The Bureau of Land Management Should Follow Fair Market Value Requirements in Selling Land in Las Vegas, NV

Gao ID: RCED-84-127 March 27, 1984

Pursuant to a congressional request, GAO evaluated procedures used by the Bureau of Land Management (BLM) to sell land in Las Vegas, Nevada, to determine whether BLM complied with federal requirements that land be sold for no less than its fair market value. Fair market value is defined as the price for which a property would be sold by an informed owner willing, but not obligated, to sell to an informed buyer willing, but not obligated, to buy.

GAO found that the BLM preferred sale procedure is an auction, followed by over-the-counter sales of land parcels not sold at auction. BLM sets the minimum bid for each parcel before the auction. The minimum acceptable bid is usually the fair market value. Because of concern over lagging sales at auctions, BLM reduced by 15 percent the appraised fair market value for 46 parcels of land. BLM believed that the lower prices complied with federal requirements because the reduced prices represented the fair market value for a 1-day sale. BLM believed that it needed to sell the land quickly to provide revenue for Forest Service land acquisitions. However, funds for the Forest Service acquisitions were appropriated from the Land and Water Conservation Fund and, while BLM is required to reimburse these appropriations, it does not have to do so until 1995. Consequently, GAO believes that BLM did not need to discount land to sell it quickly and that, by discounting land in the Nevada sales, BLM did not comply with fair market value requirements.


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