Can a Mississippi city use a quitclaim deed to release old use restrictions and a right of first refusal on property it sold years ago?

Plain-English summary

In 1997 Water Valley sold 8.443 acres to Springhill Church through a sealed-bid process. The conveyance included use restrictions ("church purposes only") and an option of first refusal back to the city. The church now wants to sell to a third party, but those restrictions cloud the title. The restrictions weren't in the Board's order or minutes either, just in the deed.

The Board attorney asked whether the city could clean up the title with a quitclaim deed without going through a new bid process or charging consideration.

The AG said yes, under Section 89-1-25. That statute lets school districts, municipalities, and counties execute quitclaim deeds and disclaimers of title to clean up earlier conveyances when:

1. The political subdivision determines by order on its minutes that it asserts no further claim of title
2. The political subdivision received fair and reasonable market value at the original conveyance
3. At least five years have passed since the original conveyance

After that quitclaim, the political subdivision's right or claim is "cut off and not thereafter brought into issue." No new bid process. No consideration required.

The city can carve out reservations (here, mineral rights and ingress/egress) in the quitclaim itself. The 1999 Creekmore opinion and 1981 Funderburk opinion confirm this approach.

The AG noted that Section 7-5-25 limits opinions to prospective questions, so the office couldn't opine on the propriety of the 1997 conveyance or the Board's earlier minutes (Magee 2008 cited).

What this means for you

For municipal attorneys handling old title issues

Under the opinion, when a city conveyed property years ago and a question of title later arises, Section 89-1-25 lets the governing authority execute a quitclaim deed or disclaimer of title once it enters an order on its minutes making the statute's three findings: that the city asserts no further claim of title, that the city received the fair and reasonable market value of the property at the original conveyance, and that at least five years have elapsed since that conveyance. The opinion holds this can be done without consideration and without going through the bid process, and that the city may reserve interests (here, mineral rights and the right of ingress and egress to remove them) in the quitclaim. After the quitclaim, the statute provides that any right or claim of the city is "cut off and not thereafter brought into issue."

For mayors and boards of aldermen

The opinion frames Section 89-1-25 as discretionary: the governing authority "is thereupon hereby authorized, in its discretion, to execute quitclaim deeds and disclaimers of title." It applies where the city no longer wants to assert an old interest, the original sale brought fair and reasonable market value, and five years have passed. The opinion is grounded in the specific facts here: Water Valley wanted to release a "church purposes only" use restriction and an option of first refusal from its 1997 sale, while keeping its mineral rights and access.

For property owners with title clouded by old city restrictions

The opinion confirms that a city-imposed restriction or option of first refusal from a sale at least five years ago can be released by a Section 89-1-25 quitclaim once the board makes the three findings on its minutes. Because the statute makes the release discretionary, the decision rests with the governing authority; the opinion does not address what a property owner can do if the city declines.

Common questions

Q: Can a city release old use restrictions and a right of first refusal by quitclaim?
A: Yes. The opinion holds that under Section 89-1-25 the City may execute a quitclaim deed releasing its option of first refusal and its requirement that the property be used only for church purposes, after the board enters the required findings on its minutes, while reserving its mineral rights and right of ingress and egress.

Q: Does the city have to take bids or charge for the release?
A: No. The opinion states there is no need for consideration or bidding; Section 89-1-25 supplies the authority directly once the order and findings are entered on the minutes.

Q: What three findings must the board make?
A: As the opinion lists them: that the city is asserting no further claim of title, that the city received fair and reasonable market value at the original conveyance, and that at least five years have elapsed since the original conveyance.

Q: Can the city keep some interests when it quitclaims?
A: Yes. The opinion approves the city reserving its mineral rights and the accompanying right of ingress and egress to remove them while releasing the other interests.

Q: Does Section 89-1-25 apply only to cities?
A: No. The opinion quotes the statute as applying to "a board of trustees of any school district, governing authorities of any municipality or board of supervisors of any county."

Q: Does it matter that the 1997 order and minutes didn't include the restrictions?
A: The opinion notes the requester's concern that the restrictions were in the deed but not in the board's order or minutes, and explains that under Section 7-5-25 it cannot opine on the prior board's actions. It holds the current board may still proceed under Section 89-1-25, which applies where "any question of title arises with reference to the procedure of conveyance, description of the property ... or other matters connected therewith."

Background and statutory framework

Section 89-1-25 was enacted to provide a cleanup mechanism for political subdivisions' historical conveyances. Old restrictions, defective descriptions, procedural defects, or use clouds can encumber property for decades. The statute provides a mechanism to release those when:

1. The political subdivision asserts no further claim
2. Fair value was received originally
3. Five years have passed

The statutory text is broad: "[i]n all cases where ... governing authorities ... has heretofore attempted to convey or to obtain title to real property or any interest therein and thereafter any question of title arises..."

The release "shall be cut off and not thereafter brought into issue." This is a final disclaimer. Subsequent litigation cannot reopen the city's claim.

The 1981 Funderburk opinion was an early application: the AG approved municipal use of Section 89-1-25 to transfer interest. The 1999 Creekmore opinion confirmed any municipal interest can be extinguished by quitclaim. This 2022 opinion applies the framework to a use restriction plus option of first refusal.

The AG's Section 7-5-25 limit (no validation/invalidation of past actions) means the AG can't opine on whether the 1997 Board followed proper procedures. The current Board's authority under Section 89-1-25 does not depend on that historical question; the statute provides direct authority for cleanup.

Citations and references

Statutes:

• Miss. Code Ann. § 7-5-25, AG opinion authority
• Miss. Code Ann. § 89-1-25, quitclaim deeds by political subdivisions

Prior AG opinions cited:

• MS AG Op., Magee (Aug. 29, 2008), AG cannot validate/invalidate past actions
• MS AG Op., Creekmore (Mar. 26, 1999), any municipal interest extinguishable by quitclaim
• MS AG Op., Funderburk (July 30, 1981), municipal interest transfer under Section 89-1-25

Source

• Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
• Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2022/05/D.Martin-May-9-2022-Extinguishing-Municipal-Interest-in-Real-Property-with-Quitclaim-Deed.pdf

Original opinion text

May 9, 2022

Daniel M. Martin, Esq.
Attorney, Water Valley Board of Aldermen
203 Wagner Street
Water Valley, Mississippi 38965

Re: Extinguishing Municipal Interest in Real Property with Quitclaim Deed

Dear Mr. Martin:

The Office of the Attorney General has received your request for an official opinion.

Background

According to your request, the City of Water Valley (the "City") sold 8.443 acres of property to the Board of Trustees of Springhill North M.B. Church and their Successors in Office ("Springhill Church") after advertising in the local paper and accepting sealed bids per a previous order of the Board of Aldermen (the "Board"). The Board accepted Springhill Church's bid and confirmed the sale by order dated September 2, 1997, and the sale was executed on November 12, 1997.

As part of the conveyance, the City placed certain restrictions that state the property shall be used for "church purposes only" and also reserved to the City an option of first refusal to purchase the property back from Springhill Church should it ever decide to sell the same. Springhill Church now wishes to sell the property to a third party, but the restrictions and option of first refusal make it unmarketable. You also express concern that the restrictions were not part of the Board's order authorizing the sale nor do they appear in the official meeting minutes. The City is now desirous of cancelling the restrictions and the option of first refusal while reserving only the City's mineral rights and the right of ingress and egress to remove the same.

Question Presented

May the City execute a quitclaim deed to Springhill Church terminating all interests of the City in and to said parcel in question, except the City's mineral rights and the right of ingress and egress to remove the same, without consideration and without going through the bid process?

Brief Response

Yes, based on Section 89-1-25 of the Mississippi Code, after an order entered on its minutes that the requisite findings have been made, the City may execute a quitclaim deed to Springhill Church relinquishing its interest in the property while reserving its mineral rights and the right of ingress and egress to remove the same. There is no need for consideration or bidding.

Applicable Law and Discussion

As an initial matter, pursuant to Section 7-5-25, this office may only opine on prospective questions of law. An Attorney General's Opinion can neither validate nor invalidate past action. MS AG Op., Magee at *1 (Aug. 29, 2008). Therefore, this office cannot opine on previous actions of the Board regarding the disposal of municipal property or the Board's minutes regarding such.

Section 89-1-25 is entitled "Quitclaim deeds by school district" but also pertains to governing authorities of both municipalities and counties. It states as follows:

In all cases where a board of trustees of any school district, governing authorities of any municipality or board of supervisors of any county in the State of Mississippi has heretofore attempted to convey or to obtain title to real property or any interest therein and thereafter any question of title arises with reference to the procedure of conveyance, description of the property attempted to be conveyed or obtained or other matters connected therewith, and the governing authority of said school district, municipality or county determines by order entered on its minutes that the said political subdivision is asserting no further claim of title, that at the time of said attempted conveyance or disposition of said property, if property was conveyed or disposed of by the political subdivision, the said political subdivision did then receive the fair and reasonable market value of said property, and that a period of at least five (5) years has elapsed from the date of the said original attempted conveyance or disposition or obtaining of title of said property; the said board of trustees of said school district, governing authorities of said municipality or board of supervisors of said county, as the case may be, is thereupon hereby authorized, in its discretion, to execute quitclaim deeds and disclaimers of title on behalf of said political subdivision, after which any right or claim of said political subdivision in and to said realty shall be cut off and not thereafter brought into issue. Any such quitclaim deed or disclaimer of title heretofore executed by or on behalf of said political subdivision in accordance with the foregoing shall likewise be valid if executed in accordance with the provisions hereof.

(Emphasis added.) According to the statute, the City may execute a quitclaim deed to Springhill Church releasing the City's right to an option of first refusal and its right to require that the property be used only for church purposes. See MS AG Op., Creekmore at 1-2 (Mar. 26, 1999) (opining any municipal interest may be extinguished by quitclaim deed); MS AG Op., Funderburk at 2 (July 30, 1981) (indicating that municipality can transfer its interest under § 89-1-25). The Board must enter an order on the minutes that the City is no longer asserting a right to an option of first refusal or to require the property be used only for church purposes, that the City received fair and reasonable market value for the property when it was originally conveyed to Springhill Church in 1997, and that at least five years have elapsed since the original conveyance. It is the opinion of this office that the City may execute a quitclaim deed with the above releases, and once the quitclaim deed is executed, the City's claims shall be released, save for the reservation of mineral rights and the accompanying right of ingress and egress to remove such.

If this office may be of any further assistance to you, please do not hesitate to contact us.

Sincerely,

LYNN FITCH, ATTORNEY GENERAL

By: /s/ Misty Monroe
Misty Monroe
Special Assistant Attorney General