This section contains policies for administering funds to be used for design,
construction, renovation, acquisition, and major maintenance of university
properties. Detailed instructions related to capital outlay projects are provided
for the Office of the Senior Vice President and Chief Financial
Officer, Office of the Associate Vice President for Capital Projects, Office of
Facilities Planning, Office of Real Estate Administration, Treasurer's
Office, purchasing department, and those
responsible for the building program at each campus and unit.
The policies also outline the basic requirements of state agencies such
as the State Building Commission, State Department of Finance and Administration,
Tennessee Higher Education Commission, and Tennessee State School Bond Authority.
Following these policies will help ensure that maximum effectiveness is
obtained from dollars made available for capital outlay projects through proper
authorization procedures, adequate controls, and an information system that
will assist the appropriate university decision makers.
Generally, funds for construction, renovation, acquisition, disposal, and major maintenance of university properties will be accounted for in Unexpended Plant Funds on
a project basis. A project is defined as a capital outlay undertaking for
construction of a new building (including the purchase of major equipment
for new facilities); acquisition of land; an addition, major alteration, or
renovation of an existing building; and other campus improvements such as
new roads, walks, utility and lighting systems, and tennis courts.
All funds provided as a result of the annual capital outlay request will
be accounted for in plant funds, which include state capital outlay appropriations,
State School Bond Authority authorizations, state capital maintenance appropriations,
and any other state-appropriated funds designated for capital outlay purposes.
Federal grant funds for projects included in plant funds also will be accounted
for in this group of accounts. In addition, funds for all new construction,
whatever the source, should be accounted for in plant funds.
Renovation and alteration projects over $100,000 must be accomplished through
plant funds. Such work for less than $100,000 may be accomplished through
plant funds at the discretion of the Senior Vice President and Chief Financial Officer (or designee).
Renovation and alteration projects less than $100,000 funded by Current General
Funds of a campus or unit may be handled through a general fund expenditure
account (see 19 of this policy).
The following approvals are required for the capital outlay projects described below.
Board of Trustees. The Board of Trustees annually approves capital
outlay, capital maintenance, and revenue-funded projects approved and/or
funded by the General Assembly. This approval also authorizes the university
to enter into contracts required for professional design services and
construction for such projects. The Board also approves campus land acquisition
plans and all amendments or revisions to those plans. These approvals
authorize the university to purchase land within the boundaries of the
plan when funds are available. The Board also approves the purchase of
land outside the campus boundaries.
Technical Approval. State laws (TCA 62-2-107) require
a registered architect, engineer, or landscape architect to prepare plans
on all public work projects involving construction or maintenance which
is estimated to cost over $25,000 and alters the structural, mechanical,
or electrical system of the project. Therefore, the university must secure
the services of either an outside or a university engineer or architect
to prepare such plans.
State Building Commission and Tennessee Higher Education Commission. The State Building Commission and the Tennessee Higher Education Commission must approve the construction of any new building; any project funded by direct appropriation of the General Assembly; any major maintenance project over $100,000, regardless of funding source; and any renovation project that changes the functional use of a building. Therefore, any project plans initiated by a campus or unit that meet these criteria must be submitted to the Office of Facilities Planning for review, processing, and obtaining the necessary approvals.
The university and the State Building Commission must approve all
demolition of university structures; therefore, a request for demolition
should be submitted to the director of facilities planning, who obtains
the necessary approvals.
The State Building Commission also must approve (1) all property acquisitions
by the university other than those secured by gifts that do not obligate
the expenditure of university or state funds for capital improvements
or continuing operating expenses and (2) all property sales other than
sales of gift property. (The Board of Trustees also must approve such
acquisitions and sales.)
The Director of Real Estate Administration is responsible for coordinating
property purchases and sales. Therefore, all matters related to property
purchases and sales should be submitted to the Director of Real Estate Administration, who obtains the necessary approvals. The state approvals
for property acquisition and sales generally are obtained in three to
Tennessee State School Bond Authority. The Tennessee State School
Bond Authority was created in 1965 to provide a mechanism for combining
the capital needs of the state's colleges and universities to reduce financing
costs. Financing construction for revenue-producing projects such as dormitories,
athletics facilities, parking garages, student centers, and hospitals
is provided through agreements with the School Bond Authority. The Authority
must approve the financing plans for all projects that require the issuance
of bonds, notes, or other debt obligations. The treasurer is responsible
for obtaining such approvals.
The Senior Vice President and Chief Financial Officer is responsible for administering the capital
outlay program according to the guidelines in this policy and to any other
pertinent university, state, or federal guidelines. These responsibilities
include all of the activities of the Offices of the Associate Vice President for
Capital Projects, Facilities Planning, and Real Estate Administration.
Associate Vice President for Capital Projects
The Associate Vice President for Capital Projects is primarily responsible for:
Developing and maintaining overall facility and campus plans for parking, roads, walks, drives, and lighting.
Developing program statements for campus facilities in consultation with appropriate campus personnel.
Developing the capital outlay request to be submitted to the state.
Administering the capital outlay program, including hiring and supervising architects, engineers, contractors, vendors, etc.
Ensuring that funds are spent as directed by the Board of Trustees and
appropriate state agencies.
Applying for federal and other outside funds whenever possible and meeting the requirements of the granting agencies or persons.
Securing necessary university, state, and federal approvals for capital
Obtaining the required approvals from the State Building Commission for planned facilities.
Leasing and Leasehold Improvements.
The Associate Vice President for Capital Projects will approve plans submitted for capital outlay and capital maintenance projects upon recommendation of the Director of Facilities Planning and Director of Real Estate Administration, who consult with appropriate campus or unit officials.
Director of Facilities Planning
The Director of Facilities Planning is primarily responsible for:
Working with the Director of Real Estate Administration and campus officials to develop program requirements for new facilities.
Administering contracts for the design and construction of capital outlay projects.
Coordinating efforts of contracted designers with appropriate campus officials or representatives and the Director of Real Estate Administration in designing and planning new facilities.
Maintaining budgets for capital outlay projects and obtaining the approval of the Senior Vice President and Chief Financial
Officer (or designee), and the Associate Vice President for Capital Projects for project budget changes.
Approving all disbursements on capital outlay project accounts (unless such authority has been officially delegated to others).
Working with the Director of Real Estate Administration and the campus representative to recommend locations of new buildings and facilities to campus officials and the Senior Vice President and Chief Financial Officer(or designee), and Associate Vice President for Capital Projects.
Developing capital outlay and capital maintenance budgets to present to the Senior Vice President and Chief Financial Officer (or designee), and Associate Vice President for Capital Projects in cooperation with the Director of Real Estate Administration and appropriate campus personnel.
Director of Real Estate Administration
The Director of Real Estate Administration is primarily responsible for:
Working with appropriate campus officials, the Director of Facilities Planning, Senior Vice President and Chief Financial Officer (or designee), and Associate Vice President for Capital Projects to develop and maintain campus master development plans.
Providing leadership in planning campus parking arrangements, vehicular and pedestrian traffic patterns, and other elements of campus planning.
Managing the acquisition and disposition of university land.
Ensuring that policies and procedures for land acquisition and disposition are followed.
Serving as the university's liaison with the State Building Commission
in matters related to land acquisition.
Working with the Director of Facilities Planning to recommend locations of new buildings and facilities to campus officials and the Senior Vice President and Chief Financial Officer (or designee), and Associate Vice President for Capital Projects.
Working with the Associate Vice President for Capital Projects, Director of Facilities Planning, and appropriate campus personnel to develop capital outlay and capital maintenance budgets.
Working with the Associate Vice President for Capital Projects, the Director of Facilities Planning, and campus officials to develop program requirements for new facilities.
Cooperating with the Director of Facilities Planning to coordinate contracted designers with the appropriate campus officials and staff in designing and planning new facilities.
Coordinating the sale of gift or surplus property, which includes determining the method of sale, selecting real estate agents, etc.
Leasing and Leasehold Improvements.
All projects that involve purchasing land, easements, rights-of-way, and new building sites are to be coordinated through the Director of Real Estate Administration.
Senior Vice President and Chief Financial Officer
The responsibilities of the Senior Vice President and Chief Financial Officer (or designee) are:
Prescribing accounting and budgetary controls to ensure that funds are
spent wisely in accordance with regulations imposed by the university
administration, Board of Trustees, and appropriate state agencies.
Developing sufficient management information to aid all responsible
personnel in the building program, in university administration, and at
Monitoring space utilization and space inventory records used in determining present and future space needs.
The responsibilities of the University Treasurer are:
Maintaining adequate accounting records of all Unexpended Plant Fund transactions.
Maintaining official copies of all contracts, invoices, vouchers, and other documents related to the receipt and disbursement of plant funds.
Ensuring that all transactions comply with pertinent university, state,
and federal regulations and contractual arrangements.
Requesting construction warrants from the state on projects funded by
capital outlay and maintenance appropriations and the Tennessee State
School Bond Authority.
Making appropriate arrangements for handling retainage as provided by
The chancellor of each campus will designate a person to be responsible for the building program at the campus level. Responsibilities of the campus representative are:
Initiating program statements for facilities.
Developing capital outlay requests (including movable equipment lists) to submit to the Senior Vice President and Chief Financial Officer (or designee), and Associate Vice President for Capital Projects.
Assisting the Associate Vice President for Capital Projects, Director of Facilities Planning (or representative), and Director of Real Estate Administration during all phases of a project to ensure that the needs of the campus are being met.
Informing the chancellor on the status of each project.
Maintaining campus space utilization and space inventory records used in determining present and future space needs.
Working with the Associate Vice President for Capital Projects and the Director of Real Estate Administration to address all Real Estate Administration activities.
Personnel at each campus can best determine the movable equipment needs
for each facility. The Director of Facilities Planning will determine the
desirability of employing architectural services for movable equipment.
The campus representative will work with the architect (if any) and appropriate
campus personnel to determine movable equipment requirements. These requirements
will be submitted through the Director of Facilities Planning to the purchasing
department (see 17b. of this policy).
Director of Facilities Planning. Budgetary control over approved
projects on the official university accounting records will be exercised on
the total project funding level. The Director of Facilities Planning will
maintain capital outlay project budgets, obtain the approval of the Senior Vice President and Chief Financial Officer (or designee) and the Associate Vice President for Capital Projects,
and consults with appropriate campus officials concerning any project budget
Although it is often necessary to establish a project account before receiving all required approvals, the funds may not be expended without the appropriate approvals.
University Treasurer. The Treasurer's
Office handles the accounting transactions to record state capital outlay
appropriations. All transfers to, from, or within plant funds will be submitted
to the treasurer (or designee) to determine that all regulations regarding
the use of funds have been followed, necessary approvals have been obtained,
and satisfactory explanation or documentation for the transaction has been
provided. REQUEST FOR BUDGET TRANSFER OR REVISION
T-15) may be used to initiate such transactions (see Appendix
A). The appropriate campus or unit chief
business officer will submit a FORM T-15
if campus or unit operating funds are involved.
The Treasurer's Office will not approve contracts and change orders that will result in a project account deficit until the source of funds for eliminating this deficit is identified.
When project expenditures are completed, either the Director of Facilities Planning or Director of Real Estate Administration will notify the Treasurer's Office to close the project account and to return any remaining funds to the funding source or arrange for other appropriate disposition.
The encumbrance of obligations against Unexpended Plant Fund projects occurs when formal contracts, purchase orders, and change orders are issued as follows:
Contracts. Agreements with architects, principal contractors and, at times, engineering and inspecting firms must be by formal contract. These contracts must be approved by the Board of Trustees, signed by the president or a vice president, and forwarded to the Treasurer's Office. The amount of each contract then will be recorded as an encumbrance against the project account, and the uncommitted balance of the project will be reduced.
Purchase Orders. A second method for encumbering plant funds is through purchase orders. Normally, purchase orders will be issued for movable equipment purchases and for other obligations of small amounts. Requisitions may be prepared either by the campus representative or the director of facilities planning. The director will forward the requisitions to the appropriate campus or unit purchasing department.
For certain large projects at campuses or units other than Knoxville,
the director may arrange to use the Knoxville campus purchasing department.
Normal purchasing department procedures will be followed for plant fund
projects. When the Treasurer's Office receives a copy of the purchase
order, this amount will be recorded as an encumbrance against the project
account, and the uncommitted balance will be reduced.
Change Orders. During a construction project, sometimes the amount specified in the contract or purchase order may need to be increased or decreased. This is done with change orders, which may be prepared by a project architect and must be approved by the Director of Facilities Planning (after consultation with appropriate campus officials) and Senior Vice President and Chief Financial Officer (or designee). Programmatic change orders requested by building users should be approved by the appropriate campus officials and forwarded to the Director of Facilities Planning.
Because a change order modifies the original contract, it must be submitted through the normal contract review process and executed by a vice president. The original change order then will be transmitted to the Treasurer's Office for recording. A copy of the change order should be sent to the appropriate campus official. The Treasurer's Office is responsible for following the current State Building Commission policy on change orders.
In rare circumstances, the Director of Facilities Planning may need
to approve an emergency change. This emergency approval normally will
involve a small change in the contract amount. The Director of Facilities Planning
will notify the Senior Vice President and Chief Financial Officer (or designee) as soon
as possible in writing, with copies to the Treasurer's Office and the
appropriate campus official. A formal change order will be executed
at the earliest possible date.
Unexpended Plant Fund Projects. Selected plant fund projects less
than $100,000 may be handled by campus officials who are authorized to initiate
purchases, to approve change orders that do not increase the dollar scope
of the project, and to approve disbursements against project funds. These
projects and their budgets must be approved in advance by the Senior Vice President
and Chief Financial Officer (or designee) along with the appropriate personnel. Overall project
bidding will be handled in accordance with university policy. After the contract
award, project management may be delegated to appropriate campus officials
to expedite purchasing, change orders, and disbursements. A copy of each delegation
of authority should be sent to the Treasurer's Office.
Current General Fund Projects. As described in 6
of this policy, facilities projects over $100,000 will be handled through
plant funds. Alteration and renovation projects with estimated costs less
than $100,000 are to be accounted for in general funds. Campuses and units
should complete a REQUEST FOR APPROVAL OF CURRENT
GENERAL RENOVATION, ALTERATION, OR CAPITAL OUTLAY PROJECT
T-49) and forward the request for the necessary approvals
(see Appendix B). This procedure is not required for campus renovation and
alteration projects costing less than $25,000.
Cash disbursements for construction and related expenses charged against plant funds will be made only on receipt of original documentation with the necessary approvals and the account to be charged.Theoriginal documents may consist of an invoice or a contractor's statement of materials in place or construction in progress. With the exception of real estate purchases, documentation to disburse plant funds must be approved for payment by the Director of Facilities Planning. The director will establish the procedures and prior approvals necessary to ensure that items have been received or constructed according to contract specifications.
The Treasurer's Office will create a monthly ledger report of Unexpended Plant Funds for each project account presenting the allocation, encumbrances, disbursements, and unencumbered balance. This monthly report will be made available to the Senior Vice President and Chief Financial Officer (or designee), Director of Facilities Planning, Director of Real Estate Administration, and appropriate campus representatives.
The Director of Facilities Planning will prepare a monthly status report of major capital outlay projects to reflect funding and obligations not yet reported by the Treasurer's Office. This report will be distributed to appropriate campus and unit personnel.
The Office of Real Estate Administration is responsible for the acquisition
and disposition of all university real property: institutional, gift, and
leased property. In general, Real Estate Administration may inspect property,
prepare site inspection reports, prepare deeds, request appraisals, manage
property, determine highest and best use of the property, and prepare closing
documents. Real Estate Administration is under the direction of the Associate
Vice President of Capital Projects and the Senior Vice President and Chief
Financial Officer (or designee).
The State Department of Finance and Administration, Division of Real Estate
Administration has the authority and responsibility to manage the acquisition
and disposal of real property by the state of Tennessee. Whenever real estate
transactions require approval outside the university system, Real Estate Administration
will coordinate the process with Finance and Administration. Finance and Administration
also has supporting duties to the State Building Commission. Whenever university
projects require the approval of the commission, Real Estate Administration will
work with Finance and Administration to obtain the approval.
Institutional Property. Real Estate Administration manages the acquisition
of all institutional property. Institutional property is acquired and
supported by state appropriations and is generally considered campus properties
(Knoxville, Martin, Chattanooga, Health Science Center, UTSI, and the
Institute of Agriculture). The University of Tennessee Board of Trustees,
the Tennessee Higher Education Commission, the State Department of Finance
and Administration, and the State Building Commission must give their
approval before any property can be bought or sold. Acquisition of institutional
property must also comply with the approved Land Acquisition Plan or Master
Plan of the campus for the purpose of campus expansion.
Gift Property. Gift property is considered to be all real property
the university acquires from donors. This may be property acquired by
deed or devise. Real Estate Administration is responsible for managing all
gift real property throughout the entire process from acquisition to closing.
The sale of gift property is subject to the approval of the Board of Trustees,
but not of the State Building Commission.
Leased Property. Real Estate Administration is the proponent agency
for the acquisition of all real property by lease. Refer to FISCAL
POLICY FI0625 for leasing procedures.
Acquisition. Rules and regulations outlined by Finance and Administration,
TCA 4-15-102, TCA 12-2-112, and the Real Property Administration 0620-2-2 govern the acquisition of property by the University of Tennessee.
When the university desires to purchase property for general campus expansion,
the state legislature will have appropriated sufficient funds for the acquisition.
The deed to property acquired by the university will be titled to the "State
of Tennessee." Real Estate Administration will obtain the approval for the acquisition
from the campus or unit Chief Business Officer and the Senior Vice President and
Chief Financial Officer (or designee). Prior to the acquisition, the University of
Tennessee Board of Trustees and the Tennessee Higher Education Commission must have approved
the Land Acquisition Plan or the campus Master Plan delineating the property
to be acquired.
Request. The acquisition of real property begins with
a request to the State Building Commission for permission to acquire the
property for the purpose of campus expansion. A request for property acquisition
by purchase may originate within any budget entity. The campus or unit
chief business officer should forward the request to Real Estate Administration,
which will determine that no other university properties can be used for
the required project or activity and that the university will acquire
only the interest that best suits the proposed project.
Available Funds. The campus or unit chief business
officer will determine whether funds are available and not otherwise encumbered.
For any acquisition to be funded by issuance of debt, the campus
or unit business office must prepare pro forma funding statements
outlining the projected funding, timing, and requirements. Total funds
required include all fees and other costs incurred as part of a real property
transaction. Fees and other costs may include survey, appraisal fees,
title policy fees, closing costs, and demolition and relocation assistance.
(All relocation assistance payments as required in Chapter 608, Public
Acts of 1972 will be calculated by Real Estate Administration and approved
by the Senior Vice President and Chief Financial Officer (or designee).
Land Acquisition Plan. Any proposed real property acquisition
will be shown on the approved Campus Plan and/or Land Acquisition Program
for the budget entity. If the property to be acquired is not within the
area shown as the future campus boundaries, the university, through Real
Estate Administration, must submit a revised Land Acquisition Plan to the
Board of Trustees and to the Tennessee Higher Education Commission. This
requirement does not apply to non-campus property, such as property with
the Research and Education Centers.
Required Approvals. The university must obtain approval
for acquisition by the Tennessee Higher Education Commission, Finance
and Administration, and the State Building Commission. Real Estate Administration
will manage the state approval process.
Acquisition Process. Finance and Administration will
work with the university throughout the acquisition process. State real
property acquisition procedures govern this process. After negotiations
with the property owner have led to a business understanding, Real Estate
Administration will prepare an Option to Purchase form or contract for purchase.
Real Estate Administration will process the option or contract through the
contract review procedure for signature by a university vice president
and state officials. Finance and Administration will prepare a draft deed
that requires the state attorney general's approval. After such approval,
a closing date is set. The title company will record the deed in the county
register's office, and the original is sent to the State Real Property Administration
Office, with copies sent to Real Estate Administration. In certain instances,
it may be necessary or advantageous for the university to appoint a local
attorney for the purpose of title examination and/or deed preparation
and closing services. Finance and Administration must approve the appointment
of an attorney. Real Estate Administration must send a DISBURSEMENT
AUTHORIZATION FOR PURCHASE OF REAL PROPERTY (FORM T-48)
to the treasurer to initiate payment for the real property purchase. In
addition, Real Estate Administration must file and maintain an approved Real
Property Transaction Request form (RPM-1), the survey and/or legal description,
title search, appraised documents, contract or options to purchase, closing
statements, and letters of correspondence pertaining to the acquisition.
Request. To sell property declared surplus to the university's
needs, Real Estate Administration must contact Finance and Administration
and be in compliance with all current operating procedures of the State
Building Commission. Finance and Administration will determine whether
a state agency or department has a need to acquire (by purchase or exchange
of real property) the property declared surplus by the university. Real
Estate Administration will prepare and process Real Estate Management Transaction
forms and Land Disposal Questionnaires to Finance and Administration.
Closing. If no state department, agency, or institution
requests the surplus property, Real Estate Administration through Finance
and Administration will manage the sale of the surplus property. The process
will operate under state law, Finance and Administration guidelines, and
State Building Commission policies and procedures in effect for the disposal
of surplus property.
Easements and Rights-of-way. The granting of easements
and rights-of-way will be on the basis of fair market value except in
cases where an economical benefit will accrue to the university. The University
of Tennessee Board of Trustees and the State Building Commission must
approve all grants of easements and rights-of-way. Current state law and
Finance and Administration and State Building Commission policies govern
any grants of easements or rights-of-way.
Exchange of Property. From time to time, the university
may wish to exchange properties, easements, or rights-of-way with the
state or another governmental agency where the benefits will accrue to
both parties and the citizens of the state of Tennessee. The University
of Tennessee Board of Trustees must approve all exchanges of real property.
Conveyance to other state agencies will be by a Transfer of Jurisdiction
handled through Finance and Administration.
Services by State Division of Real Property Administration.
Finance and Administration will usually handle the appraisal, advertising,
bid procedure, and evaluation of bids for the university.
Condemnation. Real Estate Administration will send a memo to the university's
general counsel requesting that they send a written request to the Board of
Trustees to approve condemnation proceedings. Upon the Board's approval, the
general counsel will prepare the legal proceedings for condemnation with the
assistance of Real Estate Administration. When the university administration determines
that the property is required for university purposes and that funds are available,
the procedures contained in 24 above should be followed whenever
possible. This authority is granted to the university by Tennessee Code
Annotated, Sections 23-17-301 and 29-16-101 to 29-16-124, inclusive, and
Sections 49-3-1101 to 49-3-1103, inclusive as amended.
Encumbered Property. All real property acquired will be titled in
the name of "The University of Tennessee." Generally, all property will be
acquired unencumbered. The development officer, with the assistance of Real
Estate Administration, will ensure there are no back taxes on the property. Normal
survey exceptions (i.e., easements for utility lines, set-back lines, right-of-way
lines, etc., that do not impair the university's usage) and current-year real
estate tax exceptions will be approved. Real Estate Administration and the development
office must address any environmental concerns before gift property is accepted.
Request. Before completing negotiations to accept a
gift of real property to the university, the development office will inform
General Counsel, the Treasurer, and Real Estate Administration. Development
will prepare the Initial Property Reports and forward them to Real Estate
Administration. The university will not pay for appraisals on potential gift
property unless approved by the Senior Vice President and Chief Financial Officer
(or designee). Appraisals secured by the university on university property acquired by
gift may not be used to substantiate property value for tax purposes as
reported by the donor on IRS Form 8283. Real Estate Administration will determine
the need for a new appraisal based on the director's review of the donor's
appraisal, reasonableness of the comparable sales used, and age of the
Required Approvals. The Senior Vice President and Chief Financial Officer (or
designee) and the general counsel must give written approval prior to
the acceptance of any deed conveying real property from any source. This
approval will be in the form of the gift acceptance letter.
Deed Preparation. The deed will be recorded in the
register's office in the courthouse of the county where the property is
located. The recorded deed will be filed in the official documents file.
Administration. All expenses related to the acquisition, maintenance,
and disposition of gift real property will be accumulated and netted from
property sale proceeds or income received on the property. All such expenses
incurred by the university are to follow university purchasing procedures and
be approved by Real Estate Administration. If, however, a university entity
uses the real property during the university's holding period, current operating
funds can be used to pay for maintenance and operating expenses. Recurring
expenditures (annual taxes, monthly utility bills, annual property owner fees,
etc.) will be handled by the Treasurer's
Office, after approval by Real Estate Administration. Real Estate Administration,
through the Office of Risk Management,
will procure insurance coverage on gift property.
Real Estate Administration will prepare an asset management and disposition
plan to determine what is the most cost-effective alternative concerning
the selling or holding of the gift property. It is the university's desire
to quickly and actively market the property for sale. Real Estate Administration
may acquire a market analysis report from realtors active in the market
and a current appraisal to determine the fair market value of the property.
Updated Appraisal. If an updated appraisal is necessary,
Real Estate Administration will determine the particular appraisal needed
(i.e., an appraisal of agricultural, residential, commercial, or industrial
property) and select an appropriate, qualified appraiser.
Determination of Sale Price. Real Estate Administration
will review the appraisal and determine a fair market value. If the university
determines that the appraisal is less or more than fair market value,
another appraisal must be obtained. The university will not sell property
for less than the appraised value, unless provided in i.
Review of Original Gift Conditions. The development
office will provide the conditions and requirements of the trust, will,
or gift to Real Estate Administration. The inspection report should indicate
the account number wherein the sale proceeds will be directed as specified
in the trust.
Approval by the Board of Trustees. The sale of gift
property by the university must be approved by the University of Tennessee
Board of Trustees or the Executive Committee upon recommendation of the
Senior Vice President and Chief Financial Officer (or designee). Whenever it
is prudent to list and/or sell gift property before the next scheduled board meeting, the
president, upon the recommendation of the appropriate vice president,
has the authority to approve the sale at or above the appraised value.
Method of Sale. Real Estate Administration will determine
the method of sale to best serve the interests of the university, the
donor, and any trust beneficiaries.
Review of Offers. Upon obtaining bids or a contract
for sale, Real Estate Administration will obtain the review and approval of
the appropriate vice president, the University Treasurer, and the General
Counsel. Real Estate Administration will follow appropriate mortgage underwriting
guidelines when the university has a security interest in the property.
These guidelines include items such as credit checks, requiring personal
guarantees, minimum down payments, and competitive interest rates.
Closing Arrangements. Upon approval of the sale, Real
Estate Administration will make arrangements for closing. If the donor filed
an IRS Form 8283 and the university sells the property (within two years
of acquiring the gift property), the university must file the IRS Form
8282 within 125 days of sale closing. The Treasurer's Office will send
a copy of the Form 8282 to Real Estate Administration and the donor.
Proceeds of the Sale. Immediately after closing, Real
Estate Administration will transmit any funds received to the Treasurer's
Office to credit to the proper account. After Real Estate Administration receives
the original recorded deed back from the county register, Real Estate
Administration will send the original to the Treasurer's
Office for filing in the official documents file.
Sale at Less than Appraised. After appropriate actions
have been taken to offer proper exposure to the market, Real Estate Administration
may request approval of the University of Tennessee Board of Trustees
to sell at less than appraised value. Before seeking the Board's approval,
the request must be approved by the vice president for development and
the Senior Vice President and Chief Financial Officer (or designee).