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Sale of Surplus City or Town Property

This pages provides an overview of state laws concerning the sale of surplus property by cities and towns in Washington State, including examples of local government codes and policies. For an overview of the statutes concerning counties, see Sale of Surplus County Property

Overview

Cities and towns frequently need to sell or convey equipment or property which is no longer needed for municipal purposes. There are relatively few statutes concerning procedures for sale of surplus property. 

The basic authority to purchase and dispose of real estate and personal property is set in the following statutes:

Cities and towns should also be familiar with the statutes listed below.

  • RCW 39.33.010 – Cities, towns and counties can sell or transfer property to other governmental entities "on such terms and conditions as may be mutually agreed upon." This statute permits transfer for less than value. See AGO 1997 No. 5 for how to harmonize this statute with RCW 43.09.210 which requires that a local government entity receive "full value" when there is an intergovernmental transfer of property.
  • RCW 39.33.020 – Requires that a public hearing be held if the value of the property being surplussed exceeds $50,000. AGO 1997 No. 5 concluded that the public hearing requirement only applies to intergovernmental transfers.
  • RCW 35.94.040 – Requires that a public hearing be held if property (real estate or personal property) originally purchased for utility purposes is no longer needed for that use and the city desires to lease, sell or convey the property. A hearing is required regardless of the value of the property.
  • RCW 42.30.110(1)(b) – Cities and towns can discuss the selection of property for purchase or lease (or the price) when public knowledge regarding such consideration would cause a likelihood of increased price.
  • RCW 42.30.110(1)(c) – Cities and towns can discuss in executive session the minimum price at which it will sell a particular parcel of real estate if public knowledge regarding such consideration would cause a likelihood of decreased price. This statute enables the council to provide negotiation direction and flexibility to the person delegated to sell real estate.
  • RCW 42.56.260 – Exempts from public disclosure real estate appraisals obtained by the city prior to completion of a sale of the property. The statute was amended in 2015 to clarify the disclosure exemption by adding the following: “The exemptions in this section do not apply when disclosure is mandated by another statute or after the project or prospective project is abandoned or all properties that are part of the project have been purchased, sold, or leased. No appraisal may be withheld for more than three years.”
  • RCW 43.09.210 – Requires that a local government entity receive "full value" when there is an intergovernmental transfer of property. See AGO 1997 No. 5 which concludes that the concept of "full value" is flexible, depending on the facts.
  • Ch. 35.94 RCW – If a city or town wishes to sell or lease a public utility, or portions of the utility, it can do so by following the procedures in this chapter. Bids are required, and the council must approve the sale by a two-thirds vote, followed by submitting the issue to the voters.

Practice Tips

  • Prior to sale, always determine the fair market value of the item to be sold. If you sell it for less, you may be violating the "gift clause," in Article VIII, Sec. 7 of the State Constitution, which states that "No county, city, town or other municipal corporation shall hereafter give any money, or property, or loan its money, or credit to or in aid of any individual, association, company or corporation, except for the necessary support of the poor and infirm, or become directly or indirectly the owner of any stock in or bonds of any association, company or corporation." But see RCW 39.33.010 mentioned in the list of statutes above.
  • Hold a public hearing, if required by RCW 39.33.020 or RCW 35.94.040. AGO 1997 No. 5 concludes that the public hearing requirement in RCW 39.33.020 only applies to intergovernmental transfers of property.
  • Pass a resolution declaring the property to be surplus, and specifying how the property is to be sold, or delegating that task to a particular administrative official.
  • Proceed with sale as required by the town or city council, or in any commercially reasonable way. Sale can be by auction, private sale, sealed bid, through a broker or agent, etc.
  • City officials and certain administrative officers may be restricted from purchasing surplus property due to conflict of interest concerns. The general rule is that those who are involved in the decision to surplus property (the council) and those in charge of administering the sale (mayor, city manager, or other city officer responsible for the sale) should not purchase the property. General city employees can purchase surplus city property.
  • Consider adopting policies concerning sale of city property. For examples, see the Policies section below.

Examples of Ordinances and Codes

Examples of Policies


Last Modified: September 20, 2017