Submission Date:
Question:
We have been approached by a community member who would like to donate land to the library that abuts our property. Are there any legal concerns we should be aware of before accepting this gift? Would we need a real estate attorney?
Thank you!
Answer:
Congratulations on the offer! It is always good to have the local library so well thought of that people want its footprint to expand.
And congratulations on immediately thinking about practicalities:
- Are there any legal concerns we should be aware of before accepting this gift?
- Would we need a real estate attorney?
The answer to both questions is "yes." Here is why:
To formally transfer ownership of land, a document called a "deed"[1] is recorded in the office of the county clerk. This process is relatively simple[2], and sometimes, parties do record a deed without a lawyer involved. However, the answers to the member's first question ("Are there any legal concerns we should be aware of before accepting this gift?") are the reasons why a library (or any non-profit) should involve their lawyer and/or a real estate attorney right from the contemplated acceptance of the donation.
When a party offers a gift of land, or a party contemplates buying land, there are numerous legal, strategic, and risk factors that must be considered. While I could name about fifty[3], I'll start with the top five:
1. Does the party offering the land actually own it?
This is called having "clear title", and it means that as part of the donation, it has been verified that the property doesn't have a co-owner or alleged owner who could swoop in and say they own it. While a library or other not-for-profit can take property without getting assurance of it, it is best to spend the resources to do a "title search" to make sure the title is "clear" (especially if the library might build on it later).
2. Does the land come with any burdens, hazards, or conditions?
Did the neighbors build a chicken coop over the property line?[4] Is there a tree on it that poses a hazard, hanging over the boundary line?[5] Does a nearby neighbor use the property for parking?[6] Does the donor want to impose any restrictions on the donation?[7]
Many of these concerns won't be immediately obvious or stated up-front. A real estate agent, inspector, and lawyer viewing the property and reviewing the deal can help assess them early on, to make sure they aren't a deal-killer.
3. Is the land polluted?
It is always good to check the EPA[8] and DEC[9] to see if there are any environmental concerns associated with the area; if there has been any industrial activity or gas station nearby, it is also wise to consider checking the soil. This is especially true if the donation is being considered as the site of a community garden or play area.[10]
4. Is the land useful to the donee?
As a gardener and lover of buildings, to me, almost all land is good land, but for a library that might not be the case. If the library's strategic plan doesn't support the property becoming part of routine operations (as a garden, additional parking, site of a future expansion, outdoor play area, apiary, picnic table area, landscaped buffer zone, community compost site, or any other useful purpose consistent with the library's mission in your community), the donation might be a kind but unsuitable offer. Don't be afraid to say no if it's not a good fit.
5. Can the donee (the library) use it as envisioned?
Before "taking title" (becoming the owner) the library should work with its architect and lawyer, along with a local government planner, to confirm the donated property can be used for the purpose envisioned by the library. For instance, if a parking lot is envisioned, but a local ordinance bars additional parking, a lawyer and/or architect can work to see if special permission can be obtained.
And that's the "top five." For all these reasons (and many more), a donation of land—if otherwise welcome—should be joyfully received with this type of professionalism: "Thank you so much! The library would like to move ahead with exploring this offer. Do you have a lawyer you are working with on this, or do you want to work with [director/trustee/committee] and our attorney directly?" After which the connection can be lawyer-to-lawyer (the most efficient, but a little cold) or party-to-party (with lawyers working in the background), and all the legal, strategic, and risk factors can be addressed.
Typically, a "closing" (the day of transfer) will involve lawyers exchanging the following documents and/or information:
- Contract of "sale" (donation)
- Title search
- Proposed deed (with any conditions)
- Survey of the property
- RPTL forms
- Secretary-certified copy of board resolution to accept donation
- Agreed-upon method of valuing the property for donation purposes
- Agreement of who is paying the bills (sometimes a not-for-profit will pay the "closing costs" of a donation, sometimes the donor will. This should be determined at an early phase of the deal)
After closing, the donated land will belong to the library. At that point, the lawyer for the library should already have discussed with the library any purpose to which the property will be used (even if it will just sit there for a while, as a buffer). The library should be budgeting for care of the property, and the library's insurance carrier should be notified that land is being added to the library's insured property. If "no trespass" or other signage is needed, that should go up as soon as possible.
Add at least 10 other custom details unique to that library, property, donor, and the municipality it is in, and that is what the transaction should look like. You will note that many of the considerations here don't relate solely to real estate—they relate to the operations of your library. For that reason, while a real estate lawyer (who only handles the closing) can be involved, it is ideal to use a lawyer who knows the priorities, plans, and particular needs of your library.
Thanks for a great question. I hope the offered donation is suited to your library's needs, is pollution-free, and the closing goes smoothly.
[1] And certain tax documents. And sometimes other documents. But there is always a deed.
[2] I would rank it as somewhat more complex than filing your own income tax, but less complex than making wine in the basement, both things I have done, but now assist my spouse in doing.
[3] Give me a pot of coffee and another real estate attorney to riff off of, and we could probably name 100, although once we got to "disputed mineral rights" and "alleged hauntings" you would want us to switch to decaf.
[4] A real example.
[5] A real example, and common source of neighborhood spats.
[6] A real example, a very common occurrence, and one of the touchiest issues in donor relations.
[7] Also a common request, and not a deal-breaker, so long as everyone can live with the conditions (and they are legal).
[10] If you are not familiar with how important it is to look a gift horse (land) in the mouth before turning it into a playground, search the history of "Love Canal" in Niagara County, NY.
