Original Issuance Date: May 17, 2018
Last Revision Date: May 17, 2018

1. Policy Purpose

The purpose of this procedure is to outline the processes UW System Office of Capital Planning and Budget must follow when considering the acquisition of real property or agricultural land.

2. Responsible UW System Officer

Senior Associate Vice President for Capital Planning and Budget

3. Scope

This procedure applies to the acquisition of real property and land as permitted by s. 13.48(2), Wis. Stats. and s. 36.11(1), Wis. Stats. and as permitted by Regent Policy Document 13-2, Real Property Contracts: Signature Authority and Approval.  This procedure also outlines the processes for the acquisition of agricultural land for the University of Wisconsin – Madison as permitted by s. 13.48 (2)(d) Wis. Stats. and s. 36.33 (2) Wis. Stats.

4. Definitions

ALTA/ASCM Survey Map: A map and legal description of real property developed by a licensed surveyor according to American Land Title Association (ALTA) and the American Congress of Surveying and Mapping (ASCM) minimum standards.

Appraisal: A valuation completed by a licensed real property fee appraiser that determines the Fair Market Value of a property based upon a set of market assumptions.  If more than one appraisal is required to establish the acquisition and/or disposition price, the assumptions used as the basis for value must be the same for both.

Certified Survey Map: A map stamped by a licensed surveyor and recorded with the local Registry of Deeds defining ownership, easements, encroachments, and other legal elements of a property.  A Certified Survey Map (CSM) can be created when a property requires subdivision prior to acquisition or for aggregation to consolidate ownership.

Deed:  A document which conveys ownership, or title, of real property from the grantor (seller) to the grantee (buyer).  The two most common deeds used are Warranty and Quitclaim – see definitions below.

Due Diligence:  An investigatory period completed between the offer to purchase and the closing of a property sale. In this period, where research is completed on the history, ownership of the property, and state of the property.

Environmental Site Assessment:  An evaluation of the environmental history, both man-made and natural, of a site.  A Phase I/Environmental Site Assessment (ESA) must be completed to identify if any potential hazardous land uses, or improvements occurred.  This includes researching such items as Federal flood information.  If hazardous materials are suspected, a Phase II ESA must be completed including soil, air, groundwater or building materials testing.

Offer to Purchase Agreement: An agreement that outlines the terms and conditions of the acquisition.  This document can include the purchase price, terms for due diligence, contingencies, the property’s legal description, proposed date to execute the sale, and/or a down payment.

Legal Description: A geographical description of real property that locates a parcel in relation to the public land system.  A legal description of the property unambiguously identifies the location, and boundaries.

Quitclaim Deed: A deed which protects the seller any from future claims on ownership or responsibility; there is no guarantee or warranty the buyer has any future claim on the seller.  UW System issues only quitclaim deeds.

Title Insurance: An insurance policy that prevents financial loss from defects in the recorded ownership of the real property.  It protects the buyer, and lender from loss due to liens or title defects.

Title Report: A preliminary report ordered from the title insurance company during the due diligence process.  The title report will indicate the presence of any recorded restrictions on the property including covenants, easements, or liens.

Warranty Deed: A deed declaring the seller has clear title, without any known encumbrances or liens, on the property being sold.  The seller warrants no known issues but may still be held liable for future claims.

5. Procedures

The following process shall be followed by the UW System Office of Capital Planning and Budget, in consultation with the affected UW institution, when the purchase of real estate is under consideration. The institution acquiring real estate is responsible for the associated costs of the purchase.

A. Identification of Property to be Acquired on Behalf of the Board of Regents

A property can be purchased if it meets the mission and strategic vision of the university.  All buildings to be purchased must meet at least one of four project evaluation criteria, as per Regent Resolution 10831. These criteria do not apply to the acquisition of only land.

B. Define Acquisition Price

The acquisition price shall be negotiated between the UW System Office of Capital Planning and Budget and the seller. In accordance with State Building Commission Policy and Procedure Manual:

  • If acquisition price is less than $10,000 no appraisal is required;
  • If the acquisition price is expected to be greater than $10,000 but less than $25,000 only one appraisal is required;
  • If acquisition price is greater than $25,000 two appraisals are required with at least one appraisal being a full narrative format appraisal;

Note: UW System Administrative Procedure 999.B – Sale of Real Property defines different appraisal limits for sales.

C. Offer to Purchase

The Office of Capital Planning and Budget drafts offers to purchase using a standard template. Offers to purchase require review by the Office of General Counsel.  All terms and conditions must be detailed including the requirement that Board of Regents and State Building Commission must approve the purchase prior to closing.

D. Due Diligence

The UW System Office of Capital Planning and Budget shall complete due diligence for the purchase. Requirements for due diligence are as follows:

  • For an acquisition within campus boundaries, a Type III, Wisconsin Environmental Protection Act (WEPA) exclusion form must be completed;
  • For all acquisitions, a Phase I/Environmental Site Assessment must completed. Depending on the results, additional assessments may be necessary;
  • Preliminary title commitment must be obtained;
  • Contingencies from the offer must be removed;
  • A Class A-2 Property/Boundary survey must be completed;
  • A Certified Survey Map (CSM) land division may be required if the real property is part of a larger parcel and the acquisition includes only a portion of the larger parcel.

E. Donated Real Property

Land and buildings donated to the University must follow the same processes for acquisition to protect the university from receiving property that may contain environmental hazards or that does not fit within the mission of the individual institution.

F. Board of Regents Approval

Board of Regents approval is required for acquisitions of real estate located outside approved campus boundaries and for any agricultural land under Wis. Stats. 36.33. All environmental evaluations and an accepted offer to purchase must be provided prior to requesting approval by the Board of Regents.

G. State Building Commission Approval

All real estate acquisitions except for agricultural land defined under Wis. Stats. 36.33 require State Building Commission approval. This requirement includes donated land and buildings.

H. Closing

The following are required for the closing on the acquisition of real estate.

  • Warranty Deed.  The Board of Regents requires a Warranty deed from the seller.  If another deed is required by the seller, the UW System Office of General Counsel must approve.
  • Buyer’s Title Insurance.  A title commitment is preferred at least two weeks prior to closing for the full purchase price.
  • Once a closing date has been set, the title company will provide the total amount of funds due including recording fees and sales costs.  A purchase order should be created and a check issued, or wire transfer scheduled, if funds are due.
  • The title company records the deed.  If no title company is used, for example a utility purchasing a right of way, the institution is responsible for recording the deed at the County Registrar.
  • All legal documents, including appraisals and environmental reports, pertaining to the acquisition should be forwarded to UWSA Office of General Counsel.

6. Related Documents

Regent Policy Document 13-2, Real Property Contracts: Signature Authority and Approval

Wis Stats 36.11(1)(b), Protection of People; Custody and Management of Property

Wis Stats 36.33, Agricultural Lands

State Building Commission, Policy and Procedure Manual

7. Procedure History

First approved: May 17, 2018