MS 2023-01-D-HopsonJr-September-21-2022-Donation-of-Municipal-Property September 21, 2022

Can a Mississippi town deed homes to long-time residents to make up for Community Block Grant houses that were promised but never built?

Short answer: Generally no. A Mississippi municipality cannot deed municipally-owned property to individual citizens because that is an unlawful donation. The narrow exception is § 43-35-503: if the Town of Gunnison is currently an active participant in a Community Development Block Grant program with terms that authorize this conveyance, it may have the additional authority. Without active participation, no authority exists.

Disclaimer: This is an official Mississippi Attorney General opinion. AG opinions are persuasive authority but not binding precedent. This summary is for informational purposes only and is not legal advice. Consult a licensed Mississippi attorney for advice on your specific situation.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official AG opinion. The original opinion (linked at the bottom of this page, or PDF in the sidebar) is the authoritative source for any reliance.

View original AG opinion (PDF)

Plain-English summary

This opinion is about an old promise. In the 1980s and 1990s, the Town of Gunnison participated in the Mississippi Community Block Grant Program. Two citizens were promised homes that would be built for them. The homes were never built. Instead, the residents have lived in other municipally-owned property for 25 plus years. A previous mayor promised to deed those homes to the residents to make good on the original promise. The current mayor wants to honor that. The town drafted resolutions to deed the homes. The Mississippi Development Authority approved.

The town's attorney asked the AG to weigh in. The AG's answer is that absent specific statutory authority, the deed transfer would be an unlawful donation, but the town may have the necessary authority under § 43-35-503 if it remains an active participant in a Community Development Block Grant program.

The general rule first. § 21-17-1 sets the procedure for municipalities to dispose of real property. Donations of real property by a municipality must be specifically authorized by statute. The AG's Thomas (2006) opinion is the long-standing statement: without specific statutory authority, a municipality cannot give away its real property to individuals.

The Section 43-35-503 hook. The Housing and Community Development Grants statute lets a municipality "buy, lease or sell real or personal property obtained through the use of or in connection with such grant or grants." In a 1991 opinion responding to a Gunnison request, the AG opined that under § 43-35-503 the town could convey property used in a CBG program to an applicant under a lease-purchase agreement without following the standard § 21-17-1 procedures. That earlier opinion (MS AG Op., McKenzie (June 27, 1991)) is the doctrinal hook for the present question.

The AG's narrow path forward. To use § 43-35-503 authority now, the town has to be an actual current applicant or participant in a grant program with defined duties and responsibilities set forth in the grant. The 2005 Trapp opinion clarifies that an entity not party to a current grant contract does not gain § 43-35-503 authority. The houses in question (different houses from those originally promised) and the 25-plus year gap present additional factual issues the AG cannot resolve.

The bottom line. If the town is currently in a CBG program with terms that cover this kind of conveyance to honor original program promises, § 43-35-503 may permit the deed transfer. If it is not, the deed transfer is an unlawful donation regardless of the equities or the prior administration's promise. Whether the town is a current participant is a question of fact for the town's governing authorities to determine, with documentation from the CBG records.

What this means for you

If you are a Mississippi municipal attorney facing a similar legacy promise

Under this opinion, honoring a prior administration's promise is not a substitute for statutory authority. The fact that residents have occupied municipal property for 25 years, that a previous mayor promised them the homes, and that the equities favor the residents does not, by itself, give the town power to deed the property. The AG's position is that a municipality cannot deed municipally-owned property to individuals unless a statute specifically authorizes it; absent that, the deed would be an unlawful donation (Thomas (2006)).

The one statutory hook the AG identifies is § 43-35-503. It applies only if the town is an actual, current participant in a Community Block Grant program with terms that authorize the conveyance. Trapp (2005) holds that an entity not party to a current grant contract "does not gain the additional authority granted by Section 43-35-503." Whether the town currently participates is a fact question for the governing authorities. If there is no current participation, the AG says the town has no authority to deed the property and must instead follow the ordinary disposition procedures in § 21-17-1.

If you are a mayor or board of aldermen member dealing with a legacy housing promise

The town cannot deed the houses to the residents on equity grounds alone. Under the opinion, the legal authority has to come from a statute, and the only candidate here is § 43-35-503, which depends on current Community Block Grant participation. Pulling the grant records and confirming current CBG status with the Mississippi Development Authority is what determines whether that path is open. If the program is not currently in place, that path is closed and the standard § 21-17-1 procedures govern any disposition.

If you are a long-time resident of municipal property based on a legacy program promise

This opinion is hard on the residents' position. The AG concluded that the town cannot simply deed you the property to honor the old promise unless current statutory authority exists. The opinion does not decide your rights; it answers only whether the town has authority to deed the property, and says that without current Community Block Grant participation it does not. If your situation is unclear, talk to a lawyer about your options.

If you are a Mississippi Development Authority staff member

The AG reads § 43-35-503 narrowly: McKenzie (1991), Trapp (2005), and now this opinion all turn on current grant participation. Under Trapp, the authority attaches only to an actual applicant or participant in the grant "with defined duties and responsibilities set forth in the grant." A municipality that is no longer party to a grant contract does not gain that authority.

Common questions

Q: Can the prior mayor's promise create a binding obligation on the town?
A: The opinion says a municipality cannot deed property to individuals without specific statutory authority, regardless of a prior administration's promise. The AG did not opine on the resolutions or agreements themselves, because § 7-5-25 bars it from interpreting local agreements or resolutions.

Q: What if the original Community Block Grant program is no longer running?
A: Then, under the opinion, the § 43-35-503 authority does not apply, and without it there is no authority for the town to deed the property without following § 21-17-1.

Q: Does the Mississippi Development Authority's approval of the transaction matter?
A: The opinion does not treat MDA's approval as the source of state-law authority. The AG's analysis turns on whether the town is a current § 43-35-503 grant participant, a fact question for the town's governing authorities.

Q: Is the 1991 McKenzie opinion still good law?
A: The AG continues to rely on McKenzie, but reads it together with Trapp (2005) to require actual current participation in a grant program. This opinion applies that same narrow reading.

Q: Who decides whether the town is currently participating in a Community Block Grant program?
A: The opinion says that is a question of fact to be determined by the governing authorities of the town. The AG does not make factual determinations by official opinion (§ 7-5-25).

Background and statutory framework

§ 21-17-1 governs municipal disposition of real property, generally requiring advertisement and competitive sale. Specific exceptions exist for particular purposes.

§ 43-35-503 (Housing and Community Development Grants) authorizes municipalities to apply for and contract under federal Housing and Community Development Act of 1974 grants. The statute permits municipalities to "carry out programs which are the subject of the grant or grants for which it has so contracted under this section, including, but not limited to, the power to buy, lease or sell real or personal property obtained through the use of or in connection with such grant or grants." This is the doctrinal hook for conveyances tied to a CBG program.

§ 7-5-25 limits the AG to questions of state law and bars it from interpreting local policies, resolutions, or agreements (Banks (2018), Welch (2021)). Whether the town is currently participating in a CBG program is a factual determination for the town's governing authorities.

The AG opinion line: McKenzie (1991), Trapp (2005), and Thomas (2006) build the doctrine the present opinion applies. Under § 43-35-503, the authority to convey grant-related property without following § 21-17-1 requires actual current participation in the grant program; legacy participation is not enough. Donations of municipal real property require specific statutory authority; equities and a prior administration's promise are not enough.

Citations

Miss. Code Ann. § 21-17-1 (municipal real property disposition procedures)
Miss. Code Ann. § 43-35-503 (Housing and Community Development Grants)
Miss. Code Ann. § 7-5-25 (limits on AG opinion authority)
MS AG Op., Banks (May 11, 2018) (limits on AG opinions for contract interpretation)
MS AG Op., McKenzie (June 27, 1991) (1991 Gunnison CBG conveyance opinion)
MS AG Op., Thomas (Jan. 27, 2006) (donations of municipal real property require specific statutory authority)
MS AG Op., Trapp (Mar. 25, 2005) (§ 43-35-503 authority requires actual current grant participation)
MS AG Op., Welch (July 23, 2021) (limits on AG opinions for contract interpretation)

Source

Original opinion text

September 21, 2022
Derek Dewayne Hopson, Jr., Esq.
Attorney, Town of Gunnison
Post Office Box 266
Clarksdale, Mississippi 38614
Re:

Donation of Municipal Property

Dear Mr. Hopson:
The Office of the Attorney General has received your request for an official opinion.
Background
According to your request, the Town of Gunnison was part of the Mississippi Community Block
Grant Program in the 1980s and 1990s, and during that time, two citizens were promised that
homes would be constructed for them. The homes, however, were never built, and instead the
residents have lived in other municipally-owned property for the past twenty-five plus years. To
make up for the Community Block Grant homes not being built, the previous mayor of Gunnison
promised to deed to the citizens the homes in which they are currently living. The current mayor
of Gunnison wants to honor that promise, and the town has recently drafted two resolutions to deed
the properties to the two citizens. You state that the Mississippi Development Authority has
approved the transaction.
Question Presented
You ask this office to review and opine on the two resolutions and ask whether the municipality is
authorized to execute the resolutions and accompanying deeds, thereby giving the municipally-owned real property to the two individuals.
Brief Response
While we do not opine on the content of resolutions or other local agreements, it is the opinion of
this office that unless specifically authorized by statute, the Town of Gunnison does not have the
authority to deed municipally-owned property to individual citizens because it would amount to
an unlawful donation. However, if the Town of Gunnison is still an active participant in a
Community Block Grant Program, it is possible that it may be afforded the additional authority
granted by Mississippi Code Annotated Section 43-35-503.
Applicable Law and Discussion
As an initial matter, pursuant to Section 7-5-25, the Office of the Attorney General is authorized
to issue official opinions upon questions of state law only. This office is unable to interpret or
opine on local policies or agreements, and cannot by official opinion interpret the terms or
provisions of an agreement or contract or infer facts that may be relevant to our opinion. MS AG
Op., Banks at 1 (May 11, 2018); MS AG Op., Welch at 1 (July 23, 2021). To the extent your
request asks this office to interpret or opine on proposed resolutions and resultant deeds, we are
unable to respond by official opinion.
Under Section 43-35-503, entitled "Housing and community development grants," a municipality
has the authority to apply to and contract with the United States or any of its departments for grants
under the authority of the Housing and Community Development Act of 1974, "and to comply
with all the terms and conditions of such grant or grants." Municipalities also have the power under
Section 43-35-503 "to carry out programs which are the subject of the grant or grants for which it
has so contracted under this section, including, but not limited to, the power to buy, lease or sell
real or personal property obtained through the use of or in connection with such grant or grants .
. . ." (emphasis added).
In the early 1990s, when the Town of Gunnison (the "Town") was a participant in the Mississippi
Community Block Grant Program, this office responded to an opinion request from the attorney
for the Town regarding real property acquired by the Town from Illinois Central Railroad
Company in 1961. MS AG Op., McKenzie at *1 (June 27, 1991). According to that request, a
house was supposed to be built on the municipally-owned property as part of a Community
Development Block Grant Program which envisioned construction of residential housing units on
the property for qualified applicants. Id. Once built, the home "would be leased-purchased to a
qualified applicant according to the relocation policies adopted by the town in connection with the
grant." Id. The requestor asked whether the Town could convey the real property "to individuals
without advertising for bids provided that the sale is in connection with the Community
Development Block Grant Program." Id. This office opined: "Pursuant to Miss. Code Ann. § 43-35-503 . . . the Town of Gunnison may convey property which will be used in a community
development block grant project to an applicant pursuant to a lease-purchase agreement without
following the procedures set forth in Miss. Code Ann. § 21-17-1." Id. Because the Town was a
participant in the Community Block Grant Program, it did not have to follow the requirements of
Section 21-17-1.
However, according to your recent request, the proposed housing units in question in the 1991
opinion that were to be constructed on the municipally-owned property were never built. The Town
now wants to convey to the individuals different houses, which they have lived in the past twenty-five plus years. You do not state whether the Community Block Grant Program is still in place in
the Town, and if it is, what the terms and conditions of the program require.

This office has stated previously that for a municipality to have the power to carry out a program
contracted for under Section 43-35-503, an entity would have to be "an actual applicant or
participant in the grant" with defined duties and responsibilities set forth in the grant or otherwise
required for the receipt of program funds. MS AG Op., Trapp at 3 (Mar. 25, 2005). A municipality
or other entity that is not a party to a contract under the program "does not gain the additional
authority granted by Section 43-35-503." Trapp at 3. "Donations of real property by a
municipality must be specifically authorized by statute." MS AG Op., Thomas at *1 (Jan. 27,
2006). Therefore, unless the Town has the authority granted under Section 43-35-503 as an actual
participant in a current Community Block Grant program and is in compliance with the terms of
that program and grant, the Town does not have the authority to deed municipally-owned property
to the two individuals who have lived in the municipally-owned property for the past twenty-five
plus years. Without current participation in a Section 43-35-503 program, there is no authority for
the Town to deed the property in question without following the requirements of Section 21-17-1.
Whether the Town is currently participating in a Community Block Grant program is a question
of fact to be determined by the governing authorities of the Town.
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
Assistant Attorney General