STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 5284

March 21, 1978

OPEN MEETINGS ACT:

Purchase of real property

A public body may not hold a closed session for the purpose of discussing the disposition of real property by sale or lease.

Honorable James E. Defebaugh

State House of Representatives

The Capitol

Lansing, Michigan

You have requested this office's opinion with respect to the following question:

1976 PA 267, Sec. 8; MCLA 15.268; MSA 4.1800(18) provides:

The Legislature may be held to have intended the meaning which it has plainly expressed in 1976 PA 267, Sec. 8(d), supra, Mason County Civil Research Council v Mason County, 343 Mich 313, 331; 72 NW2d 292 (1955), and a reading of the statute to include consideration of the disposition of real property by sale or lease as one of the purposes for which a board of education may hold a closed meeting is untenable.

Moreover, a study of legislative history of 1976 PA 267, supra, confirms the intent of the Legislature in this regard. As originally introduced in the Legislature as Senate Bill No. 920, the bill provided that a public body may meet in executive session only for various purposes, including, '[t]o negotiate the purchase or disposition of real property, including fixtures.' (Emphasis supplied.) The House of Representatives considered and approved a House Substitute for Senate Bill No. 920 which, in pertinent part, provided as follows: 'Sec. 8. A public body may meet in closed session only for the following purposes: (d) To consider the purchase or lease of real property, not including fixtures, up to the time an option to purchase or lease that real property is obtained.' 1976 House Journal No 86, p 2188. Representative McNamee offered an amendment to the House Substitute for Senate Bill No. 920, p 5, by striking all of the above language quoted as proposed in section 8(d) and by inserting the following: '(d) To negotiate the purchase, disposition, rental or other matters related to a transaction involving real property or an interest in real property.' The amendment was not adopted. 1976 House Journal No 88, p 2239. Thereafter, a conference report was approved by both houses which contained section 8(d) as quoted above, deleting therefrom only the phrase, 'not including fixtures,'.

There is, it will be noted, a difference between a purchase of real property and a sale of real property which forms a logical basis for a different open-meeting treatment. The principal reason that public bodies are permitted to discuss the purchase of property at a closed session is to avoid giving prospective sellers of real property an unfair advantage in negotiating for the sale of their property. If sellers are permitted to attend sessions during which the acquisition of their property is being discussed, they will be able to determine the best strategy for obtaining the highest possible price. On the other hand, no such policy consideration need be the concern of the public body when it is offering publicly-owned property for sale. In such cases, it is advantageous to the public interest to disclose all information concerning the proposed sale so that other prospective purchasers may have an opportunity to present additional offers.

It is therefore my opinion that the board of education of a school district may not hold a closed meeting for the purpose of disposing of a building through sale or lease. It may, however, hold a closed meeting for the purpose of acquiring or leasing a building up to the time an option is obtained.

Frank J. Kelley