Meetinghouse Facilities Department Real Estate Acquisition Process Instructions - Meetinghouse

Transcription

1 Instructions: This document 1) for selected steps in the process, contains explanatory guidelines for the Real Estate Acquisition Process Instructions Meetinghouse and 2) may be adapted to the acquisition of non-meetinghouse (e.g. Missionary, Welfare, Seminaries and Institutes) properties Review the Work Order for completeness, funding and approvals. Work Orders issued through FMAT confirm a funding source. Use the Closing Validation and the Document Transmittal to the Permanent File forms as a checklist for documents to be included in the file Assign REPM and, as appropriate, commence the Process Application Review (PAR). The REM may choose to perform a PAR concurrent with the process of completing a current project or alternately, may choose to complete an annual PAR [4.5. Complete the Process Application Review (PAR)] for several closed projects Notify the FM and PM. The REPM 1) sends a copy of the work order issued by Planning to the FM and 2) completes Sub-section 1.1 on the Property Validation Report (PVR) and sends it with the Planning work order to the APM requesting assignment of the PM. 1.3 Review project roles/responsibilities and Property Search Guidelines during the Project Initiation Meeting (PIM) with the Stake President. The FM is the primary contact for Stake President. The REPM may choose to use Property Search Guidelines when working with the FM, PM, Principal Consultant PC, ecclesiastical leaders and/or other professional consultants for the first time. The guidelines may be used during the Project Initiation Meeting (PIM) with the Stake President, FM, PM, real estate outsource professionals (OP) and PC, as appropriate, when discussing potential issues to be considered during the real estate acquisition process and to help establish expectations by reviewing roles, responsibilities, process, schedule and the preferred search area. When facilities are to be constructed, the goal is to deliver to project management a property that is Construction Design Ready, meaning that the following conditions have been met 1) governmental approval of the Church s intended use has been granted 2) the PM has agreed to the on and off-site improvements and 3) the Church has taken ownership conveyed with acceptable property title insurance, or its equivalent. REPMs and PMs utilize pre-qualified professional consultants to jointly ensure satisfactory completion of the technical aspects of the work order. An overview of the REPM and PM roles and responsibilities is provided below. The REPM is accountable for ensuring that all needed reports are obtained and manages project team members to ensure the completion of the technical aspects of the work order. The REPM prequalifies real estate professionals to search for properties. REPMs may, with REM approval, provide written instructions that require the OP to act as their representative during site inspections. In all cases the REPM shall have visited the Potential Properties prior to going under contract with the Preferred Property. The REPM obtains a reconciled fair market valuation (appraisal), property (title) report, and natural resource (water, forestry, minerals, oil, gas) reports. The PM is responsible for obtaining the boundary and topographical survey, geotechnical (soils) investigation report from a consultant that is familiar with local soil conditions, architectural/engineering feasibility reports, an environmental site assessment (ESA) and the governmental approvals for the Church s intended use on the Preferred Property. The PM prequalifies and selects the PC (e.g. contract architect or engineer), initially to obtain the consultants preliminary observations for the Potential Properties, and later to obtain the final feasibility studies for the Preferred Property. PMs may, with APM approval, provide written instructions that require the Professional Consultant (PC) to act as their representative during initial site inspections. In all cases the PM shall have visited the Potential Properties prior to going under contract with the preferred Property. The PC sends copies of all reports to the PM and REPM and is also responsible for ensuring that governmental approvals for the Church s intended use are obtainable. With the receipt of the various consultants reports, the PM will, prior to property closing, have sufficient information to signature validate the on/off-site cost estimates for the Preferred Property. US & Canada: For real estate services, the REPM may utilize the forms authorized in the Real Estate Outsource Enabling Agreements to engage authorized agents of approved OP or other approved real estate consultant contracts, as needed Identify other professional consultants, as needed. Dec 2011 Page 1 of 7

2 Set up and approve vendors then prepare and approve Purchase Orders for all consultant work being performed in accordance with area guidelines. US & Canada: For real estate services, the REPM may utilize the forms authorized in the Real Estate Outsource Enabling Agreements to engage authorized agents of approved OP or other approved real estate consultant contracts, as needed. For construction related services, the PM utilizes the consultant services agreements located in the Project Management Office Manual (PMOM) Obtain other professional consultant s agreements. 1) If not previously completed the PM contracts with the construction related Feasibility Study consultants, as needed. 2) The REPM, prior to execution of the purchase agreement, contracts with the appraiser to obtain a certified fair market property valuation (appraisal) for the Preferred Property Identify and inspect the potential properties; obtain and record the consultants preliminary observations and cost estimates; identify the Preferred Property. Identify three potential properties, unless otherwise explained in the REPM s comment area in Sub-section 2.1 on the PVR. The PM, PC, REPM, FM and stake president, as a team when possible, visit at least the final three potential sites and continuously counsel together on all issues related to selecting the Preferred Property. The PC develops preliminary site plans for the potential properties; obtains preliminary observations from the geotechnical consultant and governing authorities. The Property Feasibility Study Cost Worksheet (FCW), as adapted to area needs, may be used as a guide when obtaining the consultants preliminary observations related to making the potential properties Construction Design Ready. The REPM completes Sub-section 2.1 of the PVR for the potential properties, enters the Date Sent and the Due Date (10 business days or as jointly agreed by the REPM and PM subject to their respective manager s approval) in Sub-section 2.2 and sends to the PM. Prior to the Due Date below the REPM and PM jointly agree on a preliminary Preferred Property. The PM enters the data related to the Preliminary Feasibility Studies in Sub-section 2.2, contacts the Planning Manager who identifies the funding source for the Off-Site Costs, indicates Real Estate or Construction, then signs and returns the PVR by the Due Date If one of the potential properties is to be donated, commence investigations as appropriate. US & Canada: Coordinate with the RESD Transaction Section - Donation Group which will process the donation utilizing the Donation Packet. International: Utilize the Donation Packet, or its equivalent to process the donation. 2.3 Review the findings with Stake President and obtain validation for the Preferred Property. The REPM works with the FM to obtain the stake president s validation of the Preferred Property. Dec 2011 Page 2 of 7

3 3.1.1 Obtain the Appraisal. 1) A current fair market valuation (appraisal) shall be prepared by a certified appraiser, or their equivalent. The REPM may choose to utilize the Property Market Valuation (Appraisal) Considerations form, or its equivalent, to evaluate the appraisal. 2) Area offices should maintain a list of individuals and/or firms qualified to provide certified fair market property valuations (appraisals) or their equivalents. 3) REPMs may establish property value, supported by a Property Inspection/Broker s Opinion of Value (BOV) or its equivalent, for properties valued at less than $50,000. International: 1) Obtain a certified fair market property valuation (appraisal) or its equivalent 2) In those areas where industry best practice standards for the certification of individuals (e.g. appraisers) as qualified to provide fair market property valuations do not exist the area should submit a proposed method for establishing fair market property value to the Real Estate Services Division of the Meetinghouse Facilities Department (MFD) Validate the property value. To validate the property value, obtain and reconcile 1) a second certified fair market property valuation (appraisal) 2) obtain an evaluation of the appraisal by a certified review appraiser to ensure that appraisals have been prepared in accordance with industry standards or 3) a Property Inspection and Broker s Opinion of Value (BOV) prepared by a pre-qualified real estate broker organization with demonstrated expertise in determining and documenting value. For properties valued at less than $50,000 as determined by the REPM, value must be validated by a Property Inspection/Broker s Opinion of Value (BOV) or its equivalent. The BOV form is designed to provide a consistent format for brokers to quickly offer an opinion of value of the subject property based on comparable currently listed and recently sold property. The BOV normally costs about 10-20% of an appraisal. Area offices should maintain a list of individuals and/or firms qualified to act as certified review appraisers and to provide a Broker s Opinion of Value or their equivalents. Use the Reconciliation of Property Valuations (RPV) form 1) where the variation between the appraisals or the BOV is greater than 10%, 2) to document the rationale for determining the current market value of property and 3) signature validate a defensible decision. Indicate which valuation documents were used in the reconciliation of property value and attach copies. Submit the RPV and its attachments as part of the Closing Package Establish the offering price. Reconcile the appraisal(s) and/or the BOV, as appropriate, and establish the offering price. 3.2 Negotiate and prepare the contract. Negotiate price at or below fair market value or subject to a certified fair market property valuation (appraisal) to be obtained during the contract s feasibility study period Compare the appraised value and the purchase price. Properties should be purchased at or below appraisal 2) where the purchase price exceeds the appraisal by more than 20% the Area Controller and DTA must provide signature approval on the Transaction Document Approval Checklist (TDAC) and submit it as part of Closing Package. U.S. & Canada: The DTA or RESD Director may provide signature approval, as appropriate. Dec 2011 Page 3 of 7

4 3.2.2 Identify all required terms and conditions; prepare all contract documents, as appropriate. 1) Prior to signature by an authorized agent, the REPM may provide only unsigned/un-initialed copies of the transaction documents to the seller 2) Record refundable deposits/reimbursable costs in an approved database. 3) If price, terms and conditions are not accepted, the REPM should notify the REM and Area Planning Manager, then and as directed, commence processing the next prioritized future site or search for a new property. U.S. & Canada: 1) Utilize the Real Estate Contracts Program to complete and print contract. 2) As legal issues arise, the REPM should consult with Closing Services. All non Church-approved transaction documents and any material changes to the approved Purchase Contract must be reviewed and approved (initialed) by Closing Services or legal. Notify Finance regarding changes to financial data, as appropriate. 3) Transaction documents may include one or all of the following: a) Letter of Interest. (The Church approved non-binding Letter of Interest may be signed by the REPM prior to signing of the Purchase Contract by an authorized agent) b) Purchase Contract c) Addendum to Purchase Contract d) Purchaser s Satisfaction Notices. 4) A minimum of two weeks prior to the end of the Feasibility Period submit the following to Closing Services for preliminary review: A draft Closing Validation with the appropriate documents [e.g. ALTA/ACSM survey, Site Plan, and Property Title Report (including all exception documents) and Conditions, Covenants and Restrictions (CC&Rs), if any]. Closing Services will return the draft Closing Validation and documents with comments and instructions. International: 1) Obtain directions from ALC for specific transactions and required documents. 2) Before any documents are signed that bind the Church to the acquisition of a property and before any payments are made to seller, local counsel should issue a satisfactory Property (title) Report 3) Prior to finalizing the terms of payment, consult with the local Area Treasurer/Controller to determine the internal mechanism for funding the purchase (e.g. cash deposits vs. letter of credit) 4) As determined by the Area Controller, prepare a preliminary Request for Appropriation (BAC-21) and obtain approval from the department providing funding Finalize and validate the transaction documents. The Transaction Document Approval Checklist (TDAC) is used to transmit all pertinent supporting documents and the contract documents to the authorized agent for signature Review the transaction documents; validate funding. 1) The TDAC is used to transmit all pertinent supporting documents and the contract documents to the authorized agent for signature. 2) The REPM, and REM, acknowledge review and approval of the transaction documents by signing the TDAC, the PLM validates funding and the Financial Representative confirms budget. 3) After satisfactory review of the TDAC and the related documents, the Authorized Agent initials the TDAC and signs the contract documents Process and record refundable deposits/reimbursable costs related to all agreements. Obtain instructions from the Area Controller. After the RES records, where applicable, refundable deposits/reimbursable costs in an approved database, Area Finance is responsible for accurate account coding and tracking of the deposits. If the transaction fails the REPM sends a termination letter to the other party (with a copy to Area Finance) requesting that the deposit be refunded to Area Finance. Where reimbursable costs are due, the REPM notifies the other party (with a copy to Area Finance) requesting reimbursement. Upon receipt of any funds Area Finance reconciles the appropriate account and notifies the REPM Enter all contract Performance Dates. US & Canada: The REPM enters the Effective Date in the Real Estate Contracts program. This will automatically calculate the contract Performance Dates. The Performance Dates Notice can then printed out, signed by the REPM and forwarded to the Seller for their review, signature and return. Dec 2011 Page 4 of 7

5 3.3.7 Enter the Effective Contract Date. US & Canada: 1) The REPM acknowledges receipt of the Real Estate Purchase Contract signed by the seller by signing the Receipt Section located after the signature block. 2) This critical signature/date establishes the Effective Date of the Real Estate Purchase Contract. After the real estate purchase contract is signed, the REPM enters the Feasibility Period Start and End Dates in Section 3 of the PVR. Based on the information provided by the PM in Section 2.3, the REPM enters the PC Reports Due/Team Decision Date (review of feasibility study results and status of obtaining governmental approvals). The PM and PC complete the final feasibility study for the Preferred Property. The PM completes Section 3 and returns the PVR, the Property Feasibility Study Cost Worksheet (FCW) and feasibility study reports to the REPM by the PC Report Due/Team Decision Date. 3.4 Obtain the final feasibility study reports. The REPM obtains the Property Title Report, determines whether the property is a legally subdivided lot or that adequate assurance of subdivision approval has been documented and obtains the following from the PM: Site Plan, Governmental Approvals for the Church s intended use (as adapted to Area requirements), Geotechnical (Soils) Report, Boundary and Topographic Survey, Environmental Site Assessment (ESA) and other reports, as needed Obtain the Property (Title) Report. A Property (Title) Report should list the current property owners and all current title exceptions, liens and subdivision Conditions, Covenants and Restrictions (CC&Rs), if any. On rare occasions it may be recommended that a property be acquired where a title issue is not fully resolved. In such instances the transaction is to be forwarded to the PFAC and BAC for approval with careful details of how title matters are to be resolved. It should be clearly noted on the acquisition documents, including the BAC-21, that the Director for Temporal Affairs and Area President recommend the purchase (include Area President Minute Number and date) and whether the Office of General Counsel or their local assigned representative concur with the recommendation Determine whether the property is a legally subdivided lot or that adequate assurance of subdivision approval has been obtained. If the property is a newly created lot or sub parcel, there may be a legal requirement that a subdivision plat be approved by local governmental authority and recorded. The REPM should determine whether or not a new subdivision plat is required. If required, the REPM should either: 1) cause the subdivision plat to be recorded prior to Property Closing, or 2) obtain adequate assurance that approval will be given so the subdivision plat can be recorded post-closing. Examples of adequate assurance could include a letter from the applicable city or county or an approval by the city or county of a site plan which depicts the property as a separate lot. 3.5 Validate the results and costs identified in the Final Feasibility Studies. The PM prepares and executes the consultant agreements for the construction related feasibility studies. The consultant agreements are owned by Project Management and are accessed by the PM through the Project Management Office Manual (PMOM). Notify Finance, as appropriate, regarding changes in financial data Obtain PM validation of satisfactory results and the estimated on/off site improvements costs for the Preferred Property. If not already obtained, execute any additional needed agreements with the seller (e.g. the installation of offsite improvements by a developer). Where applicable, prior to property closing, the PM approves and provides written verification of the satisfactory installation of any on/off site improvements (supporting documents could include a letter from the seller s engineer or the governmental entity). 2) While under contract for the acquisition of the Preferred Property but prior to Property Closing, the PM works with the PC to document any needed cost updates on the FCW and in section 3 of the PVR and provides updated copies to the REPM, as appropriate If the results are not satisfactory notify the seller. US & Canada: Utilize the Real Estate Contracts Program to print Purchaser s Conditional Satisfaction Notice If the deficiencies are not satisfactorily resolved terminate the transaction. Dec 2011 Page 5 of 7

6 If the transaction fails the REPM sends a termination letter to the other party (with a copy to Area Finance) requesting that refundable deposits be remitted to Area Finance. Upon receipt of any funds Area Finance reconciles the appropriate account and notifies the REPM. US & Canada: 1) Terminate the transaction a) Under the terms of the Church approved Real Estate Purchase Contract the transaction will terminate automatically at the end of the Feasibility Period unless otherwise extended by the of the Conditional Satisfaction Notice b) If Church approved transaction documents are not being used, or if the Purchaser s Feasibility Study provisions of the Purchase Contract have been modified, termination of the Purchase Contract may require a notice to be sent to Seller prior to the expiration of the Feasibility Period 2) Contact the departmental Customer s PLM to receive instructions to commence processing the next prioritized Preferred Property or search for a new site. International: Consult with ALC to determine how to terminate the transaction If the results are satisfactory obtain the Authorized Agent s signature and send Purchasers Satisfaction Notice to Seller. US & Canada: Utilize the Real Estate Contract Program to print Purchaser s Satisfaction Notice. 4.1 Process the transaction documentation for closing. If not previously completed, categorize and upload documents, as appropriate Prepare the closing package, obtain signatures on the closing validation and submit for property closing. The REPM and RES utilize the Closing Validation Acquisition/Disposition form to submit the Closing Package. International: Utilize the Closing Validation Acquisition/Disposition form, or its equivalent. Confirm with ALC whether legal and/or other area representation is required at closing Prepare and submit other control and feasibility study documents to the permanent file. Use the Document Transmittal to the Permanent File form as a checklist and transmittal form for submission of relevant documents to the Permanent File. Relevant documents include control and property feasibility documents that are not included with the Closing Validation. 4.2 Enter the Transaction Closed Date. 1) The Transaction Closed Date is the day the deed records. This date is entered when confirmation is received from the Closing Transaction Manager that a) the deed has been recorded b) funds have been properly disbursed and c) all Church imposed requirements have been met. Property Closing is usually completed through a third party Escrow Agent (an independent licensed agent such as an attorney, notary or title company) that subject to satisfaction of all contingencies agreed upon by the Church and the seller, holds documentation and funds prior to conveying and recording the property title). 2) For property assemblages, the Transaction Closed Date corresponds to that of the last parcel acquired. 4.4 Enter the Construction Design Ready Date. When facilities are to be constructed, the goal is to deliver to project management a property that is Construction Design Ready, meaning that the following conditions have been met 1) governmental approval of the Church s intended use has been granted 2) the PM has agreed to the on and off-site improvements and 3) the Church has taken ownership conveyed with acceptable property title insurance, or its equivalent. Fences should be installed in accordance with the surveyed boundary line. Where temporary fencing is needed to secure the property, design and installation should be managed by the PM and paid for out of the real estate budget unless the construction of facilities is to commence immediately after Property Closing, then costs should be paid for out of the construction budget. If it is determined that the fence to be installed is the permanent fence, a construction work order should be issued Enter the work order completion date. International: Following transaction closing, obtain the Post Closing Document Transmission Form, together with title and other documents form ALC and/or local counsel Close the project file. After purging the working file, ensure that all needed documents have been retained (e.g. electronically uploaded to the system of record ) in accordance with Title Documents Retention Processes Confirm project Financial Closing. Dec 2011 Page 6 of 7

7 Work with the Financial Representative to close the project financially. Financial records must be at least annually reviewed to ensure that all real estate projects have been financially closed unless the justification for keeping them open is documented and defensible Complete the Process Application Review (PAR). 1) A Real Estate Process Application Review (PAR) must be completed at least annually by the area REM to a) help ensure process compliance (b) evaluate team performance (c) teach and train real estate personnel d) prepare an action plan (e) to identify opportunities for improvement. 2) If the REM chose to perform a PAR concurrent with the process of completing a current project, the PAR should be finished now. Dec 2011 Page 7 of 7