Opinion 96 - 11

This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.

REAL PROPERTY -- Sales (authority of town board to submit proposition to voter approval on own motion)

REFERENDUM -- Permissive (need for when selling town real property); (on town board motion in lieu of petition)

TOWN BOARD -- Powers and Duties (submission of resolution for sale of real property to referendum on board motion)

TOWN LAW, §§64(2), 94: A town board, on its own motion without the necessity of a petition, may submit a resolution for the sale of real property to voter approval.

This is in reply to your inquiry concerning certain land originally acquired by a county for non-payment of taxes. The county conveyed the property to the town for $100.00 in 1981. You state that the town board does not presently have any intended use for the property and is considering sale of the property. You ask whether the town board, on its own motion, may subject this proposed land sale to referendum.

Pursuant to Town Law, §64(2), a town board may acquire by lease, purchase or eminent domain procedures land required for any town purpose (see also Town Law, §§81, 220; cf. 1981 Opns St Comp No. 81-203, p 216). As a general rule, when real property is no longer needed for town purposes, a town board, upon adoption of a resolution subject to permissive referendum, may convey the real property (Town Law, §64[2]; see, e.g., 1981 Opns St Comp No. 81-5, p 4; cf. County Law, §215(8) and Real Property Tax Law, §1166, exempting real property acquired by a county by tax title from certain procedural requirements generally applicable to the disposition of county real property).1

It is well-established that a town board may not submit a matter to referendum unless authorized or required to so by State statute (1991 Opns St Comp No. 91-58, p 160 and citations therein). Permissive referendum requirements for a town are set forth in article 7 of the Town Law (§90 et seq.). Section 94 provides that a town board, on its own motion, may cause to be submitted for voter approval any board resolution against which a petition for permissive referendum could be filed pursuant to Town Law. Since section 64(2) provides that a board resolution for the sale of real property is subject to the permissive referendum petition process, the town board, on its own motion without the necessity of a petition, may submit such a resolution to voter approval (see Ecker v Town of West Seneca, 87 Misc 2d 322, 384 NYS2d 613).

Finally, we note that, although section 64(2) contains no competitive bidding requirement (see, e.g., Opn No. 81-5, supra), the town board, when selling unneeded real property, has a fiduciary duty to secure the best price obtainable in its judgment or the most beneficial terms in the public interest (see, e.g., Matter of New City v Flagg, 111 AD2d 814, 490 NYS2d 560 affd 66 NY2d 980, 499 NYS2d 395; Orelli v Ambro, 41 NY2d 952, 394 NYS2d 636; Ross v Wilson, 308 NY 605; Davis v Board of Education, 125 AD2d 534, 509 NYS2d 612 leave denied 69 NY2d 613, 517 NYS2d 1028; Creole v Guiliani, _____ Misc 2d _____, 636 NYS2d 547; 1994 Opns St Comp No. 94-12, p 19; 1993 Opns St Comp No. 93-21, p 36; 1990 Opns St Comp No. 90-37, p 84). The method of sale chosen is within the board's discretion, but should be the one which the board believes will yield the best price or maximum financial benefits (id.). To fulfill this fiduciary duty, the board should take appropriate measures, which may include obtaining one or more appraisals and utilizing a real estate broker to identify potential buyers (see, e.g., Opn No. 90-37, supra; 29 Opns St Comp, 1973, p 165; 26 Opns St Comp, 1970, p 242; 16 Opns St Comp, 1960, p 419; 14 Opns St Comp, 1958, p 213).

June 7, 1996
Christine S. Snide, Supervisor
Town of Long Lake

1 We note that town park lands are impressed with a public trust and may not be alienated without specific State legislative authority (see, e.g., 1988 Opns St Comp No. 88-1, p 1). Therefore, for purposes of this opinion, we have assumed that the property in question is not park land impressed with a public trust.