Can a Mississippi city use a quitclaim deed to release old use restrictions and a right of first refusal on property it sold years ago?

Plain-English summary

In 1997 Water Valley sold 8.443 acres to Springhill Church through a sealed-bid process. The conveyance included use restrictions ("church purposes only") and an option of first refusal back to the city. The church now wants to sell to a third party, but those restrictions cloud the title. The restrictions weren't in the Board's order or minutes either, just in the deed.

The Board attorney asked whether the city could clean up the title with a quitclaim deed without going through a new bid process or charging consideration.

The AG said yes, under Section 89-1-25. That statute lets school districts, municipalities, and counties execute quitclaim deeds and disclaimers of title to clean up earlier conveyances when:

1. The political subdivision determines by order on its minutes that it asserts no further claim of title
2. The political subdivision received fair and reasonable market value at the original conveyance
3. At least five years have passed since the original conveyance

After that quitclaim, the political subdivision's right or claim is "cut off and not thereafter brought into issue." No new bid process. No consideration required.

The city can carve out reservations (here, mineral rights and ingress/egress) in the quitclaim itself. The 1999 Creekmore opinion and 1981 Funderburk opinion confirm this approach.

The AG noted that Section 7-5-25 limits opinions to prospective questions, so the office couldn't opine on the propriety of the 1997 conveyance or the Board's earlier minutes (Magee 2008 cited).

What this means for you

For municipal attorneys handling old title issues

If your city sold property years ago with use restrictions, a reverter, an option of first refusal, or other clouds, and the buyer now wants to clean up title for a sale, Section 89-1-25 is your tool.

The procedure:

1. Confirm at least five years have passed since the original conveyance
2. Confirm the city received fair and reasonable market value originally (a factual finding the Board makes)
3. Draft an order for the Board reciting the three statutory findings and authorizing the quitclaim
4. Adopt the order at a regular Board meeting; spread on the minutes
5. Draft and execute the quitclaim deed, including any preserved reservations (mineral rights, easements, etc.)
6. Record the quitclaim in the chancery clerk's land records

You don't need to advertise, take bids, or charge consideration. The statute provides the authority directly.

For mayors and boards of aldermen

Section 89-1-25 is a clean tool to release outdated restrictions on long-held property. Use it when:

• A buyer of municipal property years ago needs clean title for resale
• The original use restriction no longer serves a public purpose
• The city is willing to walk away from the reverter or option

Don't use it when:

• The original sale was less than five years ago
• The restriction still serves a current public purpose
• The city wants to negotiate value for releasing the restriction

For active negotiations or current-public-purpose restrictions, consider negotiated release for consideration (separate framework).

For real estate attorneys and title examiners

When you spot old municipal-conveyance restrictions clouding a title, Section 89-1-25 is the cleanup pathway. Coordinate with the city attorney to:

1. Get the Board's three findings on the minutes
2. Get the quitclaim executed and recorded
3. Update the title commitment

The quitclaim needs to specifically describe the property and the interests being released. Generic releases may not provide the certainty needed for title insurance.

For property owners with clouded title from city-imposed restrictions

If your title chain shows a city-imposed use restriction or option of first refusal from a sale at least five years ago, you have an avenue: ask the city to execute a quitclaim under Section 89-1-25.

The city has discretion. It can grant or refuse. Build your request around:

1. The original sale's documented fair value
2. Time elapsed (must be 5+ years)
3. The current need (your prospective sale, refinancing, development plans)
4. Any reservations the city wants to preserve (mineral rights, ingress/egress)

Some cities will grant the quitclaim without charge. Others may negotiate consideration even though the statute doesn't require it.

For title insurance underwriters

A Section 89-1-25 quitclaim properly executed (Board order on minutes, recorded quitclaim) should clear the underlying restriction. Verify:

1. The Board order is in the minutes
2. The order recites all three statutory findings
3. The quitclaim is properly executed and recorded

Any reservations in the quitclaim (mineral rights, easements) remain enforceable.

Common questions

Q: What's a quitclaim deed?
A: A deed that conveys whatever interest the grantor has, without warranty. The grantor is not promising they have good title; they're just transferring whatever they have. For title cleanup, this is the right instrument because the city is releasing an interest it claims, not warranting full title.

Q: Why is this faster than the normal sale process?
A: Because Section 89-1-25 provides direct authority. You're not selling property; you're releasing a clouded interest from an earlier sale. Different framework, different statute, different procedure.

Q: Why no consideration required?
A: Section 89-1-25 specifically authorizes the release based on the three findings. Constitutional Section 66's donation prohibition does not apply because the statute is the constitutional grant of authority.

Q: What if the original sale wasn't at fair market value?
A: Then the city can't make the second statutory finding, and Section 89-1-25 doesn't authorize the quitclaim. The city would need a different framework.

Q: What if it's been less than 5 years?
A: Section 89-1-25 doesn't apply. Wait until five years from the original conveyance, or use a different framework (renegotiated sale, etc.).

Q: Can the city preserve some interests in the quitclaim?
A: Yes. The Water Valley quitclaim preserved mineral rights and ingress/egress. The statute permits selective release.

Q: What if the original Board's order didn't include the restrictions?
A: The AG noted this concern (the 1997 order didn't include the restrictions even though the deed did). The current Board can still proceed under Section 89-1-25 because the statute authorizes cleanup "where ... any question of title arises with reference to the procedure of conveyance, description of the property attempted to be conveyed or obtained or other matters connected therewith."

Q: Does this also apply to school districts and counties?
A: Yes. Section 89-1-25 explicitly applies to "board of trustees of any school district, governing authorities of any municipality or board of supervisors of any county."

Q: What about reverter clauses tied to specific events (e.g., property reverts if not used for X)?
A: A reverter is a recognized real property interest that can be released by quitclaim under Section 89-1-25 if the three findings are met. The statute doesn't distinguish between types of clouds.

Q: What recourse if the city refuses to execute the quitclaim?
A: The statute is permissive ("authorized, in its discretion"). The city has discretion. Property owner remedies are limited; the most common path is to negotiate or wait for political change.

Background and statutory framework

Section 89-1-25 was enacted to provide a cleanup mechanism for political subdivisions' historical conveyances. Old restrictions, defective descriptions, procedural defects, or use clouds can encumber property for decades. The statute provides a mechanism to release those when:

1. The political subdivision asserts no further claim
2. Fair value was received originally
3. Five years have passed

The statutory text is broad: "[i]n all cases where ... governing authorities ... has heretofore attempted to convey or to obtain title to real property or any interest therein and thereafter any question of title arises..."

The release "shall be cut off and not thereafter brought into issue." This is a final disclaimer. Subsequent litigation cannot reopen the city's claim.

The 1981 Funderburk opinion was an early application: the AG approved municipal use of Section 89-1-25 to transfer interest. The 1999 Creekmore opinion confirmed any municipal interest can be extinguished by quitclaim. This 2022 opinion applies the framework to a use restriction plus option of first refusal.

The AG's Section 7-5-25 limit (no validation/invalidation of past actions) means the AG can't opine on whether the 1997 Board followed proper procedures. The current Board's authority under Section 89-1-25 does not depend on that historical question; the statute provides direct authority for cleanup.

Citations and references

Statutes:
- Miss. Code Ann. § 7-5-25, AG opinion authority
- Miss. Code Ann. § 89-1-25, quitclaim deeds by political subdivisions

Prior AG opinions cited:
- MS AG Op., Magee (Aug. 29, 2008), AG cannot validate/invalidate past actions
- MS AG Op., Creekmore (Mar. 26, 1999), any municipal interest extinguishable by quitclaim
- MS AG Op., Funderburk (July 30, 1981), municipal interest transfer under Section 89-1-25

Source

• Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
• Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2022/05/D.Martin-May-9-2022-Extinguishing-Municipal-Interest-in-Real-Property-with-Quitclaim-Deed.pdf

Original opinion text

May 9, 2022

Daniel M. Martin, Esq.
Attorney, Water Valley Board of Aldermen
203 Wagner Street
Water Valley, Mississippi 38965

Re: Extinguishing Municipal Interest in Real Property with Quitclaim Deed

Dear Mr. Martin:

The Office of the Attorney General has received your request for an official opinion.

Background

According to your request, the City of Water Valley (the "City") sold 8.443 acres of property to the Board of Trustees of Springhill North M.B. Church and their Successors in Office ("Springhill Church") after advertising in the local paper and accepting sealed bids per a previous order of the Board of Aldermen (the "Board"). The Board accepted Springhill Church's bid and confirmed the sale by order dated September 2, 1997, and the sale was executed on November 12, 1997.

As part of the conveyance, the City placed certain restrictions that state the property shall be used for "church purposes only" and also reserved to the City an option of first refusal to purchase the property back from Springhill Church should it ever decide to sell the same. Springhill Church now wishes to sell the property to a third party, but the restrictions and option of first refusal make it unmarketable. You also express concern that the restrictions were not part of the Board's order authorizing the sale nor do they appear in the official meeting minutes. The City is now desirous of cancelling the restrictions and the option of first refusal while reserving only the City's mineral rights and the right of ingress and egress to remove the same.

Question Presented

May the City execute a quitclaim deed to Springhill Church terminating all interests of the City in and to said parcel in question, except the City's mineral rights and the right of ingress and egress to remove the same, without consideration and without going through the bid process?

Brief Response

Yes, based on Section 89-1-25 of the Mississippi Code, after an order entered on its minutes that the requisite findings have been made, the City may execute a quitclaim deed to Springhill Church relinquishing its interest in the property while reserving its mineral rights and the right of ingress and egress to remove the same. There is no need for consideration or bidding.

Applicable Law and Discussion

As an initial matter, pursuant to Section 7-5-25, this office may only opine on prospective questions of law. An Attorney General's Opinion can neither validate nor invalidate past action. MS AG Op., Magee at *1 (Aug. 29, 2008). Therefore, this office cannot opine on previous actions of the Board regarding the disposal of municipal property or the Board's minutes regarding such.

Section 89-1-25 is entitled "Quitclaim deeds by school district" but also pertains to governing authorities of both municipalities and counties. It states as follows:

In all cases where a board of trustees of any school district, governing authorities of any municipality or board of supervisors of any county in the State of Mississippi has heretofore attempted to convey or to obtain title to real property or any interest therein and thereafter any question of title arises with reference to the procedure of conveyance, description of the property attempted to be conveyed or obtained or other matters connected therewith, and the governing authority of said school district, municipality or county determines by order entered on its minutes that the said political subdivision is asserting no further claim of title, that at the time of said attempted conveyance or disposition of said property, if property was conveyed or disposed of by the political subdivision, the said political subdivision did then receive the fair and reasonable market value of said property, and that a period of at least five (5) years has elapsed from the date of the said original attempted conveyance or disposition or obtaining of title of said property; the said board of trustees of said school district, governing authorities of said municipality or board of supervisors of said county, as the case may be, is thereupon hereby authorized, in its discretion, to execute quitclaim deeds and disclaimers of title on behalf of said political subdivision, after which any right or claim of said political subdivision in and to said realty shall be cut off and not thereafter brought into issue. Any such quitclaim deed or disclaimer of title heretofore executed by or on behalf of said political subdivision in accordance with the foregoing shall likewise be valid if executed in accordance with the provisions hereof.

(Emphasis added.) According to the statute, the City may execute a quitclaim deed to Springhill Church releasing the City's right to an option of first refusal and its right to require that the property be used only for church purposes. See MS AG Op., Creekmore at 1-2 (Mar. 26, 1999) (opining any municipal interest may be extinguished by quitclaim deed); MS AG Op., Funderburk at 2 (July 30, 1981) (indicating that municipality can transfer its interest under § 89-1-25). The Board must enter an order on the minutes that the City is no longer asserting a right to an option of first refusal or to require the property be used only for church purposes, that the City received fair and reasonable market value for the property when it was originally conveyed to Springhill Church in 1997, and that at least five years have elapsed since the original conveyance. It is the opinion of this office that the City may execute a quitclaim deed with the above releases, and once the quitclaim deed is executed, the City's claims shall be released, save for the reservation of mineral rights and the accompanying right of ingress and egress to remove such.

If this office may be of any further assistance to you, please do not hesitate to contact us.

Sincerely,

LYNN FITCH, ATTORNEY GENERAL

By: /s/ Misty Monroe
Misty Monroe
Special Assistant Attorney General