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Real and Personal State Property
Purchases of Real Property Held in Trust

A governmental entity’s purchase of real property held in trust is void unless the trustee submits a copy of the trust agreement (identifying the true owner of the property) to the governing body of the entity. In other words, the trustee must identify the true owner of the property to the governmental entity in order to not be void.

Documentation Requirements [+]

  1. A state agency intending to use funds appropriated by the General Appropriations Act (GAA) to purchase real property must cite the specific statutory authority for the purchase. A state agency intending to use other funds also must cite the specific or implied statutory authority for the purchase.
  2. Unless a state agency is purchasing real property through condemnation proceedings, the agency must send a copy of the settlement or closing statement to the Comptroller’s office.
  3. Unless a state agency is purchasing real property through condemnation proceedings, the agency must send a copy of the real property purchase contract to the Comptroller’s office.
    • The copy must show all necessary signatures.
    • The amount of the contract must correspond with the amount indicated in the documents sent to the Comptroller’s office.
  4. A state agency purchasing real property through condemnation proceedings must send a copy of the commissioners’ award or other appropriate court order to the Comptroller’s office. The copy must show all necessary signatures and must correspond with the amount of the voucher.
  5. Unless a state agency is purchasing real property through condemnation proceedings, the agency must send a copy of either the commitment for title insurance or the attorney general’s title opinion to the Comptroller’s office. If a copy of the commitment for title insurance is attached, the copy must:
    • Show all necessary signatures.
      –and–
    • Reflect the actual amount of title insurance purchased — that amount may not exceed the purchase price of the real property.
  6. Unless a state agency is purchasing real property through condemnation proceedings, the agency must disclose the date of the closing.

  7. Comptroller objects of expenditure must be used:

    • 7342 (Real Property – Buildings-Capitalized)
    • 7345 (Real Property – Land-Capitalized)
    • 7350 (Real Property – Buildings- Capital Lease)

    See USAS Comptroller Objects That Require Pre-Payment Audit and/or Descriptive/Legal Text for Purchase Documents (FPP I.008) for additional information about all required pre-approval codes.

  8. Please remit any above required materials to:

    State Comptroller of Public Accounts
    Fiscal Management Division/Expenditure Audit Section
    Attn: Pre-Approval Codes Required

    If you have questions, call (512) 475-0995 or (512) 463-4894.

Sources [+]

Texas Government Code, Sections 2252.091, 2252.092(a) and 2252.093.