The University of Georgia Foundation Real Property :: Tangible Personal Gifts :: Ways of Giving :: UGA Foundation

 


Real Property

POLICY: 3.6.2
Effective Date: 01/01/2004
Last Updated: 09/14/2015
Policy Owner: Scott, Brandon

UGAF welcomes and actively solicits gifts of real property. If the real property gift is intended to be used by a unit of UGA, not sold in order to fulfill its academic mission, then it is recommended the gift be made directly to UGA. The gift will then be considered state property and will qualify as state property for tax and insurance guidelines. The following policies have been adopted by UGAF relating to the acceptance, management, and liquidation of real property gifted to UGAF.

No gift of real property shall be accepted without prior approval of the Gift Acceptance Committee of UGAF. If certain conditions exit, gifts may require the approval of the Real Estate Committee of the Foundation. For example, for gifts of real property valued in excess of $100,000, prior to gift acceptance, the valuation of the gift will be shared with the Real Estate Committee Chair for advisement.

Real property donated to UGAF will generally be disposed of immediately and the proceeds used as directed by the donor. Each college or unit benefiting from the gift must agree in writing to pay all expenses associated with keeping the property such as, taxes, insurance, maintenance costs, and all other holding and carrying forward costs until the property is disposed.

Real property will be considered for acceptance only after meeting the following qualifications:

  1. Title will be transferred to UGAF by general warranty deed unless transfer is by a trustee, personal representative, or other fiduciary who will provide a deed appropriate to its capacity.  
  2. The property must be appraised by a qualified appraiser.
    1. Property must appraise for a value equal to or in excess of $10,000.
    2. The appraisal may not be made more than 60 days prior to the date of the contribution.
    3. The appraisal cannot be a percentage of the property.  
    4. The Foundation may not pay for the appraisal.  
    5. The appraisal must be made by an "independent" appraiser.
    6. In the absence of an appraisal, the property will be valued at $1.00.
  3. The property must pass a qualified Environmental Audit.

     No interest in real property, whether outright, in trust, by request, as a secured interest, or otherwise will be accepted by or on behalf of UGAF without first complying with the following procedures:

    1. An environmental review as described below will be performed on every potential real property asset prior to acceptance by UGAF.

      Rural, or Agricultural: For real property located in a rural area, or an agricultural area, an Environmental Risk Assessment will be performed by an approved consultant.

      Industrial: For real property located in a developed area where manufacturing or any class of industrial activity may have taken place, a Phase I audit will be performed by an approved consultant.

    2. If the environmental review indicates areas of significant concern, an additional investigation, including a Phase I, Phase II, or Phase III audit, as recommended, will be performed by an approved consultant prior to acceptance of the real property.
    3. If the above procedures disclose risk of liability, the real property will only be accepted with the written approval of the Executive Committee.  
    4. All contracts for environmental audits will be prepared and reviewed by UGAF attorneys or its designee.
    5. The donor will be encouraged to pay for any assessments and audits.  
  4. The property, if currently income producing, must be able to substantiate the annual net income.
  5. The property must have a clear title that is substantiated through a title search.

All expenses related to the qualification process, including title search, surveys, appraisals and audits will be paid for by the donor.

Mortgaged Property

UGAF rarely accepts mortgaged property and never accepts mortgaged property into a charitable remainder unitrust. However, when real property is acquired subject to a mortgage, the mortgage will be current and assumable and will only be accepted following the Gift Acceptance Committee approval. Prior to its acceptance:

  1. A clearly established method for the payment of the debt will be determined;
  2. An MAI appraisal will be required; and 
  3. Not more than 50 percent loan to value ratio will be met.

Leases

When real property is acquired subject to a lease, leases will not be in default and will be assignable by landlord. Commercial property acquired subject to a lease will only be accepted following Gift Acceptance Committee approval. Following these approvals, the leases will be assigned to UGAF and all deposits, advance rents, and other monies transferred to UGAF or otherwise accounted for as required by law.

Special Deed Clauses

The Gift Acceptance Committee must approve any special deed clauses.

Unsolicited Deeds

Unsolicited deeds will not be accepted. Upon the receipt of unsolicited deeds, the Real Estate Staff will immediately notify the grantor (in writing) that the real property has not been accepted and will not be accepted until the requirements of this policy are met.

In the rare case where a warranty deed is signed over to the Foundation without clearing the Foundation’s gift acceptance policies, the Real Estate Committee may, upon review of the circumstances of the property, recommend to the Foundation’s Gift Acceptance Committee, to accept or reject the gift.

Helpful Information

The following information, if available, would be very helpful to assist with the acceptance of real property by UGAF:

  1. Deed, including legal description, showing ownership of the donor;
  2. Prior appraisal;
  3. Prior survey;
  4. Prior title policies or abstracts;
  5. Prior environmental assessments;
  6. Tax parcel identification number; and
  7. Copy of most recent tax bill.

IRS Reporting Requirement

The donor must submit the Form 8283 to the Office of Gift & Alumni Information Management. The signature of the Executive Director of the UGAF will be obtained and the form will be returned to the donor along with the gift receipt. The form also must be signed by the appraiser for gifts in excess of $5,000.

    IRS Form 8283

    The donor must submit IRS Form 8283 with his or her federal income tax return in order to obtain the tax deduction

    Selling of Property Within Three Years of Gift Date

    If contributed property subject to the appraisal summary rules is sold, exchanged, or otherwise disposed of within three years of the date of the gift, the Foundation must file Form 8282, an information return, with the IRS (and the donor) within 90 days of the disposition. Serious penalties may be assessed against the Foundation for failure to comply with the requirements.

For procedures for the acquisition or purchase of real property, see Policy Purchase of Property or Facility policy.