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Subdividing and Selling City Land

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Reviewed Date: December 31, 2016

Original Author: 
Leydorf, Donna
Date of Material: 
Oct 24, 2000

Land use
Purchasing--Laws and regulations
Purchasing--Property management
Purchasing--Surplus property disposal

Subdividing and Selling City Land

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.

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.

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