Real Estate - General

Scope

This policy addresses all real estate holdings for The Curators of the University of Missouri, regardless of location. 

Reason for Policy

Expands on the Execution of Instruments set forth in the Collected Rules and Regulations Chapter 70.

Policy Statement

All University real estate is held in the name of The Curators of the University of Missouri, regardless of location.  For purposes of Asset Management, real estate is assigned to a business unit (Campus, UM System, or University of Missouri Health Care).  The criteria considered for assignment include:

• location on a campus
• business unit responsible for management of the property
• source of funds provided for acquisition and operation
• donation of the property for the use or benefit of a business unit

Transfer of properties among business units is at the direction of the President.

Real Estate activities are coordinated by the person designated by the business unit as the Real Estate Coordinator, and reviewed and approved by UM Real Estate & Business Services.  In instances where approval by the Assistant Vice President for Management Services or the Vice President for Finance and Chief Financial Officer is necessary, UM Real Estate & Business Services will assist in obtaining that approval.  When Board approval is necessary, recommendations and supporting materials originating at the business unit will be sent to UM Real Estate & Business Services for review and preparation for the Board.

Originals of legal documents associated with real estate, and executed by a System Administrator, such as deeds, abstracts, wills, mortgages, easements, and leases, will be kept in files maintained by UM Real Estate & Business Services.

Purchase of Real Estate
Property will not be purchased for purposes outside the mission of the University.  Most properties to be purchased should be identified in campus master plans.

Property purchases may be acquired from the UMKC Trustees without Board approval.  Other property purchases require Board approval if:

• the purchase price exceeds $500,000, or
• the purchase price exceeds the highest appraised value, or
• the property is not within campus master plans or research parks.

Appraisals must be obtained for most properties to be purchased, and except in unusual circumstances, appraisals will be the basis for purchase price.  UM Business Services will review appraisals and advise the campus Real Estate Coordinator regarding negotiations.

Funding must be identified before negotiations with the seller are initiated.

Sale of Real Estate
Whenever possible, surplus real estate will be sold in a timely manner.  Sale of a donated property must comply with the terms of the gift.

The Real Estate Coordinator will notify UM Real Estate & Business Services when a business unit determines a property is surplus to its needs and available for sale.  Real Estate Coordinators may seek bids, and/or conduct negotiations with potential purchasers.  Property may be listed for sale with a realtor, with approval of the listing contract by UM Real Estate & Business Services.

Property sales require Board approval if:

• the sale price exceeds $500,000, or
• the sale price is less than appraised values, or
• the property is within campus master plans or research parks.

Appraisals must be obtained for most properties to be sold, and except in unusual circumstances, appraisals will be the basis for sale price.  UM Real Estate & Business Services will review appraisals and advise the campus Real Estate Coordinator regarding the sale price.

Easements and Rights-of-Way
Easements and rights-of-way to utility companies or governmental entities, which will not significantly impair the use or decrease the value of University property, may be granted by the Assistant Vice President for Management Services, without approval by the Board of Curators.

Temporary rights-of-way, revocable upon not more than six-month’s notice, may be granted to any individual or entity when approved by the Assistant Vice President for Management Services, provided there are no final commitments on behalf of the University in excess of budgeted funds.  All other easements and rights-of-way require approval by the Board of Curators.

Leases
Real Estate Coordinators are responsible for reviewing potential leases to verify the lease is necessary when the University is lessee, or that University property is available and the tenant appropriate when the University is lessor.  Leases must be consistent with the University mission, and the terms and conditions of the lease must be in keeping with prudent business practices.  Guidelines for determining the relative merits of leasing, buying, building or renovating are available online:  https://umsystem.edu/ums/fa/management/business.

All property leases with the exception of Standard Form Contracts, whether the University is lessee or lessor, are executed by the Assistant Vice President for Management Services or the Director of UM Real Estate & Business Services.   Standard Form Contracts, used for routine leases, are pre-approved by the General Counsel, the Assistant Vice President for Management Services, and the Vice President for Finance and Chief Financial Officer, and are delegated to a business unit for execution by a specific individual without modification.

Property leases, where the University is either lessee or lessor, require Board approval if the annual rent exceeds $500,000, or the term is for more than five years.  Lease renewals will not require Board approval if the renewal is at the option of the University, and the term of each renewal is less than or equal to five years, and less than $500,000 per year. 

Definitions

Accountabilities

Real Estate activities are coordinated by the person designated by the business unit (Campus, UM System, or University of Missouri Health Care) as the Real Estate Coordinator, and must be reviewed and approved by the Director of UM Real Estate & Business Services. 

Additional Details

Forms

Related Information

Collected Rules and Regulations: https://umsystem.edu/ums/rules/collected_rules/business/ch70

Policy 24009 on Required Review of Potential Real Estate Gifts

History

Formerly Business Policy Manual 410 – Real Estate – General (revised 6/1/2008)

Procedure