• Attorney General Clarifies Scope of Real Estate Negotiations Exception to Brown Act
  • February 7, 2012 | Authors: Sonia R. Carvalho; Grover C. Trask
  • Law Firms: Best Best & Krieger LLP - Irvine Office ; Best Best & Krieger LLP - Riverside Office
  • The State Attorney General recently clarified the real estate negotiations exception to California’s open meeting law (The Brown Act). As anticipated, the AG narrowly construes the exception, prioritizing the public’s right to transparency over the local government’s interest in protecting its bargaining power in real estate transactions. This narrow interpretation could impact the way local agencies handle closed session discussions.

    The real estate negotiations exception allows local agencies to discuss only a few specific topics in closed session: (1) amount of consideration they are willing to accept or pay in exchange for real property rights to be acquired or transferred in a particular transaction; (2) the form, manner and timing of how that consideration will be paid; and (3) items essential to arriving at the authorized price and payment terms, such that their public disclosure would be tantamount to revealing the information that the exception permits to be kept confidential.

    The opinion clearly requires that local agencies tie all of their negotiation points to price and terms of payment, since the AG makes it clear that you may only direct your negotiator on these points. While this limitation may appear to place additional constraints on local agencies, we believe most negotiation terms are, in fact, tied to price and terms of payment, and thus carefully drafted closed session memos and negotiation strategies will protect your agency from legal challenge.