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 Asset Management purposes, 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 real estate among business units is at the direction of the President.

Real Estate activities are coordinated by UM Real Estate with support from the person designated by the business unit as the Real Estate Coordinator.  In instances where approval by the Assistance Vice President for Treasury & Real Estate, the Executive Vice President for Finance & Operations, Chief Financial Officer and Treasurer, or President is necessary, UM Real Estate will coordinate that approval.  In instances where business unit approvals are required, Real Estate Coordinators will coordinate that approval.  When Board approval is necessary, recommendations and supporting materials originating at the business unit will be sent to UM Real Estate for review and preparation for the Board.  UM Real Estate will coordinate all real estate Board approvals.

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.

The President’s authority to approve Real Estate transactions is defined by UM CRR 70.050 and delegations of such approval authority have been made thereunder by the President pursuant to UM CRR 20.020 B.1.b and 70.050 A. 

Certain transactions require Board approval or legislative approval.  CRR 70.050 C and D.  The Board may designate specific persons to execute instruments on transactions that the Board has approved.  CRR 70.010 C.

Following approval, the President and the Executive Vice President for Finance & Operations, Chief Financial Officer and Treasurer have authority to execute certain real estate instruments, and delegations thereunder have been made pursuant to UM CRR 70.010 B and 70.010 C.  Deeds require execution by certain other officers as required by statute.  CRR 70.010 B.

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.

For properties to be purchased, except in unusual circumstances: (a) an appraisal must be obtained, (b) the appraised value will be the basis for maximum purchase price, (c) for non-single family property acquisitions, the appraisal shall be completed by an MAI designated appraiser, licensed by the state where the property is located (d) for single family property acquisitions, the appraiser shall be licensed by the state where the property is located, and (e) for any property acquisition, the effective date of the appraisal shall be within one year of the effective date of the purchase agreement. UM Real Estate will review appraisals, support the business units in negotiations and advise the business units regarding the purchase price.

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

Under current delegations:

Real estate purchases of less than or equal to $500,000 must be approved by the Board, the President, the Executive Vice President for Finance & Operations, Chief Financial Officer and Treasurer, or Assistant Vice President for Treasury & Real Estate.

Real estate purchases of greater than $500,000 but less than or equal to $1,000,000 must be approved by the Board, the President, or the Executive Vice President for Finance & Operations, Chief Financial Officer and Treasurer.

Real estate purchases with a negotiated purchase price less than $1,000,000 and greater than 125% of the appraised value must be approved by the Executive Vice President for Finance & Operations, Chief Financial Officer and Treasurer.

All other real estate purchases require Board approval.

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 when a business unit determines a property is surplus to its needs and available for sale.  UM Real Estate will seek bids, and/or conduct negotiations with potential purchasers.  Property may be listed for sale with a realtor engaged through UM Real Estate.

For properties to be sold, except in unusual circumstances: (a) an appraisal must be obtained, (b) the appraised value will be the basis for minimum sale price, (c) for non-single family property dispositions, the appraisal shall be completed by an MAI designated appraiser, licensed by the state where the property is located, (d) for single family property dispositions, the appraiser shall be licensed by the state where the property is located, and (d) for any property disposition, the effective date of the appraisal shall be within one year of the effective date of the sale agreement. UM Real Estate will review appraisals, support the business units in negotiations, and advise the business units regarding the sale price.

Under current delegations:

Real estate sales of less than or equal to $500,000 must be approved by the Board, the President, the Executive Vice President for Finance & Operations, Chief Financial Officer and Treasurer, or the Assistant Vice President for Treasury & Real Estate.

Real estate sales of greater than $500,000 but less than or equal to $1,000,000 must be approved by the Board, the President, or the Executive Vice President for Finance & Operations, Chief Financial Officer and Treasurer.

Board of Curators approval shall be required for property sales located within 1 mile of the student union at each university campus.

All other real estate sales require Board approval.

Easements and Rights-of-Way
Easements, rights-of-way, and Licenses will be coordinated by UM Real Estate with support from Real Estate Coordinators. 

Under current delegations:

Easements, rights-of-way, and licenses of less than or equal to 24 months, without significant impairment to use of the property or significant decrease in value of the property may be approved by the Board, the President, the Executive Vice President for Finance & Operations, Chief Financial Officer and Treasurer, the Assistant Vice President for Treasury & Real Estate, or the Director of Real Estate.

Easements, rights-of-way, and licenses greater than 24 months to utility companies and governmental entities, without significant impairment to use of the property or significant decrease in value of the property may be approved by the Board, the President, the Executive Vice President for Finance & Operations, Chief Financial Officer and Treasurer, or the Assistant Vice President for Treasury & Real Estate.

All other easements and rights-of-way require Board approval.

Following approval, easements, rights-of-way, and licenses may be executed by the President, the Executive Vice President for Finance & Operations, Chief Financial Officer and Treasurer, or the Assistant Vice President for Treasury & Real Estate.

Leases
Leases will be coordinated by UM Real Estate with support from Real Estate Coordinators. 

Departmental units are responsible for thoroughly reviewing and complying with the terms of all existing leases, including without limitation making timely payment or monitoring collection of rent, making timely requests through the Real Estate Coordinators to UM Real Estate for renewals, exercise of options, or extensions, and adherence to all other terms of the lease and any reporting requirements.

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 should be in keeping with prudent business practices.  Guidelines for determining the relative merits of leasing, buying, building or renovating are available online:  https://www.umsystem.edu/ums/fa/treasurer/business/factors.

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

Under current delegations:

Leases with rent equal to or less than $1,000,000 per year and less than 10 years must be approved by the Board, the President, the Executive Vice President for Finance & Operations, Chief Financial Officer and Treasurer, or the Assistant Vice President for Treasury & Real Estate; or, for leases with rent equal to or less than $100,000 and a term of equal or less than 5 years, by the Director of Real Estate.

Leases with rent greater than $1,000,000 per year or longer than 10 years must be approved by the Board. 

All leases and/or contracts containing a lease must be approved by the campus Chief Financial Officer prior to execution.  These approvals apply regardless of cost or GASB reporting requirements.

All leases shall be accounted for and administered consistent with UM Policy 22502 - Accounting for Leases.

Definitions

Accountabilities

Real estate activities are coordinated by UM Real Estate with support from the person designated by the business unit (as the Real Estate Coordinator.  All real estate activities except those conducted through delegated Standard Form Contracts must be reviewed and approved by UM Real Estate.  Departmental units leasing property are responsible for compliance with all lease terms, and timely renewals.

Additional Details

Forms

Related Information

UM Real Estate
https://www.umsystem.edu/ums/fa/treasurer/real-estate

Collected Rules and Regulations: https://umsystem.edu/ums/rules/collected_rules/business/ch70
(Formerly BPM 409 – Real Estate) - Acceptance of Gifts gives the requirements for receiving donations of real estate.

History

Revised October 2022 to allow approval of certain real estate purchases over $1 million by the Executive Vice President for Finance & Operations, Chief Financial Officer and Treasurer.  In addition, the policy was updated to require campus Chief Financial Officer approval on all leases prior to execution.

Revised April 2022 to align with updates to the related CRRs as well as organizational changes.

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

Procedure