of the school or the cessation of use of the property for school purposes. Rather, it has not been triggered at all because the $800.00 has never been tendered. Because more than one year has passed since the time that the property ceased to be used for school purposes, the original owner no longer has an option to tender the funds to trigger the reversion. Thus, it is the opinion of this Office that for the further reason that it is too late to trigger the reversionary clause as to the Canal Street Elementary School property, the said property remains in the full ownership of the Board.
Accordingly, in answer to your first question, it is the opinion of this Office that, although the Board breached the segregation terms of the deed, that clause is *Page 7 now inoperable as a means to rescind the sale, as all actions that might be brought for said breach have prescribed11 and as the reversionary clause was never triggered. Therefore, the Board does not have an enforceable duty to return the Canal Street Elementary School property for its failure to adhere to the segregation requirement. The Board now owns that property without any strings attached.
If the answer to question 1 is "yes", can the Board return itwithout improvements upon receipt of $800.00 cash, as stated in thedeed, or must it have the appraised value?
Your second question is rendered moot by the answer to the first question and is thus considered no further.
To avoid the cost of demolitions(estimated to be approximately $50,000) can the Board legally offer toreturn the property with the improvements (the old school building) forthe appraised value of the land without improvements?
The answer to your third question is moot based upon the answer to your first question.
Is there an "offer back" provision that the Board can use to sellthe property back to the original owners?
During telephone conversations subsequent to your opinion request, you inquired whether the Board could offer the subject property back to the original owners in the event that the Board was the owner of the property. Because we have determined that the Board is the owner of the subject property, we address your question regarding whether, under the Public Bid Law, the Board can offer the property back to the original owners before putting it up for bid (assuming that the Board wants to divest itself of the property).
To answer this question, we refer you to La.R.S.
We hope this sufficiently answers your inquiry; however, if we may be of further assistance please do not hesitate to contact our office.
Sincerely yours,
JAMES D. "BUDDY" CALDWELL ATTORNEY GENERAL
By:__________________________
RYAN M. SEIDEMANN Assistant Attorney General
JDC/RMS/tp *Page 1
62 LEASES 97 SCHOOLS SCHOOL DISTRICTS — Property
La.C.C. Arts.
Pursuant to Louisiana law, provisions in a real estate sale document requiring that a school be segregated are illegal and unenforceable and such a clause should be severable from the document. In addition, should the prior owner attempt to enforce such a provision, that action has prescribed. However, there is no deficiency with the Peebles Elementary School lease that ends in 2010.
Dear Mr. Haney:
You have requested an opinion from this Office regarding the ownership status of certain school board property in Iberia Parish. Specifically, you provide the following facts:
The Iberia Parish School Board ("the Board") acquired two parcels of property, upon which is located one school, one by sale in 1906 and one by fifty-year lease in 1960. The 1906 sale documents, which you have provided for our review, contain reversionary language that states that:
It is agreed and understood that this lot, presently sold, is specially for the purposes of a White Public School for no other purposes, that should said Public School be discontinued there in that case the said lot shall return to present Vendor free from encumbrances.1
The Peebles Elementary School was erected on the property. The subject school was integrated in 1969.2 In addition, the school was vacated in 2005 due to damage caused by Hurricane Rita. The Board now desires to sell the property upon which this school sits. However, in light of the above-quoted reversionary clause, you have the following questions regarding the Board's rights and duties with respect to the land:
1. Does the Board have an enforceable obligation to return the properties? *Page 2
2. If the answer to question 1 is "yes", has prescription tolled on any reversionary language in the respective deeds?
3. If the answer to question 2 is "yes", can the Board legally demand the appraised value with all improvements (are improvements considered encumbrances)?
Each of these questions, to the extent that they are necessary, are addressed, in turn, below.
A. Does the Board have an enforceable obligation to return theproperties?
The implications and effects of reversionary clauses in property transfers was recently succinctly addressed by the Louisiana Fifth Circuit in the matter of City of Harahan v. State of Louisiana, 08-106 (La.App. 5 Cir. 5/27/08),
As an initial matter, we find La.C.C. Art.
The right of ownership may be subject to a resolutory condition, and it may be burdened with a real right in favor of another person as allowed by law.
Because we are of the opinion that the reversionary clause in the 1906 deed is properly classified as a resolutory condition, 3 we believe that La.C.C. Art.
The courts of this State have looked disfavorably upon conditions in the acquisition of property by one elected body that will bind subsequent bodies as to the use of the property. See e.g., Anderson v.Thomas,
The next obvious question in this matter is: Can the above-quoted clause be stricken from the deed? In a recent opinion, Judge Lemelle of the Eastern District of Louisiana wrote the following concerning whether particular provision of a contract could be stricken due to their violations of public policy:
The Louisiana Supreme Court has held that the dissolution of a contractual provision because it goes against public policy does not necessarily dissolve the entire contract. The court stated, "It is not necessary that the entire agreement containing the stipulation against public order or policy be declared null." Morse v. J. Ray McDermott Co., Inc.,
Rathborne Land Co., LLC v. Ascent Energy, Inc.,
Because the questions that you ask relate to the cause of the contract (the 1906 deed), a consideration of the enforceability of an illegal cause is warranted. In this regard, La.C.C. Art.
[t]he cause of an obligation is unlawful when the enforcement of the obligation would produce a result prohibited by law or against public policy.
Because the subject cause in this matter is both illegal and in violation of public policy, we have no qualms about labeling it unenforceable. In addition, unlike the "as allowed by law" provision of La.C.C. Art.
Nonetheless, if the "obligation" is the entire sale (the 1906 deed), we believe that this option would obtain the same result as in theEvans cases: the failure of the cause would result in the failure of the contract. On the other hand, if, as we here opine, the "obligation" is merely the obligation to give effect to the resolutory condition, then the failure of the cause would not result in the failure of the contract, but rather just severing of the offending clause. Nonetheless, although we are unable to definitively opine that the Peebles Elementary School property can remain the property of the Board because of the unenforceability of the segregation clause, for the reasons discussed below, we are of the opinion that such a determination is unnecessary, as the property appears to have vested in the Board's ownership for other reasons that rest on a clearer legal basis.
It is the opinion of this Office that the basis for the Board's full ownership of the Peebles Elementary School property, with no obligation to return the property for *Page 6 the failure to keep the school segregated, lies in the Louisiana law of prescription. When Peebles Elementary School was integrated in 1969, this action was, while required by law, a clear and open breach of the 1906 sale contract.
The prescriptive period for bringing a breach of contract claim in Louisiana is ten years. La.C.C. Art.
Accordingly, in answer to your first question, it is the opinion of this Office that, although the Board breached the segregation terms of the deed, that clause is now inoperable as a means to rescind the sale, as all actions that might be brought for said breach have prescribed.9 Therefore, the Board does not have an enforceable duty to return the Peebles Elementary School property for its failure to adhere to the segregation requirement. The Board now owns that property without any strings attached.
B. If the answer to question 1 is "yes", has prescription tolled onany reversionary language in the respective deeds?
Your second question, as to the deeded property, is answered by the answer to the first question and is thus considered no further.
C. If the answer to question 2 is "yes", can the Board legallydemand the appraised value with all improvements(are improvements considered encumbrances)?
The answer to your third question, as to the deeded property, is moot based upon the answer to your first question.
D. Is there an "offer back" provision that the Board can use tosell the property back to the original owners?
During telephone conversations subsequent to your opinion request, you inquired whether the Board could offer the subject property back to the original owners in the event that the Board was the owner of the property. Because we have determined that the Board is the owner of the subject property, we address your question regarding whether, under the Public Bid Law, the Board can offer the property back to the original owners before putting it up for bid (assuming that the Board wants to divest itself of the property). *Page 7
To answer this question, we refer you to La.R.S.
A. Does the Board have an enforceable obligation to return theproperties?
The operative language in the 1960 lease reads as follows:
It is agreed and understood that the property herein leased shall be used only for school purposes and the failure to put said property to such use for a period of one (1) year shall, ipso facto, terminate this lease.10
It is the opinion of this Office that there is no facial deficiency or unenforceable portion of this lease. The lease term is for 50 years, which would mean that the lease would run its course on December 14, 2010. In direct answer to your questions, it is the opinion of this Office that on December 14, 2010, the Board has an obligation to return the leased property unless the lease has been extended or the property has been purchased by the Board before that time.
B. If the answer to question 1 is "yes", has prescription tolled onany reversionary language in the respective deeds?
Because there is no reversionary language in this lease, this question is inapplicable to the leased property. *Page 8 C. If the answer to question 2 is "yes", can the Board legallydemand the appraised value with all improvements(are improvements considered encumbrances)?
Although it is clear that this question is more related to the sale document discussed in Part I of this opinion, there is some relevance of this question to the leased property. The relevant language in the leases states that:
At the termination of this lease for any cause, the lessee, Iberia Parish School Board, is specifically granted the right to remove from said property any buildings or improvements placed thereon by it.11
It is apparent from your request letter that this language could pose a problem for the Board, as the structures currently in place on the purchased and leased property span both tracts. Thus, the removal of improvements from the leased property could well mean the destruction of the improvements on the property that the Board owns on the 1906 deeded property. Again, this reality strongly suggests that the Board should make all efforts to either purchase the leased property outright or to at least seek a lease extension from the land owner if it wishes to retain an interest in the currently-leased land.
We should note that the above-quoted language is essentially a contractual recapitulation of the provisions of the Civil Code relating to lessees rights and improvements. Specifically, La.C.C. Art.
In the absence of contrary agreement, upon termination of the lease, the rights and obligations of the parties with regard to attachments, additions, or other improvements made to the leased thing by the lessee are as follows:
(1) The lessee may remove all improvements that he made to the leased thing, provided that he restore the thing to its former condition.
(2) If the lessee does not remove the improvements, the lessor may:
(a) Appropriate ownership of the improvements by reimbursing the lessee for their costs or for the enhanced value of the leased thing whichever is less; or
(b) Demand that the lessee remove the improvements within a reasonable time and restore the leased thing to its former *Page 9 condition. If the lessee fails to do so, the lessor may remove the improvements and restore the leased thing to its former condition at the expense of the lessee or appropriate ownership of the improvements without any obligation of reimbursement to the lessee. Appropriation of the improvement by the lessor may only be accomplished by providing additional notice by certified mail to the lessee after expiration of the time given the lessee to remove the improvements.
(c) Until such time as the lessor appropriates the improvement, the improvements shall remain the property of the lessee and the lessee shall be solely responsible for any harm caused by the improvements.
We do not believe that the lease provision modifies this law in any way, but rather simply memorializes it as part of the lease. Thus, should the lease terminate without an extension, the lessor would have the option of keeping the improvements if the Board does not elect to remove them.12 The exercise of this option would require some reimbursement to the Board as provided by La.C.C. Art.
Finally, concerning your question of whether an improvement constitutes an encumbrance on a piece of property, it is the opinion of this Office that it does not. An encumbrance is defined by Black's Law Dictionary (8th ed.) as:
A claim or liability that is attached to property or some other right and that may lessen its value, such as a lien or mortgage; any property right that is not an ownership interest.
Thus, it is clear that an encumbrance is an inchoate right that attaches to a piece of property and not a tangible thing such as a property improvement. Accordingly, it is our opinion that an improvement is not the same as an encumbrance.
We hope this sufficiently answers your inquiry; however, if we may be of further assistance please do not hesitate to contact our office.
Sincerely yours,
JAMES D. "BUDDY" CALDWELL ATTORNEY GENERAL
By:__________________________ RYAN M. SEIDEMANN Assistant Attorney General
JDC/RMS/tp *Page 1
90 — A — 1 PUBLIC FUNDS CONTRACTS
La.R.S.
It is permissible for the parish to purchase property without first seeking proposals from other property owners; however, the property must be appraised per La.R.S.
Dear Mr. Hebert,
You have requested an opinion of this office regarding a proposal by the Terrebonne Parish President to purchase 70 acres of property in the north part of the parish to construct a local government development, which would include a category 5 office for the Homeland Security Department, a new juvenile detention center, an animal shelter, and other government related offices. According to your request, the parish president picked out the site for the project and would like to purchase the property based on an appraisal obtained by the seller. Certain council members were approached by property owners in the area asking why their property was not considered. Thus, you ask whether it is permissible for the parish to purchase property without first seeking proposals from other property owners.
Article VI, § 23 of the Louisiana Constitution authorizes political subdivisions to acquire property. It provides:
Subject to and not inconsistent with this constitution and subject to restrictions provided by general law, political subdivisions may acquire property for any public purpose by purchase, donation, expropriation, exchange, or otherwise.
Once the determination has been made by a political subdivision to purchase a particular piece of property, there is nothing in the law that requires it to obtain appraisals from owners of different properties. See La. Atty. Gen. Op. No. 94-342 (stating "[t]here are no state constitutional or statutory provisions which dictate methods which must be used when school boards or other political subdivisions of the state purchase land."); see also
La. Atty. Gen. Op. No. 95-514. *Page 2
The law only requires that the property the political subdivision purchases be appraised. This requirement is set forth in La.R.S.
Notwithstanding any other provision of law to the contrary, no political subdivision shall purchase immovable property with a value greater than three thousand dollars unless prior to such purchase the property has been appraised by a qualified appraiser. No such appraisal shall include the value of improvements proposed to be made to the property after purchase by the political subdivision.
The purchase of immovable property for a price that exceeds the appraised value of the property would be tantamount to a donation of public funds; and therefore, a violation of Article VII, § 14(A) of the 1974 Constitution. La. Atty. Gen. Op. Nos. 08-0226, 99-251, 89-581.
We note that the parish council has the responsibility to act as a prudent manager of the public fisc. Thus, the council must closely scrutinize the appraisal obtained by the seller to ensure it is reasonable, was properly conducted and reflects the fair market value of the property. Fair market value means the price at which property would change hands between a willing buyer and a willing seller when neither party is under any compulsion to buy or sell and both parties have a reasonable knowledge of relevant facts. La. Atty. Gen. Op. Nos. 08-0226, 06-0236. If the council believes the appraisal is too high, it may wish to have its own appraisal done on the property.
Accordingly, it is the opinion of this office that it is permissible for the parish to purchase property without first seeking proposals from other property owners; however, the property must be appraised per La.R.S.
We trust this adequately responds to your request. However, if our office can be of further assistance, please do not hesitate to contact us.
Yours very truly,
JAMES D. "BUDDY" CALDWELL Attorney General
By:__________________________ Lindsey K. Hunter Assistant Attorney General
JDC/LKH/crt
A conditional obligation is one dependent on an uncertain event.
If the obligation may not be enforced until the uncertain event occurs, the condition is suspensive.
If the obligation may be immediately enforced but will come to an end when the uncertain event occurs, the condition is resolutory.
In this situation, because the obligation was immediately enforceable (i.e., the sale) and the failure of the sale is conditioned on the integration of the school, we are of the opinion that the segregation language in the deed is clearly a resolutory condition.
A conditional obligation is one dependent on an uncertain event.
If the obligation may not be enforced until the uncertain event occurs, the condition is suspensive.
If the obligation may be immediately enforced but will come to an end when the uncertain event occurs, the condition is resolutory.
In this situation, because the obligation was immediately enforceable (i.e., the sale) and the failure of the sale is conditioned on the integration of the school, we are of the opinion that the segregation language in the deed is clearly a resolutory condition.
Anderson v. Thomas , 166 La. 512 ( 1928 )
WILSON WRHSE. CO. OF TEXAS, INC. v. Maryland Cas. Co. , 269 So. 2d 562 ( 1972 )
Henderson Implement Co., Inc. v. Langley , 707 So. 2d 482 ( 1998 )
City of Harahan v. State Ex Rel. Doa , 986 So. 2d 755 ( 2008 )
Starke Taylor & Sons, Inc. v. Riverside Plantation , 301 So. 2d 676 ( 1974 )
Plessy v. Ferguson , 16 S. Ct. 1138 ( 1896 )
Brown v. Board of Education , 74 S. Ct. 686 ( 1954 )