15 FAM 500
REAL PROPERTY DISPOSAL ABROAD
15 FAM 510
SCOPE AND GENERAL POLICY
(CT:OBO-39; 12-16-2013)
(Office of Origin: OBO)
15 FAM 511 AUTHORITY AND SCOPE
15 FAM 511.1 Authority
(CT:OBO-39; 12-16-2013)
Authorities include the
Foreign Service Buildings Act of 1926, as amended (22 U.S.C. 300), and Section
585 of the Foreign Operations, Export Financing and Related Programs
Appropriations Act, 1991 (22 U.S.C. 2396a).
15 FAM 511.2 Scope
(CT:OBO-39; 12-16-2013)
This subchapter applies to the disposal of U.S.
Government-owned (GO), capital lease, and
trust-fund properties abroad; the funding of expenses; and the processing of
proceeds. The U.S. Government may dispose of properties by sale, exchange,
competitive bid, lease, or license. For U.S. Agency
for International Development (USAID) properties, disposal may also be by transfer
for cash, credit, or other property, with or without warranty, or for foreign
currencies, credits, or substantial benefits or the discharge of claims
resulting from the compromise or settlement of such claims. Subchapter 15 FAM 530
contains detailed procedures for implementing these provisions. Questions or
comments on these provisions should be directed to the Office of Acquisitions
and Disposals in the Directorate for Planning and Real Estate in the Bureau of Overseas Buildings Operations (OBO/PRE/OAD) for Department of State properties, or, in the case of USAID
properties, the Overseas Management Division, Office of Management Services,
Bureau for Management, USAID/Washington (USAID/W-M/MS/OMD).
15 FAM 512 POLICY
15 FAM 512.1 General
(CT:OBO-39; 12-16-2013)
a. Post must review U.S. Government-owned (GO) and capital lease properties annually to identify
those excess to requirements, not fully utilized, or uneconomical to retain
(see 15 FAM
Exhibit 512.1). Post must report such Department of State properties to OBO/PRE/OAD, or, in the case of USAID
properties, USAID/W-M/MS/OMD along with the latters regional bureau, and
submit recommendations for disposal. Post must obtain approval from OBO/PRE/OAD for Department of State properties, or, in the case of USAID
properties, USAID/W-M/MS/OMD before taking any action relating to disposal of a
property. Once granted approval, post must coordinate for Department of State properties with OBO/PRE/OAD, or, in the case of USAID
properties, USAID/W-M/MS/OMD to retain legal counsel and/or other experts,
select a disposal method, and complete the transaction. The Department of State must make every reasonable effort to
dispose of properties at or above fair-market value.
b. After an action for disposal of a property has been
approved or initiated, if it is determined that retention of that property is
in the Department of States best
interest, OBO/PRE/OAD must obtain written
approval to terminate the disposal action from
the Director of OBO. The Director of OBO or the Managing Director for
Planning and Real Estate for Department of State properties,
or, in the case of USAID properties, USAID/W-M/MS/OMD will terminate disposal
actions through an action memo or cable.
c. Throughout 15 FAM 500, references to OBO are deemed
to apply to Department of State properties
and references to USAID/W-M/MS/OMD are deemed to apply to USAID properties.
15 FAM 512.2 Professional and
Technical Services
(CT:OBO-39; 12-16-2013)
a. All real property disposal actions abroad require
the use of local legal counsel. The services of other professionals such as
real estate brokers may also be necessary. Post must obtain the prior approval
of OBO/PRE/OAD for Department of State properties, or, in the case of USAID
properties, USAID/W-M/MS/OMD, before making commitments or incurring financial
obligations for such services (see 15 FAM 420).
b. General and broker: In
general, a real estate broker is engaged for sales by OBO of Department of State properties, or, in the case of USAID
properties, by USAID/W-M/MS/OMD. Post may
conduct a sale without a broker if that is the most efficient method of
disposal and is likely to yield the highest proceeds. This is done with prior
approval of OBO/PRE/OAD for Department of State properties, or, USAID/W-M/MS/OMD, for
USAID properties. The role of the real estate broker is to market the property
and find potential buyers. OBO/PRE/OAD for
Department of State properties, or, USAID/W-M/MS/OMD for USAID properties,
selects the broker through its own competitive process, or the broker is
selected through a competitive process at post with the approval of OBO/PRE/OAD or USAID/W-M/MS/OMD, as applicable. Post then requests an allotment
of funds from OBO/PRE/OAD for Department of State properties, or, in the case of USAID
properties, USAID/W-M/MS/OMD, for the broker commission and fees. This applies
to sales, competitive bids, property exchanges, and lease/license agreements.
The selection and fees of brokers are governed by 15 FAM 420.
15 FAM 512.3 Policy to Value Real
Property for Disposal
(CT:OBO-39; 12-16-2013)
Real estate (nonresidential and
residential): In order to protect the financial interests of the
Department of State when disposing of real
property, the Department will obtain two independent professional appraisals.
The appraisers will be selected and the appraisal reports reviewed by the
Office of Master Planning and Evaluations in the
Directorate for Planning and Real Estate in the Bureau of Overseas Buildings Operations
(OBO/PRE/MPE). When it is not possible or cost effective to hire credible
appraisers, OBO/PRE/MPE may elect to prepare an in-house appraisal report:
(1) OBO/PRE will order
appraisals from OBO/PRE/MPE with enough time for the Department of State to make credible business decisions regarding
pricing and marketing strategy prior to placing the property on the market. A
minimum of 90 days is recommended. Appraisals will be funded by OBO for
Department of State properties or in the
case of USAID properties, USAID/W-M/MS/OMD;
(2) Questions regarding this requirement or scope of work to procure appraisals may be
directed to OBO/PRE/MPE; and
(3) The appraisal requirement may be waived by
OBO/PRE/MPE if the cost of the appraisal appears high relative to the amount at
stake; if only a single credible appraisal can be obtained by OBO/PRE/MPE; if local conditions and
experience indicate no credible appraisals can be obtained; or if it is in the
best interests of the government based on the facts and circumstances. For
USAID, this same process applies except with the oversight and approval of USAID/W-M/MS/OMD.
15 FAM 512.4 Funding of Expenses
(CT:OBO-39; 12-16-2013)
a. Department of State: Post
must obtain approval and funding from OBO/PRE/OAD
for expenses of disposals such as agent or broker fees, costs of
surveys, advertising, legal services, appraisals, and settlement.
b. USAID: Missions must
request approval from USAID/W-M/MS/OMD of expenses arising from a sale,
exchange, or lease.
15 FAM 512.5 Documentation and
Records
(CT:OBO-39; 12-16-2013)
The Department of State must maintain documentation and
records relating to property disposal. Post is responsible for maintaining
documents and records on real properties as provided in 15 FAM 450.
Post is also responsible for providing documents, records, and information
relating to their disposal to OBO/PRE/OAD for
Department of State properties and other
bureaus (e.g., CGFS and L) that support
financial or other processes related to disposal, or USAID/W-M/MS/OMD for USAID
properties.
15 fam 513 through 519 unassigned
15 FAM Exhibit 512.1
Guidelines for Reviewing Real Properties for Disposal
(CT:OBO-39; 12-16-2013)
When reviewing real properties for retention or disposal, post and OBO/PRE/OAD will consider the following
guidelines:
(1) Is the property wholly or partly excess to needs?
If so, could it be sold, licensed, leased, or exchanged for more useful
property?
(2) Is the property uneconomical to retain? If so,
could it be sold or exchanged for a more suitable property with lower maintenance
and operating costs, at a price roughly equivalent to the value of the present
property? Could it be leased or licensed and other property acquired to meet
post needs?
(3) Is the property being put to optimum use?
(4) Is the property used only irregularly for program
purposes? Would a portion of the property satisfy program needs?
(5) Have local conditions changed significantly since
the property was acquired, thereby affecting the surrounding neighborhood,
transportation facilities, convenience to users, zoning, and other
environmental factors, including local development plans?
(6) Can continued U.S. Government ownership of the
property be justified in light of its current use?
(7) Are operating and maintenance costs excessive?
(8) Is the property functionally obsolete or has it
physically deteriorated beyond economical repair?
(9) Will program changes alter post property
requirements?
(10) If a portion of the property is disposed of, will
the remaining portion still comply with zoning requirements?
(11) Considering property prices or rentals, moving
costs, preparation of the new space, occupancy costs, and increased operational
efficiency: Can the U.S. Government realize net savings by relocating?
(12) Is a portion of any property being retained
primarily because the present boundaries are marked by the existence of fences,
hedges, roads, or utilities?
(13) Is land being retained only because it is
landlocked?
(14) Is there land that can be made available for use
by others, within or outside the U.S. Government, on a temporary lease or
license basis?
(15) Are there security, political, or public relations
considerations that outweigh the foregoing guidelines?
(16) What effect does the availability of alternative
facilities, if required, have on the foregoing guidelines?
(17) Are there any restrictions on the use or
expatriation of proceeds of sale under local law?
(18) Does the building meet fire and life safety codes
and standards?