General Background

Acquisition of real estate is governed by Board of Trustee policy, system procedure and state statutes. The Board and statutes apply in nearly a uniform manner for nearly all acquisitions, although how an acquisition is funded may impact exactly how the acquisition milestones are reached. Acquisitions generally may be funded the following ways:

  • Campus operating funds
  • General obligation bonds (legislative funding/capital budget request)
  • Revenue fund bonds (for eligible university or college projects in the revenue fund)

Real estate gifts requires the same amount of due diligence as any other acquisition.

Initiating the Acquisition

A college or university that seeks to acquire real property should initiate a request for acquisition approval from the system office, addressed to the Vice Chancellor/Chief Financial Officer. A sample letter is below:

The acquisition process generally happens in five parts (with some overlap). This milestone list assumes funding is already confirmed (whether bonding funds or campus operating funds.) The process milestones are:

  1. Preliminary Identification, Investigation and Feasibility Analysis
  2. Contracting
  3. Due Diligence, Consultation and Approvals
  4. Closing
  5. Post-Closing/Occupancy

Preliminary Identification, Investigation and Feasibility Analysis

Before acquiring any parcel of real estate, there are two fundamental questions to ask:

  1. Is this property part of the campus's Comprehensive Facilities Plan, and
  2. How much is this acquisition going to cost?

An acquisition parcel either is or is not part of the campus plan. If it isn't, then the campus will be required to explain why this acquisition is necessary.

The property's value drives what approvals are required. Legislative notice is required for all real estate acquisitions prior to closing, which shall be coordinated with the system office. Upon contacting the system office, the campus should expect to provide the basic details regarding the property, which include:

  • Location (legal and address)
  • Ownership and contact information
  • Improvements
  • Square footage of improvements and/or acreage of land
  • Asking price
  • Survey, sketch or plat
  • Funding source
  • Any known encumbrances on the property

As a preliminary matter, the campus should first obtain an appraisal from an independent real estate appraiser. A good source for finding appraisal firms is the Appraisal Institute.

For bond funded purchases, this letter is not required.


After reaching a verbal understanding with the property owner regarding the business terms, Real Estate Services will prepare a purchase agreement. Legal counsel assistance my be necessary depending on the nature of the acquisition. Generally, due diligence should commence upon execution of the purchase agreement.

Due Diligence, Consultation and Approvals

Due diligence should commence as soon as it is reasonably certain that the transaction will be moving ahead. The campus should initiate the following investigations:

  • Phase I Environmental Investigation (ASTM E1527-05), which includes a hazardous materials assessment
  • Facilities Condition Assessment (for improved property)
  • Title investigation in the form of a title commitment or attorney's title opinion
  • ALTA/ACSM Survey

Legislative consultation is required for all acquisitions, regardless of funding sources.

Board of Trustees approval is required for the acquisition of real estate when

  • campus operating funds are used, and
  • the purchase price equals or exceeds $1,000,000 or 1% of the acquiring institution's fiscal year operating budget.

The Board of Trustees approval is provided at the same time the capital budget or revenue fund projects are approved. In other words, additional Board approval is not required for projects funded by general obligation bonds or revenue fund bonds, unless the transaction changes significantly.

Board Policy delegates authority to the Chancellor to review and approve all real estate transactions and includes the authority to execute and deliver all documents relating to the acquisition of real property.

A campus should be prepared to show evidence of student notification and/or consultation of the project. All acquisitions require legislative consultation prior to closing.


Prior to closing, Real Estate Services shall prepare the legislative concurrence letter for Vice-Chancellor/Chief Financial Officer delivery to the legislature. All encumbrances and investigative issues should be addressed and solutions identified. Closing should be with a local title company.

A closing checklist/grid is provided for campus use.


In anticipation of closing and occupancy, the campus should have already arranged any necessary utility hookups, exchange of keys, and notification to the county assessor of the changed ownership status.