D.2. Real Property and Related Gifts
January 1989
Development Policy and Administration Manual
Chapter IV. Gift Administration Procedures
Section D. Special Procedures for Various Types of
Noncash Gifts
*************************************************************
REAL PROPERTY AND RELATED GIFTS
Real Property
Gifts of real property to The Regents valued in excess of $50,000
must be accepted by The Regents; those valued at $50,000 or less
may be accepted by the President. Additionally, the Policy on
Campus Foundations (see Section II: B.1) provides that The
Regents are to authorize the acceptance of gifts of real property
to the Campus Foundations, with certain exceptions.
The campus is responsible for negotiating gifts of real property
with the donor, and for obtaining a title report to confirm that
title vests in the donor and is clear of liens and restrictions.
Title reports for gifts to The Regents should be ordered by
calling Betty Birdsall (415/642-0181) in the Treasurer's Office.
Campus Foundations may also take advantage of this service. The
process usually takes up to two weeks, and the fee is charged to
the campus. The campus is then responsible for reviewing the
property's title, value, and potential for the existence of
hazardous substances (see below). When agreement has been
reached, and a decision made to proceed toward acceptance, the
donor should be instructed to execute a deed. Assistance with
these documents may be obtained from the General Counsel's
Office.
When these things have been accomplished, the campus forwards a
draft Regents' Item, with copies of the letter of gift, the
original deed, the title report, an appraisal, and the toxic
waste certification form to the Development Policy and Adminis-
tration Office, Office of the President. The Regents' Item
should propose acceptance of the property and consent to record-
ation of the deed (see Section III: B.2, Preparing Regents'
Items).
After approval, the original deed will be forwarded to the Secre-
tary of The Regents, who will attach a Certificate of Acceptance,
which will be forwarded with the deed by the Treasurer to the
County Recorder for recordation, following confirmation by the
Treasurer that there have been no changes in the condition of
title. Related documents, such as Assignments of Leases, are
also processed at this time by the Treasurer's Office. After the
deed is recorded, it is forwarded to the Secretary of The Regents
for permanent retention.
If the property is to be retained by the University, arrangements
must be made to properly insure the property while it is in the
University's hands if it is not covered under the University's
self-insurance.
Reviewing Property for Hazardous Substances
Under existing law, current owners can be held fully liable for
cleaning up property contaminated by hazardous wastes, even when
prior owners or occupants were responsible for causing the con-
tamination. Clean-up costs can range up to many millions of
dollars (e.g., where groundwater is contaminated and has spread).
There have been instances in which donors have knowingly or
unknowingly given contaminated property to charities. Although a
current property owner may be able to recover clean-up costs from
prior owners and operators, the costs, delay, and legal risks
associated with such lawsuits are often prohibitive.
In order to protect the University from the high risk associated
with accepting contaminated property, screening procedures are
being developed for gifts of property to both The Regents and
Campus Foundations. Until the procedures are coordinated and
officially implemented, the following minimal precautions will be
required for gifts of real property proposed for acceptance by
The Regents, including transfers of real property from Campus
Foundations to The Regents:
1. Obtain a title history that includes a chain of title
and copies of current and expired property interests,
liens, and encumbrances. Such histories can be ordered
for property offered to The Regents or a Campus Founda-
tion by calling Betty Birdsall (415/642-0180) in the
Treasurer's Office. The history should go back to the
time the property was first developed or to 1915,
whichever is later. This type of history will indicate
whether the property was owned by government agencies
or companies that may have handled hazardous materials,
and will also reveal recorded leases by such entities.
2. If a decision is made to accept the property or to
recommend its acceptance, obtain from the donor a Toxic
Waste Certification (sample on the next page).
If the property appears from the title history likely to be free
of hazardous substances, a Regents' item proposing its acceptance
may be submitted to the Office of the President.
If the title history indicates possible problems but the campus
wants to pursue further review, call Development Policy and
Administration, Office of the President, for advice.
University of California
Office of the Vice President--
Budget and University Relations
December 15, 1989
PROCEDURES FOR REVIEWING GIFTS OF REAL PROPERTY
FOR HAZARDOUS SUBSTANCES
Under existing law,(These laws include the Federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980 as
amended by the Superfund Amendment and Reauthorization Act of
1986 (24 U.S.F. 9600 et seq.), the California Substance Account
Act, and the California Porter-Cologne Water Quality Control
Act.) current owners can be held fully liable for cleaning up
property contaminated by hazardous wastes, even when prior owners
or operators were responsible for causing the contamination.
There have been instances in which donors have knowingly or
unknowingly given contaminated property to charities. Although a
current property owner may be able to sue prior owners and
operators to recover clean-up costs, the costs, delay, and legal
risks associated with such lawsuits are often prohibitive.
In order to protect the University and Campus Foundations from
the high risk associated with accepting contaminated property,
the following screening is required for gifts of real property to
both The Regents and Campus Foundations. These procedures apply
as well to property acquired by bequest, prior to recording of
the decree of distribution, or in trust.
The screening process consists of a four-stage investigation
modeled on the accepted standards used in current real estate
transactions and often required by lending institutions. A risk
assessment is made at the conclusion of each stage. The four
stages of the process are described in the following sections.
STAGE ONE
DOCUMENT REVIEW AND PRELIMINARY SITE INSPECTION
Stage One is completed for all gifts of real property, regardless
of type (residential, commercial, or undeveloped), before
acceptance and transfer of title.
1. Obtain a title history that includes a chain of title and
copies of current and expired property interests, liens, and
encumbrances.
Such histories can be ordered for property offered to The
Regents or a Campus Foundation by calling the Real Estate
Assistant in the Treasurer's Office. These are obtainable
at no charge if title insurance is purchased from the
company whose services are made available through the
Treasurer's Office.
The title history should go back to the time the property
was first developed or 1914, whichever is later. This type
of title history will indicate whether the property was
owned by government agencies or private companies that may
have handled hazardous materials, and also will reveal
recorded leases by such entities.
(A checklist of "high risk industries" is provided for
reference when reviewing the title history; however, this
list should not be viewed as all-inclusive.)
2. Obtain a list of all regulatory agency permits for the site,
if applicable (e.g., underground tanks, wastewater
discharge, hazardous substances, agricultural chemicals).
An information guide to regulatory agencies is available
from the Due Diligence Coordinator, Office of Long Range
Development and Environmental Planning, in the Office of the
President.
3. Obtain from the donor a completed and signed Real Property
Environmental Certificate (see sample provided).
This includes disclosure of known or suspected environmental
conditions affecting the property (e.g., probable locations
of asbestos), similar to the
disclosure statement required of sellers of real property.
(A checklist to assist the donor with this disclosure is
provided.)
4. Have a preliminary site inspection performed by a campus
(All references to "campus" include Laboratories and other
units, e.g., the Division of Agriculture and Natural
Resources.) representative. This inspection should include
observation of the adjacent and surrounding area as well.
Prepare a summary report of observations.
(A checklist of "red flag items" is provided; also, the
checklist of "high risk industries" will assist with the
observation of the adjacent and surrounding area.)
5. Three choices are possible at this juncture:
a. If it appears, from items 1 through 4 above, that the
property is likely to be free of hazardous substances,
a decision may be made to recommend acceptance of the
property.
At this point a Regents' agenda item proposing the
property's acceptance may be submitted to the
Office of the President, or the appropriate steps
may be taken to accept the gift under the policies
of the Campus Foundation. In either case, the
Real Property Environmental Certificate is to be
included.
b. If items 1 through 4 indicate possible problems with
the property or surrounding area related to hazardous
substances, but the campus wishes to pursue further
review, proceed to Stage Two.
c. The campus may determine that the potential risks
outweigh the advantages of acquisition of the property
and may decide to proceed no further.
NOTE: It is strongly recommended that the decision at this
point, as well as at the end of subsequent stages, be
made in consultation with the campus Environmental
Health and Safety (EH&S) officer, or equivalent, and
the Due Diligence Coordinator in the Office of the
President.
STAGE TWO
ASBESTOS ANALYSIS, FURTHER SITE INSPECTION,
AND ENVIRONMENTAL ASSESSMENT REPORT
It is recommended, although not required, that a Stage Two review
be completed for all gifts of real property, regardless of type.
NOTE: If at this point, upon consultation with the campus
EH&S officer and the Due Diligence Coordinator, it
appears advisable to engage the services of a technical
consultant, Stages Two and Three will normally be
combined.
1. Asbestos samples are obtained from the property and are
analyzed, and a report based on these findings is prepared.
The analysis and report may be provided by the campus or by
an outside firm specializing in this field.
2. a. A review of the documents in Stage One and a site
inspection are performed by the campus EH&S officer or
by an experienced outside consultant. This inspection
also should take into consideration the adjacent and
surrounding area.
b. Complete an Environmental Assessment Report regarding
the property (see model provided).
3. Three choices are possible at this juncture:
a. If after reviewing the reports from items 1 and 2 above
it is determined that no further investigation is
needed, or the campus determines that the advantages
outweigh the risks, a decision may be made to recommend
acceptance of the property.
At this point a Regents' agenda item proposing the
property's acceptance may be submitted to the
Office of the President, or the appropriate steps
may be taken to accept the gift under the policies
of the Campus Foundation. In either case, the
Real Property Environmental Certificate and the
Environmental Assessment Report are to be
included.
b. If it is determined that a significant potential for
environmental risk exists, but the campus wishes to
pursue further review, proceed to Stage Three.
c. The campus may determine that the potential risks
outweigh the advantages of acquisition of the property
and may decide to proceed no further.
STAGE THREE
TECHNICAL EVALUATION
Stage Three is completed for selected gifts of real property,
regardless of type, before acceptance and transfer of title, if
sufficient potential for environmental risk becomes apparent
during the Stage Two review.
1. a. A technical consultant is engaged, in collaboration
with the campus EH&S officer and the Due Diligence
Coordinator in the Office of the President.
b. The technical consultant is instructed to do the
following:
(1) Review the Stage One documentation, the Stage
Two report on asbestos samples, and the
Environmental Assessment Report;
(2) visually inspect the property and the
adjacent and surrounding area, preferably
recording the results of the inspection
through the use of photographs and/or
videotapes;
(3) review publicly available documents,
including historical aerial photographs and
the files of pertinent environmental
agencies; and
(4) prepare a report indicating the degree of
probability that contamination is present at
the site and whether further investigation is
warranted.
If contamination is suspected or discovered,
the consultant should provide
(a) a preliminary account of its likely
source and possible
extent and (b) an indication of what further
tests should be undertaken.
2. Three choices are possible at this juncture:
a. If the technical consultant determines that no further
investigation is needed, or the campus determines that
the advantages outweigh the risks, a decision may be
made to recommend acceptance of the property.
At this point a Regents' agenda item proposing the
property's acceptance may be submitted to the
Office of the President, or the appropriate steps
may be taken to accept the gift under the policies
of the Campus Foundation.
In either case, the Real Property Environmental
Certificate (Stage One), the Environmental Assess-
ment Report (Stage Two), and the technical
consultant's report are to be included.
b. If the technical consultant determines that a sig-
nificant potential for environmental risk exists, but
the campus wishes to pursue further review, proceed to
Stage Four.
NOTE: The decision to proceed at this point
should be made in consultation with General
Counsel as well as with the donor, inasmuch as
reporting and clean-up requirements become issues.
c. The campus may determine that the potential risks
outweigh the advantages of acquisition of the property
and may decide to proceed no further.
STAGE FOUR
SITE TESTING
Based upon the findings in Stage Three, negotiations with the
donor, and consultation with General Counsel, a campus may wish
to proceed with Stage Four.
1. There are significant legal issues that arise if
contamination is discovered, including reporting and clean-
up requirements. Therefore, the donor must consent to the
investigation and acknowledge the reporting obligation that
may ensue.
2. Stage Four involves quantitative/qualitative tests that may
include sampling and analyzing the soil and groundwater at
the property. Site tests should be undertaken in
consultation with legal counsel experienced in environmental
law and in collaboration with the campus EH&S officer and
the Due Diligence Coordinator in the Office of the
President. This process may take one to two months, and
costs are often in the range of $10,000 to $25,000.
3. Two choices are possible at the completion of Stage Four:
a. If it is determined that there is no significant risk,
or the campus determines that the advantages outweigh
the risks, a decision may be made to recommend
acceptance of the property.
A Regents' agenda item proposing the property's
acceptance may be submitted to the Office of the
President, or the appropriate steps may be taken
to accept the gift under the policies of the
Campus Foundation.
In either case, the Real Property Environmental
Certificate (Stage One), the Environmental Assess-
ment Report (Stage Two), the technical
consultant's report (Stage Three), and the results
of the Stage Four investigation are to be
included.
b. The campus may determine that the potential risks
outweigh the advantages of acquisition of the property
and may decide to proceed no further.
University of California
Office of the Vice President--
Budget and University Relations
December 15, 1989
OUTLINE
PROCEDURES FOR REVIEWING GIFTS OF REAL PROPERTY
FOR HAZARDOUS SUBSTANCES
Introduction
Stage One: Document Review & Preliminary Site Inspection
1. Title history (see checklist)
2. List of regulatory agency permits
3. Real Property Environmental Certificate (see sample);
disclosure regarding known or suspected environmental
conditions (see checklist)
4. Preliminary site inspection (by campus
representative)/report (see checklists)
5. Three choices:
a. GO: Regents/Foundation + Certificate
b. Stage Two
c. STOP
Stage Two: Asbestos Analysis, Further Site Inspection, &
Environmental Assessment Report (may be combined
with Stage Three)
1. Asbestos analysis/report (by campus or outside firm)
2. a. Document review & further site inspection (by campus
EH&S or outside consultant)
b. Environmental Assessment Report (see model)
3. Three choices:
a. GO: Regents/Foundation + Certificate/ Environmental
Assessment Report
b. Stage Three
c. STOP
Stage Three: Technical Evaluation (may be combined with Stage
Two)
1. a. Technical consultant engaged
b. (1) Review of Stage One documentation, Stage Two
asbestos report, & Environmental Assessment Report
(2) Site inspection/photographs, videotapes
(3) Review of publicly available documents
(historical aerial photographs/files of
environmental agencies)
(4) Report
2. Three choices:
a. GO: Regents/Foundation + Certificate/ Environmental
Assessment Report/technical consultant's report
b. Stage Four
c. STOP
Stage Four: Site Testing
1. Donor consent, acknowledgment of reporting obligation
2. Quantitative/qualitative tests - soil/groundwater
3. Two choices:
a. GO: Regents/Foundation + Certificate/ Environmental
Assessment Report/technical consultant's
report/results of Stage Four investigation
b. STOP
MODEL
ENVIRONMENTAL ASSESSMENT REPORT
FOR THE ACQUISITION OF GIFT PROPERTY
(STAGE TWO)
A. Property Ownership and Location
1. Owner(s): Name, address, telephone number, Dates of
ownership (from/to)
2. Location of property: Address, county, assessor's map
ID, USGS quadrangle
B. Persons Conducting Investigation and Providing Report
1. Identification of person(s) conducting Stage Two site
inspection and investigation
2. Identification of person completing Environmental
Assessment Report (if different from B.1)
C. Summary Description of Site
Brief description of site (in terms of size, land use,
extent of development, topography/natural features, and
other details of note)
D. Site History and Use
1. Comments regarding title history
2. Zoning: Present classification and dates, prior
classification and dates
REAL PROPERTY AND RELATED GIFTS
D. Site History and Use (continued)
3. Current uses of site (heavy, medium, light):
Industrial, commercial, agricultural, residential,
other
4. Brief description of current uses of site (in terms of
product line, chemicals and materials used, wastes
generated, waste management and disposal, etc.)
5. Brief description of former uses of site (give dates
and available information as requested in D.4 above)
6. Current and prior uses of adjacent and surrounding
properties
7. List of regulatory agency permits/violations for the
site (underground storage tanks, wastewater discharge,
hazardous/flammable/radioactive storage, agricultural
chemical application/mixing/disposal, and other
applicable permits)
8. Persons interviewed relative to site history and use
(including current owner and current tenant): Name,
address, telephone number
E. Site Environmental Characteristics
1. Site layout information (attach site plan taken from
assessor's or USGS map):
a. approximate property boundaries
b. building and parking area locations
c. site utilities (types and locations)
d. easements
e. fencing
E. Site Environmental Characteristics
1. Site layout information (continued)
f. high voltage power lines
g. ponds and floodplains
h. streams
i. marshes or wetlands
j. wells
2. Site specific waste/wastewater information (refer to
site plan to show known or suspected conveyance,
storage, or disposal areas):
a. catch basins
b. septic tanks/leaching fields
c. sanitary sewers
d. underground storage tanks and supply lines
e. above ground storage tanks
f. lagoons
g. pits
h. drainage lines
i. sumps
j. ditches
k. wells (capped or uncapped)
E. Site Environmental Characteristics (continued)
2. Site specific waste/wastewater information
l. fill connections (suspected or identified)
m. unidentified cover plates, pipes, mounds of
soil, or depressions
n. other miscellaneous
3. Site specific characteristics (refer to site plan):
a. topography and surface water drainage
patterns
b. surface soil or pavement discoloration or
texture change
c. vegetation condition and changes
d. drums or other chemical storage areas
e. maintenance areas
f. odors
g. unexplained vehicle tracks (possible illegal
dumping)
h. other notable observations
4. Building inspection:
a. age, construction, and general condition
b. previous disclosure of hazardous materials in
building
c. visible signs of corrosion or other evidence
of solvent action
d. visible signs of any spillage or residues
E. Site Environmental Characteristics (continued)
4. Building inspection:
e. piles of waste or trash
f. visible signs of asbestos
(thermal/electrical/acoustical insulation,
sprayed-on fireproofing and plaster, asphalt
roofing material, various tiles, transit
panels, pipes/lagging, duct wrapping, hoods,
drains, etc.)
g. visible signs of polychlorinated biphenyls
(PCBs--transformers, capacitors, electrical
switchgear, etc.)
5. Neighborhood observations (2-4 block radius "windshield
survey"):
a. land use
b. hazardous waste generation/storage/disposal
areas
c. known contaminated sites
(toxics/releases/Superfund)
d. existing monitoring wells
e. landfills
f. gas stations and other high risk industries
g. drinking water supplies (surface or
underground within 2,500 feet of site)
F. Risk Assessment
1. Conclusions (including likelihood of on-site hazardous
material contamination, possible sources and pathways
of contamination, and off-site problems which may
affect the subject site or personnel)
F. Risk Assessment (continued)
2. Recommendations for further assessment, if necessary
HIGH RISK INDUSTRIES
ENVIRONMENTAL SITE ASSESSMENT
1. Landfills - dumps - demolition or dredge spoils disposal
sites
2. Oil refineries - well fields - tank farms
3. Metal plating/coatings
4. Metal working: foundries - welding - machining -
fabrication (esp. aluminum)
5. Auto - truck - tractor - motor maintenance and repair
6. Transportation depots: bus - truck - railroad terminals or
yards
7. Chemical or pharmaceutical manufacturers
8. High tech firms: electronics - electrical - computer
9. Gasoline - fuel oil service
10. Dry cleaners - laundries
11. Salvage - scrap or waste dealers/lots
12. Laboratories: photo-chemical - research - etc.
13. Corporation - construction - equipment yards (public or
private)
14. Utility company facilities (gas - electric)
15. Lumber yards - sawmills - wood treatment - paper companies
16. Paint manufacturers - distributors - contractors
17. Military facilities (any type - current or prior)
18. Airports - airfields - cropdusting operations
19. Battery manufacturers/recyclers
20. Concrete products fabricators
21. Nurseries or agricultural operations (esp. feedlots)
22. Pesticide - herbicide - fertilizer formulators or
applicators/exterminators
23. Food processing - packing - cold storage facilities
24. Tanneries or tallow-rendering operations
25. Drum or barrel manufacturers/distributors
26. Printing shops
27. Asphalt plants
28. Fiberglass or glass product manufacturers
29. Plastic products manufacturers
30. Rubber products manufacturers
31. Mines or sand/gravel quarries/pits
32. Sewage treatment/handling facilities (public or private)
Note: This list should not be viewed as all-inclusive.
Source: Long Range Development and Environmental Planning,
Office of the President, University of California
DISCLOSURE ITEMS
REAL PROPERTY ENVIRONMENTAL CERTIFICATE
1. Asbestos insulation, etc.
2. Lead paint
3. Chemical or hazardous material storage or handling areas
4. Spills or leaks of any chemicals or hazardous materials
5. Liquid or solid waste disposal areas
6. Leaking underground storage tanks
7. Urea formaldehyde foam insulation
8. Polychlorinated biphenyls (PCBs - electrical transformers or
other equipment)
Source: Long Range Development and Environmental Planning,
Office of the President, University of California
"RED FLAG" ITEMS
ENVIRONMENTAL SITE ASSESSMENT
1. Dead, dying, or unhealthy vegetation (possible soil/water
contamination)
2. Soil or pavement stains/discoloration (from spills or
dumping)
3. Any obvious signs of spillage or residues on property or in
buildings
4. Piles of waste or trash or unidentified mounds (what's
buried?)
5. Insulation (thermal - acoustical - electrical may contain
asbestos < 1980)
6. Odors (especially solvents)
7. Unidentified truck tracks on open lots (possible illegal
dumping?)
8. Is property adjacent to dump/landfill, known hazardous waste
sites (lists of identified waste sites are available), or
high risk industries?
9. Wells (any caps or covers? - also may have permit)
10. Wastewater systems (septic tanks, leaching fields, sumps,
dry wells; i.e., any systems not connected to city sewer,
especially if industrial site)
11. Drums or any other chemical storage or handling areas
12. Maintenance areas (shops or auto/truck repair operations)
13. Ponds, lagoons, or unidentified pits and depressions
14. Underground tanks (any caps or fill connections? - should
have permit)
15. Transformers (or other big electrical equipment < 1978 may
have PCBs)
Source: Long Range Development and Environmental Planning,
Office of the President, University of California
Regents'
REAL PROPERTY ENVIRONMENTAL CERTIFICATE
As grantor(s) of that real property in
County, State of , known as
, and
conveyed to The Regents of the University of California by gift
deed, I/we represent and certify that to the best of my/our
knowledge:
1) The property and all operations thereon comply with
applicable environmental laws, regulations, and court or
administrative orders;
2) There are no pending or threatened private or
governmental claims, or judicial or administrative actions
relating to environmental impairment on the property; and
3) There are no areas on the property where hazardous or
toxic substances have either been released, disposed of, or
found, other than those that are disclosed below:
Name Date
Name Date
(For community property, both owners must sign)
REAL PROPERTY AND RELATED GIFTS
Foundation
REAL PROPERTY ENVIRONMENTAL CERTIFICATE
As grantor(s) of that real property in
County, State of , known as
, and
conveyed to the [name of Campus Foundation] by gift deed, I/we
represent and certify that to the best of my/our knowledge:
1) The property and all operations thereon comply with
applicable environmental laws, regulations, and court or
administrative orders;
2) There are no pending or threatened private or
governmental claims, or judicial or administrative actions
relating to environmental impairment on the property; and
3) There are no areas on the property where hazardous or
toxic substances have either been released, disposed of, or
found, other than those that are disclosed below:
Name Date
Name Date
(For community property, both owners must sign)