2. Real Property

Arch 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 straight 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 Arch relating to the acceptance, management, and liquidation of real property gifted to Arch.

No gift of real property shall be accepted without prior approval of the Gift Acceptance Committee of Arch. If certain conditions exist, gifts may require the approval of the Real Estate Sub-Committee of the Finance Committee for the Arch. Please see the Real Estate Sub-Committee mission on the Arch home page under Documents Library/Governance/Real Estate Sub-Committee.

Real property donated to Arch 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. TOP

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

1. Title will be transferred to Arch 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.

a. Property must appraise for a value equal to or in excess of $10,000.

b. The appraisal may not be made more than 60 days prior to the date of the contribution.

c. The appraisal cannot be a percentage of the property. (See Mission of Real Estate Sub-Committee referenced above)

d. Arch may not pay for the appraisal.

e. The appraisal must be made by an "independent" appraiser.

f. 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 Arch without first complying with the following procedures:

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

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.

b. 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.

c. If the above procedures disclose risk of liability, the real property will only be accepted with the written approval of the Executive Committee.

d. All contracts for environmental audits will be prepared and reviewed by Arch attorneys or its designee.

e. 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. TOP

Mortgaged Property

Arch 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 Arch and all deposits, advance rents, and other monies transferred to Arch or otherwise accounted for as required by law. TOP

Special Deed Clauses

The Gift Acceptance Committee must approve any special deed clauses. TOP

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. TOP

Helpful Information

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

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 Gift Accounting Office. The signature of the Executive Director of Arch will be obtained and the form will be returned to the donor. The form also must be signed by the appraiser for gifts in excess of $5,000. TOP

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. TOP

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, Arch 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 Arch for failure to comply with the requirements.

For procedures for the acquisition or purchase of real property, see Section VIII.P. TOP