Knowledgebase-Subdividing and Selling City Land

Information Product

Title:Subdividing and Selling City Land
Summary:MTAS was asked whether or not a Town may subdivide a 27-acre parcel
into one-acre lots and then sell the lots at public auction.
Original Author:Leydorf, Donna
Product Create Date:10/24/2000
Last Reviewed on::12/19/2016
Subject:Land use; Purchasing--Laws and regulations; Purchasing--Property management; Purchasing--Surplus property disposal; Zoning--Subdivisions
Type:Legal Opinion
Legal Opinion: Subdividing & Selling City Land Public.docx

Reference Documents:

Text of Document: FROM: Donna Leydorf, Legal Consultant

DATE: October 24, 2000

RE: Sale of Park Land

You have asked whether or not a Town may subdivide a 27 acre parcel into one-acre lots and then sell the lots at public auction. The land was originally acquired by the Town for use as a park. That plan has not come to pass. You said the Town had tried unsuccessfully to sell the parcel as a whole. When we talked, it seemed to me that selling the land would be a good idea. However, I’ve discovered a statute that specifically prohibits a municipality from reselling property. See 6-54-121, Tennessee Code Annotated, which states:

(A) No municipality shall have, or acquire by private act or amendment to a charter, the power to acquire undeveloped real property for the purpose of development or subdivision into residential lots for resale.
(B) This section shall not affect any power which a municipality may have by general law or private act to engage in slum clearance or the redevelopment of blighted areas, or the construction or development of subsidized low or moderate income housing under state or federal law.
(C) As used in the section “ municipality” includes incorporated towns or cities, metropolitan governments, or counties.

The Tennessee Attorney General has discussed this statute in OAG 98-042. I’m enclosing the opinion because it elaborates on some ways a municipality could use undeveloped property for low or moderate income housing, in case that would be helpful to the Town.

Let me know if you have further concerns.

Please remember that these legal opinions were written based on the facts of a given city at a certain time. The laws referenced in any opinion may have changed or may not be applicable to your city or circumstances.

Always consult with your city attorney or an MTAS consultant before taking any action based on information contained in this database.