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Is That Donated Property Worth the Risk?

Cities and towns sometimes find themselves the recipients of donated property parcels when the owners decide they would like to give it away for the public good. Councils are often eager to accept these gifts and find ways to use them. First, however, they need to consider the risks involved, and whether the benefits outweigh those risks. 

City-owned properties can be a source of premises liability claims. For a municipality to protect itself against these claims, it must be able to demonstrate that it exercised reasonable care to protect individuals from harm resulting from known conditions. This also applies to conditions of which the municipality should have had knowledge. 

A city can help protect itself by establishing procedures for accepting a property. The procedures should include determining whether the property has potential problems. Donated properties can often have environmental hazards like asbestos and underground storage tanks. Many donated buildings are vacant or partially occupied, and have damage from fire, neglect, vandalism or a lack of utilities. The procedures should call for the city to determine whether there is any deferred maintenance on the property, such as windows or roofs in need of replacement. Councilmembers also need to ask themselves if the property is truly useful for the city. 

As the city evaluates the property, it can gain insight and identify concerns by involving several staff members:

  • the city attorney,
  • the staff member responsible for risk management, and
  • the head of the department that would take over the property. 
The city should also consult with its property and liability insurer to determine what coverage limitations may apply. 

Although the city may want to modify a donated property, the renovation or demolition of most properties is subject to state and federal asbestos regulations, as well as Occupational Safety and Health Administration standard 1926.1101. The city should not assume that a donated property is free of asbestos, no matter its age or condition. Contact the SC Department of Health and Environmental Control for a list of certified property inspectors.

Contamination from underground storage tanks may also increase the city’s liability exposure. Conduct an assessment to determine if underground storage tanks are present, and if removal or cleanup is required. Cleanup must be done by companies that are certified by DHEC.
Taking these steps as part of a city’s decision-making process to accept or decline a donation can prevent harm to residents and city staff and save the city effort, time and liability costs.