Is Surplus Property Always Sold at Fair Market Value?
Generally, the state always attempts to receive fair market value for property it is selling. However, the Government Code provides that surplus property can be sold to local government for less than fair market value for the following purposes: Parks and recreational space. Open space. Low- and moderate-income housing. Schools. State law requires that the contract for any surplus land sold for less than fair market value must provide for the reversion of the land back to the state if the intended purpose for which the property was sold is not achieved. In addition to the purposes cited above, the Legislature can direct DGS to sell specified properties for less than fair market value in the annual surplus property legislation. What Happens to the Proceeds of a Sale? Unless the surplus property legislation specifies otherwise, the net proceeds received from disposition of surplus property are paid to the General Fund. “Net proceeds” are gross proceeds less all costs directly related to
