Los Angeles Municipal Code Art. 4 Sale of Real Property No Longer Required for Use of the City

Section 7.21 Policy. 7.22 Recommendations Required of City Departments. 7.23 Notice of Sale. 7.24 Sale at Auction – Oral Bids. 7.25 Sale at Auction – Sealed Bids. 7.26 Sale at Auction – Sealed Bids and Oral Bids. 7.27 Private Sale. 7.27.1 Sale of Surplus City-Owned Remnant Property. 7.27.2 Private Sale Procedures for Economic Development Purposes. 7.27.3 Private Sale Procedures for Affordable Housing Development Purposes. 7.28 Disposition of Deposit. 7.29 Confirmation of Sale. 7.30 Reservations. 7.31 Terms of Sale. 7.32 Failure to Sell. 7.33 Compensation of Agents. 7.33.1 Sale of Property Located in the City of Los Angeles. 7.33.2 Sale of REO Property – Powers of LAHD General Manager. 7.33.3 Methods of Marketing. 7.33.4 Minimum Sales Price. 7.33.5 Term of Restricted Use. 7.33.6 Role of City Administrative Officer. 7.33.7 Approval by City Council Required.

Any real property owned by the City of Los Angeles that is no longer required for the use of the City, and which real property the public interest and necessity requires to be sold may, subject to the limitations and exceptions prescribed in the Charter, be sold, either in whole or in part, under the terms, conditions and procedures prescribed in this article. This article shall apply to departments under the control of the City Council. It shall also apply fully to, and shall govern the sale of, real properties under the jurisdiction of all departments having jurisdiction and control of their own funds, but such sales must be preceded by the request or approval of such departments. When any such latter department has a division or section which performs for such department the functions of the Department of General Services, such division or its Director or Chief shall perform the functions assigned to the Department of General Services or to the General Manager of the Department of General Services.

SECTION HISTORY

Based on Charter Sec. 393. Amended by: Ord. No. 150,946, Eff. 7-17-78; Ord. No. 152,427, Eff. 6-29-79; Ord. No. 153,104, Eff. 12-9-79; Ord. No. 171,496, Eff. 3-7-97. Readopted by Ord. No. 173,281, Eff. 6-26-00, Oper-7-1-00.

Before the Council, or the Municipal Facilities Committee for the direct sale of “remnant” properties, determines that real property proposed for sale is no longer required for the use of the City and that the public interest or necessity require its sale, the proposed sale shall be considered as follows:

(a) The Department of General Services shall determine whether the City owns a salable interest in the real property, shall appraise

said real property at its fair market value; and shall recommend a minimum sale price to the Council or the Municipal Facilities Committee, as applicable.

(b) The Bureau of Engineering shall approve the legal description of the real property and shall recommend the reservation or

exception of such portions of the real property or such easements or rights as should be retained by the City.

(c) The City Planning Department shall consider the proposed sale in relation to, and its effects upon, plans prepared by the

Department and shall verify, in writing, from the appropriate City departments that the property proposed for sale is not required for City use. All City departments that the City Planning Department deems to have an interest in the property proposed to be disposed of shall be contacted in writing by said Department. Such written contacts shall request that a reply be transmitted to the Department of City Planning advising whether the real property proposed to be disposed of is or is not required for City use in the foreseeable future. If it is judged that the property will, at some future date, be required for City use the responding Department shall give reason for such judgment. If no reply is received within fifteen (15) days the City Planning Department may then assume that the respective departments have no comments to make on the matter.

(d) In cases involving the direct sale of surplus City-owned property, except “remnants” as defined in Section 7.27.1(a), the City Administrative Officer shall review the proposed direct sale and recommend to the Council upon its propriety.

(e) In cases involving direct sales of City- owned “remnants” as defined in Section 7.27.1(a), the Department of General Services shall review the proposed sale, and shall recommend to the Municipal Facilities Committee upon its propriety. Thereafter, the Municipal Facilities Committee may determine that the public interest or necessity require completion of the sale and authorize it, including the immediate opening of escrow. In the event of such a determination by the Municipal Facilities Committee with respect to the sale of a “remnant” as defined in Section 7.27.1(a), the Municipal Facilities Committee may authorize the execution of a deed or other instrument necessary to effectuate the sale at and for the fair market value of the property as appraised by the Department of General Services, and upon the terms and conditions contained in the document entitled Title Transfer Instructions (Escrow) approved by the City Council and made a part of Council File No. 07-1894. Any substantive deviations from those terms and conditions, as determined by the City Attorney, shall require approval by the City Council by ordinance.

SECTION HISTORY

Based on Ord. No. 56,887. Amended by: Ord. No. 150,946, Eff. 7-17-78; Ord. No. 152,427, Eff. 6-29-79; Ord. No. 153,104, Eff. 12-9-79; Subsecs. (a) and (d), Ord. No. 171,496, Eff. 3-7-97. Readopted by Ord. No. 173,281, Eff. 6-26-00, Oper-7-1-00. Amended by: First Para. and Subsecs. (a) and (d) amended, Subsec. (e) added, Ord. No. 180,834, Eff. 9-20-09.

Whenever the City Council shall determine that real property owned by the City is no longer required for the use of the City, and that the public interest or necessity requires the sale thereof, said Council may by ordinance order the same to be sold. Such ordinance shall direct the City Clerk to cause Notice of Sale of such property to be published for three (3) days in a newspaper of general circulation, printed and published in this City, and said ordinance and said Notice of Sale shall specify the minimum price which will be accepted for said property, and the terms and conditions upon which the same will be sold. The ordinance shall also direct the City to post said Notice of Sale in a prominent and visible location on the real property to be sold not less than thirty (30) days prior to the sale. Said ordinance shall also state whether the sale of such property shall be by oral bid auction (Section 7.24), by sealed bid auction (Section 7.25), or by sealed bid with oral bids thereafter accepted (Section 7.26). The ordinance shall authorize the Mayor to execute a deed following confirmation of the sale and shall further authorize the Department of General Services to open an escrow and/or deliver the deed.

SECTION HISTORY

Based on Ord. No. 56,887. Amended by: Ord. No. 92,767; Ord. No. 150,946, Eff. 7-17-78; Ord. No. 152,427, Eff. 6-29-79; Ord. No. 153,104, Eff. 12-9-79; “Bureau of Engineering” changed to “Department of General Services”, Ord. No. 171,496, Eff. 3-7-97. Readopted by Ord. No. 173,281, Eff. 6-26-00, Oper-7-1-00. Amended by: Ord. No. 181,595, Eff. 4-10-11.

Whenever the Council shall determine that such sale shall be by oral bid at public auction, the auction may be held at such time and place as the Council shall specify in the Notice of Sale. No bid shall be considered unless such bidder shall, prior to the holding of the auction, deposit with the auctioneer or with another authorized person identified in the published notice at least ten percent (10%) of the amount specified in the Notice of Sale as the minimum price, or the sum of $10,000.00, whichever is less, in cash, cashier’s check or certified check as a guarantee that the person making such bid will purchase and pay for such property upon the terms and conditions specified in the Notice of Sale.

SECTION HISTORY

Based on Ord. No. 56,887. Amended by: Ord. No. 92,757; Ord. No. 150,946, Eff. 7-17-78.

Whenever the Council shall determine that such sale shall be by sealed bids, all such sealed bids shall be identified by location on the face of the envelope and shall be filed with the City Clerk at or before the time specified in the Notice of Sale. The City Clerk shall present all such sealed bids to the General Manager of the Department of General Services, or the Board or Commission designated to receive such bids, or to the Council should the Council have so ordered. Said bids shall be presented after the expiration of the time for the submission of bids. The bids shall thereupon in public session be opened, examined and declared. No bid shall be considered unless accompanied by cash deposit, cashier’s check or certified check in an amount not less than ten percent (10%) of the amount specified in the Notice of Sale as the minimum price, or the sum of $10,000.00, whichever is less, as a guarantee that the person making such bid will purchase and pay for such property

upon the terms and conditions specified in the Notice of Sale.

SECTION HISTORY

Based on Ord. No. 56,887. Amended by: Ord. No. 92,757; Ord. No. 150,946, Eff. 7-17-78; Ord. No. 171,496, Eff. 3-7-97. Readopted by Ord. No. 173,281, Eff. 6-26-00, Oper-7-1-00.

Whenever the Council shall determine that such sale shall be by sealed bids with the option to call oral bids following the opening of sealed bids, all such sealed bids shall be identified by location on the face of the envelope and shall be filed with the City Clerk at or before the time specified in the Notice of Sale. The City Clerk shall present all such sealed bids to the General Manager of the Department of General Services, or the Board or Commission designated to receive such bids, or to the Council should the Council have so ordered. Said bids shall be presented after the expiration of the time for the submission of bids. Oral bids may thereafter be called for should the General Manager of the Department of General Services, or the Board, Commission, or Council determine, by majority vote after the opening of the sealed bids, that the receipt of oral bids is in the public interest. The Notice of Sale shall state that oral bids may be called for only at the discretion of the General Manager of the Department of General Services, the Board, Commission or Council which opens the bids. No sealed bid shall be considered unless accompanied by a cash deposit, cashier’s check or certified check in an amount not less than ten percent (10%) of the amount specified in the Notice of Sale as the minimum price, or the sum of $10,000.00, whichever is less, as a guarantee that the person making such bid will purchase and pay for such property upon the terms and conditions specified in the Notice of Sale. No oral bid will be considered unless prior thereto such deposit shall have been made by the bidder with the City Clerk, either accompanying the sealed bid or by delivering same to the City Clerk prior to the call for oral bids.

SECTION HISTORY

Based on Ord. No. 56,887. Amended by: Ord. No. 92,757; Ord. No. 150,946, Eff. 7-17-78; Ord. No. 171,496, Eff. 3-7-97. Readopted by Ord. No. 173,281, Eff. 6-26-00, Oper-7-1-00.

The deposits made by all unsuccessful bidders shall be returned to such bidder at the completion of the auction. The deposit made by the high bidder shall be retained by the City as a guarantee that the person making such high bid will complete the purchase, and, at the opening of escrow, it shall be utilized as a part of the purchase price.

Should the high bidder not complete the purchase, the deposit shall be retained by the City of Los Angeles as liquidated damages suffered by the City for the failure to complete said purchase. Provided, however, that the City Council by two-thirds vote of all its members and for good cause shown may order the refund of all or any portion of the deposit of a person failing to complete the purchase, but the General Manager of the Department of General Services, the Board or Commission of a department having control of its own funds must first approve such refund.

SECTION HISTORY

Based on Ord. No. 56,887 Amended by: Ord. No. 92,757; Ord. No. 142,590, Eff. 12-3-71; Ord. No. 150,946, Eff. 7-17-78; Second Unnumbered Para., Ord. No. 171,496, Eff. 3-7-97. Readopted by Ord. No. 173,281, Eff. 6-26-00, Oper-7-1-00.

The Council may, in the ordinance ordering the sale of the real property, reserve to itself the power to confirm the sale, or, it may authorize the confirmation by the General Manager of the Department of General Services, a Board or Commission. In the event the Council reserves to itself the power to confirm the sale, such confirmation shall be by a majority vote of all of its members. Until the time the Council confirms the sale, the Council may reject all bids or may withdraw the real property from sale. In the event the Council authorizes the General Manager of the Department of General Services, a Board or Commission to confirm the sale, the Notice of Sale shall provide that said General Manager, Board or Commission may confirm the sale to the highest responsible bidder, or its successors or assigns, providing that no sale for less than the minimum price shall be confirmed; and further providing that said General Manager, Board or Commission may reject any and all bids and that either the Council or said General Manager, Board or Commission may withdraw any of the real property from sale until such time as the sale is confirmed.

SECTION HISTORY

Based on Ord. No. 56,887. Amended by: Ord. No. 92,757; Ord. No. 150,946, Eff. 7-17-78; Ord. No. 171,496, Eff. 3-7-97. Readopted by Ord. No. 173,281, Eff. 6-26-00, Oper-7-1-00.

The ordinance ordering the sale and the Notice of Sale shall provide that all of the real properties shall be sold excepting and reserving to the City of Los Angeles all oil, gas, water and mineral rights without, however, the right to surface for the extraction of said oil, gas, water or minerals. Said ordinance and notice shall further state that the sale is made subject to covenants, conditions, restrictions, easements, reservations, rights and rights-of-way of record, and subject to any rights-of-way which may be apparent if a visual inspection is made of said real property. The ordinance and notice may provide that particular covenants, conditions, restrictions, easements, reservations, rights and rights-of-way, which are owned by the City of Los Angeles, may be released and relinquished if it is found that they are no longer required for the use of the City. All escrow agreements and deeds shall also contain such exceptions, reservations, and conditions.

SECTION HISTORY

Based on Ord. No. 56,887. Amended by: Ord. No. 92,757; Ord. No. 150,946, Eff. 1-17-78.

The Council may determine, in the ordinance ordering the sale, whether the sale shall be for cash or whether payments may be made in installments.

In the event the sale is to be for cash, the Notice of Sale shall provide, and the City shall require, that the full balance of the purchase price shall be paid to the City by the successful bidder on or before a date three months after that successful bidder has been notified by the Department of General Services that the sale has been confirmed. Provided, that if payment is deferred for more than two months after the notice confirming the sale, interest at one percent (1%) per month or fraction thereof shall be charged for each month or fraction thereof in excess of two months.

In the event the sale price is to be paid in installments, the Notice of Sale shall provide, and the City shall require, that payment in full shall be completed no later than five (5) years from the date of the note and the deed of trust which are required to be delivered to the Department of General Services. The Notice of Sale shall call for the successful bidder to, and that bidder shall, complete a down payment which includes the ten percent (10%) bid deposit, in a sum not less than one-third of the total successful bid purchase price. The Notice of Sale shall also establish when the down payment is to be completed and shall provide that the bidder will thereafter deliver to the Department of General Services, within thirty (30) days of notification by the Department of General Services that the sale has been confirmed, a note and deed of trust in a form acceptable to the General Manager of the Department of General Services to secure the payment of the balance of the purchase price and the successful bidder shall comply therewith. The note shall provide for interest at a rate specified in the ordinance and the Notice of Sale to be paid periodically and shall further provide that payment of the purchase price in full shall be made not more than five (5) years from the date of the note and deed of trust, which purchase price payment may be payable in installments or may be payable in a lump sum.

Payments may be made to the City or to an independent escrow, whichever the Notice of Sale shall designate, and in the manner provided in that Notice, the cash payment or down payment, whichever is applicable, shall be made prior to the delivery of the deed, or as a condition of the delivery of the deed, provided, however, that a bid deposit made to the City may be held by the City and need not be delivered to an escrow.

SECTION HISTORY

Based on Ord. No. 56,887. Amended by: Ord. No. 91,648; Ord. No. 150,946, Eff. 7-17-78; Ord. No. 152,427, Eff. 6-29-79; Ord. No. 153,104, Eff. 12-9-79; Ord. No. 158,025, Eff. 8- 14-83; Second and Third Unnumbered Paras., Ord. No. 171,496, Eff. 3-7-97. Readopted by Ord. No. 173,281, Eff. 6-26-00, Oper-7-1-00.

Should no acceptable bid be received or should the bids be rejected or the property withdrawn from sale, the ordinance ordering the sale shall be deemed of no further force and effect unless the ordinance authorizes the General Manager of the Department of General Services, Board or Commission to cause another notice of sale to be published and a sale to be held, which authorization shall specify a date after which it shall no longer be valid.

SECTION HISTORY

Based on Ord No. 56,887. Amended by: Subsec. (a), Ord. No. 86,653; Ord. No. 150,946, Eff. 7-17-78; Ord. No. 171,496, Eff. 3-7-97. Readopted by Ord. No. 173,281, Eff. 6-26-00, Oper-7-1-00.