February 4, 2000
R.S. 33:4712 - Sale, Exchange, or Lease of Property By A Municipality
By: John Gallagher
Staff Attorney
Occasionally, municipalities find themselves with equipment such as vehicles, supplies and even immovable property which is no longer needed for use. When this situation arises, the municipalities may not donate, sell or even exchange this property without following certain procedures outlined in Louisiana law. R.S. 33:4712(A) allows municipalities to sell, lease for a term of up to ninety-nine years, exchange or otherwise dispose of its property if, in the opinion of the governing authority, the property is no longer needed for public purposes. These transactions may be with other political subdivisions of the state, private persons, or at a public or private sale. Any property, including real property, may be involved. It is very important to remember that the property must be deemed surplus or, no longer needed for public purposes, before any transaction may be entered into by the municipality.
When entering into a transaction under this statute and before a final disposition of the property is made, it is imperative that the guidelines found in R.S. 33:4712(B) be followed. An ordinance must be introduced, giving the reasons for the action on the part of the governing authority, fixing the minimum price and terms of the sale, lease, exchange, or other contract to be made. If the transaction involves an exchange of immovable property valued at $100,000 or more, an additional step is required. Prior to the introduction of an ordinance, the municipality shall, for a minimum of three times in thirty days, advertise for and receive other proposals for the exchange of the property involved which are comparable with the proposed exchange (Exchanges involving public roads, streets, highways, servitudes, rights of way, and/or public franchises are not subject to this requirement). Thereafter, notice of the proposed ordinance must be published three times in fifteen days, one week apart, in a newspaper published in the municipality, or if there is no such newspaper, in a newspaper having a general circulation in the municipality. If there is no such newspaper, then by posting in three public and conspicuous places in the municipality.
Opposition to Proposed Ordinance
R.S. 33:4712(C) provides that any opposition to the proposed ordinance shall be:
1. Made in writing;
2. Filed with the clerk or secretary of the municipality within fifteen days after posting of the notice or its first publication.
If an opposition is filed, the governing authority shall not adopt the ordinance until a hearing has been held. If the ordinance is adopted, it shall not become effective until ten days after its passage, during which time any interested citizen may apply to the district court having jurisdiction of the municipality for an order restraining the disposition of the property. After the ordinance becomes effective, it cannot be contested for any reason.
Property Dedicated for Research and Development Purposes
R.S. 33:4712(E) provides that when the transaction is being made to other political, public, or quasi-public corporations, to state agencies or to private persons and the property is dedicated for the purpose of creating a research and development park in cooperation with the Board of Supervisors of Louisiana State University, Southern University, or the Board of Trustees for State Colleges and Universities and the governing authority of the municipality, then the transaction is exempt from advertisement or bid.
Before disposition can be made, an ordinance must be introduced giving the reasons for the actions on the part of the governing authority and fixing the terms of the sale, lease, exchange or other contract to be entered into with respect to the property being dedicated. The assumption of the obligation by the vendee or lessee to establish, operate, and manage a research and development park and other requirements mutually agreed upon by the parties shall constitute valid consideration to the municipality for the transaction.
Transactions of $5,000 or Less
R.S. 33:4712(F) provides that a municipality may sell any movable property having an appraised value of five thousand dollars or less at a private sale provided that:
1. A resolution giving the reasons for the action and the fixing of the minimum price and terms of the sale shall be adopted.
2. Notice of the resolution and proposed sale shall be published once at least fifteen days prior to the date of the sale in the official journal.
3. The sale shall be made to the person with the highest bid.
If you would like a copy of R.S. 33:4712 or have any questions, please feel free to contact me at the LMA at (225) 344-5001 or (800) 234-8274. You may also contact me at the Louisiana Municipal Association, P.O. Box 4327, Baton Rouge, Louisiana 70821-4327.