AG 2012 07 16 - Laserfiche WebLink

Home Browse Search

ISO Local Government Property Transactions in 1�orlh Carolina board must sell the .property to the highest "responsible bidder." The pur- chasing statute gives some content to the meaning of lolvest responsible bid- der for purposes of that statute (quality, performance, and the tune specified for performance), but those factors do not seem relevant to sales of govern- ment property to the highest responsible bidder. The highest responsible bid- der should almost always be the bidder who submitted the highest bid; only in extraordinary circumstances should the board pass over the high bidder on the ground she is not responsible. Certainly the board may not reject the high bidder simply because another bidder plans a use of the property more attractive to the board.' The purchasing statute does not specify how long bids remain good, but bid specifications routinely do so, and that practice should be followed as well when property is being sold.. One provision of G.S. 143 -129 does not fit into the property sale context. That statute requires forfeiture of the bid deposit if the successful bidder does not execute a contract or give satisfactory surety within ten days after the contract is awarded. ff the contract is executed or sureties given within the ten days, the conditions of the deposit have been met and the bidder is entitled to a return of the deposit or release of her sureties. These require - ments, however, are not directly transferable to the sale of property, and therefore the authorizing resolution should adjust them as necessary. The basic concern for the selling government is to be protected against buyer default until the sale is.closed. Releasing the deposit upon execution of a contract of sale does not meet that concern." Therefore the resolution and the advertisement should specify that the deposit will be retained until clos- ing, regardless of whether and when a contract of sale is executed. D. Upset RM Since the enactment of G.S. Chapter 160A in 1971 the upset bid proce- dure has become the most common method used by local governments sell- ing their real property; it is much less frequently used for personal property. 92. Cf., Porsh Builders, Inc. v. City of Winston - Salem, 302 N.C. 550, 276 S.E.2d 443 (1981) (city selling urban development property to highest responsible bidder may not select second high bidder because his bid was "more nearly" in compliance with development plan than that of high bidder). 93. When a government is purchasing property, it can protect itself against seller default, after contract execution, by requiring a performance bond. There is no comparable bond to protect the government when it sells property. 94. if the buyer defaults on the contract, the government may bring an action for clamages, but the costs and delays of litigation make that route a pale substitute for forfeiture of a deposit. Attachment number 6 E -1 Page 64