The Real-Estate-Negotiations Exception To The Brown Act Permits Closed-Session Discussion Of The Amount Of Consideration The Public Agency Is Willing To Pay, The Form, Manner, And Timing Of Payment, And Items Essential To Arriving At Authorized Price And Payment Terms

The Attorney General has issued an opinion as to what items may be discussed under the real-estate-negotiations exception to the open meeting requirements of the Ralph M. Brown Act. The Brown Act permits a governing body to meet in closed session with its real estate negotiator "to grant authority to its negotiator regarding the price and terms of

payment" for a proposed purchase, sale, exchange, or lease of identified real property.

The real-estate-negotiations exception does not permit closed-session discussion of any and all aspects of a proposed transaction that could effect price or payment terms. The wisdom of the proposed transaction cannot be discussed in closed session. The Attorney General opined that the real-estate-negotiations exception to the open meeting requirements of the Brown Act permits closed-session discussion of the following:

1. the amount of consideration the local agency is willing to pay or accept in exchange for the real property rights to be acquired or transferred in the particular transaction;

2. the form, manner, and timing of how that consideration will be paid; and

3. items essential to arriving at the authorized price and payment terms, such that their public disclosure would be tantamount to revealing the information that the exception permits to be kept confidential.

The agenda item must specify the property, identification of agency negotiator, names of negotiating parties, and whether the negotiation concerns, price, terms of payment, or both. The Attorney General noted that the word "terms" is modified by "of payment" which rules out the possibility that all terms of the transaction as a whole may be discussed under the exception.

The AG concluded that "a closed-session discussion regarding price or terms of payment must allow a public agency to consider the range of possibilities for payment that the agency might be willing to accept, including how low or how high to start the negotiations with the other party, the sequencing and strategy of offers or counteroffers, as well as various payment alternatives. Information designed to assist the agency in determining the value of the property in question, such as the sales or rental figures for comparable properties, should also be permitted, because that information is often essential to the process of arriving at a negotiating price."

Attorney General Opinion No. 10-206 (Dec. 27, 2011) [2011 WL 6917511].

This article was written by Heather DeBlanc, an attorney with the full service education law firm of Liebert Cassidy Whitmore. Ms. DeBlanc is an Associate in the Los Angeles office and can be reached at (310) 981-2000 or at hdeblanc@lcwlegal.com. For more information regarding the information above or our firm please visit our website at www.lcwlegal.com, or contact one of our offices below.

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