Article 1. Extraterritorial Property of California Government Code >> Division 1. >> Title 5. >> Part 1. >> Chapter 2. >> Article 1.

The Legislature declares that there are communities in the State in which a considerable portion of the agricultural lands and improved commercial and business sites are real property as defined in this article owned by local agencies situate in distant parts of the State. These circumstances give rise to relationships between the inhabitants and the local agencies of the communities and the owners of the property which require the exercise of the police power of the State, for the reconciliation of the respective rights, duties, powers, and privileges of the inhabitants and the agencies involved. These conditions are accentuated by periods of inflation in respect to real property sales prices and rental rates, particularly in those areas in which a distant local agency owns and controls the greater part of the lands that are not owned by the State or the United States.

(a) This article applies to local agencies governed under general laws or charter.
  (b) "Real property" as used in this article is coextensive with lands, tenements, and hereditaments and includes land, any interest or estate in land, and any servitude upon land.
  (c) This article applies only to the real property belonging to a local agency which is situate within another local agency, and only if the owner agency owns in excess of 50 percent of all of the land situate in the other local agency, excluding from the computation all land owned by the United States or by the State.

This article is not applicable to the sale or lease of real property by a local agency to the State or a county, city, district, or political subdivision.

A local agency shall not receive any charge in excess of a reasonable charge for the sale, leasing, licensing, or other use or disposition of its real property. A local agency which receives in excess of a reasonable charge shall repay the amount of the excess, with interest from the date of collection, to the person from whom the excess was received. This section does not apply to the sale of property when all of the following conditions exist:
  (a) The property is not occupied by a lawful tenant of the local agency.
  (b) Improvements have not been lawfully constructed or installed and maintained.
  (c) The property is sold to the highest bidder upon a call for bids.

The economic utility of the property to the user for the purpose to which it is suited is the prime factor in determining the reasonableness of the charge. For example, in a lease for grazing livestock, the prime factor is the value of the forage to the livestock producer, considering the number of livestock the property reasonably will support when used so as to conserve it as a grazing resource and the monetary return to the livestock producer by such use of the property.

In selling or leasing its real property, a local agency shall first give any person who has occupied or used that property or a portion of it as a lawful tenant of the local agency for not less than 24 months during the 36 months next preceding the sale or lease, an opportunity to buy or lease the property at a reasonable price or rental, within a reasonable time after written notice to him; provided that occupancy or use of such property by an employee of such public agency shall create no rights hereunder.

Upon a finding that the public interest will be furthered and with the approval of the legislative body, the board or officer having charge of real property belonging to the local agency may sell or lease the property without advertising or calling for bids.

It is against public policy to permit a person to waive the benefit of any provision of this article. A person shall not waive a right of action accruing to him pursuant to this article or any right he has as to the place of commencement or trial of the action. A person may waive a right accruing under Section 50305 with respect to unimproved real property or with respect to any parcel of real property if the parcel is sold or leased by the local agency to the State or to a county, city, district, or political subdivision.

Notwithstanding any of the provisions of Sections 50300 to 50307, inclusive, a local agency may sell leased property, being used for nonagricultural purposes, at public auction under appropriate laws, rules, and charter provisions applying to that local agency, provided that the person or lessee having rights under Section 50305 has submitted to the local public agency, at least 30 days prior to the date of the public auction, a written request that the leased property be sold at such public auction.