Common use of PROPERTY MANAGEMENT AND DISPOSITION Clause in Contracts

PROPERTY MANAGEMENT AND DISPOSITION. If you use CDBG funds to acquire real or personal property, Federal regulations make you, the subrecipient, responsible for ensuring that the property continues to be used for its intended (and approved) purpose, that you keep track of it, that you take care of it, and that if you sell it, you reimburse the grantee for the CDBG share of the property’s value. This fairly straightforward proposition about the ownership, use, management, and disposition of property is complicated by two facts. First, the rules about property management and disposition differ slightly depending on whether you are a public-sector or private-sector subrecipient. (The rules are generally more explicit for governmental subrecipients). Second, the rules depend on the nature of the property. Real property (e.g., land, buildings) is treated differently than personal property (e.g., equipment, supplies, intangible property like copyrights). This chapter outlines the rules for subrecipients regarding the ownership, management, and disposition of real and personal property. Despite the different treatments, there are several key themes applicable to most property that should be emphasized at the outset: • Property can only be acquired with CDBG funds for a specific purpose that must be approved by the grantee and should be made a part of the Subrecipient Agreement. • The use of that property for the approved purpose must continue; in the case of personal property, generally for if the subrecipient owns it and the property is needed for the CDBG activity, and in the case of real property (acquired or improved with CDBG funds in excess of $25,000), generally for at least 5 years following the expiration of the Subrecipient Agreement. • If you own the property, you should keep accurate records for it (e.g., purchase date, price, location, physical description, maintenance history and condition, original and current use, and other inventory types of data). • You have to control the use of the property (in accordance with its intended purpose) and • If you no longer need the property, you can dispose of it but only according to specific rules (such as paying back the grantee, accounting for program income, etc.). The following chart summarizes the applicability of specific sections of the regulations to particular categories of property for governmental and private subrecipients and shows the relevant regulations affecting its ownership, use, and disposition.

PROPERTY MANAGEMENT AND DISPOSITION. If you use CDBG funds to acquire real or personal property, Federal regulations make you, the subrecipient, responsible for ensuring that the property continues to be used for its intended (and approved) purpose, that you keep track of it, that you take care of it, and that if you sell it, you reimburse the grantee for the CDBG share of the property’s value. This fairly straightforward proposition about the ownership, use, management, and disposition of property is complicated by two facts. First, the rules about property management and disposition differ slightly depending on whether you are a public-sector or private-sector subrecipient. (The rules are generally more explicit for governmental subrecipients). Second, the rules depend on the nature of the property. Real property (e.g., land, buildings) is treated differently than personal property (e.g., equipment, supplies, intangible property like copyrights). This chapter outlines the rules for subrecipients regarding the ownership, management, and disposition of real and personal property. Despite the different treatments, there are several key themes applicable to most property that should be emphasized at the outset: •  Property can only be acquired with CDBG funds for a specific purpose that must be approved by the grantee and should be made a part of the Subrecipient Agreement. •  The use of that property for the approved purpose must continue; in the case of personal property, generally for if the subrecipient owns it and the property is needed for the CDBG activity, and in the case of real property (acquired or improved with CDBG funds in excess of $25,000), generally for at least 5 years following the expiration of the Subrecipient Agreement. •  If you own the property, you should keep accurate records for it (e.g., purchase date, price, location, physical description, maintenance history and condition, original and current use, and other inventory types of data). •  You have to control the use of the property (in accordance with its intended purpose) and •  If you no longer need the property, you can dispose of it but only according to specific rules (such as paying back the grantee, accounting for program income, etc.). The following chart summarizes the applicability of specific sections of the regulations to particular categories of property for governmental and private subrecipients and shows the relevant regulations affecting its ownership, use, and disposition.

PROPERTY MANAGEMENT AND DISPOSITION. If you use CDBG funds to acquire real or personal property, Federal regulations make you, the subrecipient, responsible for ensuring that the property continues to be used for its intended (and approved) purpose, that you keep track of it, that you take care of it, and that if you sell it, you reimburse the grantee for the CDBG share of the property’s value. This fairly straightforward proposition about the ownership, use, management, and disposition of property is complicated by two facts. First, the rules about property management and disposition differ slightly depending on whether you are a public-sector or private-sector subrecipient. (The rules are generally more explicit for governmental subrecipients). Second, the rules depend on the nature of the property. Real property (e.g., land, buildings) is treated differently than personal property (e.g., equipment, supplies, intangible property like copyrights). This chapter outlines the rules for subrecipients regarding the ownership, management, and disposition of real and personal property. Despite the different treatments, there are several key themes applicable to most property that should be emphasized at the outset: • Property can only be acquired with CDBG funds for a specific purpose that must be approved by the grantee and should be made a part of the Subrecipient Agreement. • The use of that property for the approved purpose must continue; in the case of personal property, generally for if the subrecipient owns it and the property is needed for the CDBG activity, and in the case of real property (acquired or improved with CDBG funds in excess of $25,000), generally for at least 5 years following the expiration of the Subrecipient Agreement. • If you own the property, you should keep accurate records for it (e.g., purchase date, price, location, physical description, maintenance history and condition, original and current use, and other inventory types of data). • You have to control the use of the property (in accordance with its intended purpose) and take good care of it (that is, take adequate steps to prevent its damage, theft, or loss). • If you no longer need the property, you can dispose of it but only according to specific rules (such as paying back the grantee, accounting for program income, etc.). The following chart summarizes the applicability of specific sections of the regulations to particular categories of property for governmental and private subrecipients and shows the relevant regulations affecting its ownership, use, and disposition. Ownership See property acquisition, 24 CFR 570.201(a), 201(c), 202, 203(a) Vested in subs Vested in subs Nonexclusive license to govt. 24 CFR 85.32 24 CFR 85.33 24 CFR 85.34 24 CFR 84.34 24 CFR 84.35 24 CFR 84.36 Use & Management 24 CFR 570.505 governs grantees; subrecipients follow 503(b)(7) * 24 CFR 85.32 24 CFR 85.33 24 CFR 84.34 24 CFR 84.35 Xxxxxxxxxxx 00 XXX 570.503(b)(7) Generally, fair- market value or proceeds returned to grantee; with grantee approval, proceeds retained as program income Residual inventories Nonexclusive license to use remains with govt.