NIH Grants Policy Statement
Revised October 2017. This document applies to all NIH grants and cooperative agreements for budget periods beginning on or after October 1, 2017.

10.6 Real Property Management Standards

10.6.1 General

Unless alternate requirements are specified in the governing statute:

Statutory provisions may specify alternate requirements for the length of the recipient's accountability obligations, the Federal right of recovery, or waivers. To the extent statutory provisions differ from the requirements of 42 CFR 52b and/or 45 CFR 75, including those described in this subsection, the statutory provisions, as reflected in the terms and conditions of the award, apply.

Real property constructed, modernized, or otherwise altered as part of a major alteration with NIH grant support may not be conveyed, transferred, assigned, mortgaged, leased, or in any other manner encumbered by the recipient, except as expressly authorized in writing by NIH. If the recipient defaults in any way on a mortgage, the recipient shall immediately notify the GMO by telephone and in writing. If the mortgagor intends to foreclose, the recipient must notify the GMO in writing at least 30 days before the foreclosure action is initiated.

The mortgage agreement must specifically allow, in the case of default, that NIH or its designee may assume the role of mortgagor and continue to make payments. If NIH (or its designee) chooses not to assume the role of mortgagor, the mortgagee (recipient) must pay NIH an amount equal to the share of the sales proceeds otherwise due the recipient (mortgagor) times the Federal share in the property.

Any NIH assignment of the property and mortgage responsibilities to any party other than NIH shall be subject to prior approval of the mortgagor.

10.6.2 Notice of Federal Interest

To protect the Federal interest in real property constructed, or where applicable, improved with NIH grant funds, recipients shall record a NFI in the appropriate official records of the jurisdiction in which the property is located as required by 45 CFR 75.323 and the NIHGPS. The NFI is required when use and disposition conditions apply to the property as stated in the NoA. The time of recordation shall be when construction begins. The recipient should consult with the GMO prior to recording the NFI, if necessary, to determine if the NFI is required under the award. Fees charged for recording the NFI may be charged to the grant (see Allowable and Unallowable Costs and Activities in this chapter). A copy of the recorded NFI must be provided to the GMO within 10 days following the date of recordation. To obtain a sample NFI, contact the GMO.

10.6.3 Insurance Requirements

Builder's risk insurance is required at the time construction begins. The insurance must cover potential losses after initiation, but before completion, of the construction or modernization caused by theft, fire, vandalism, and other types of accidental loss or damage to the structure.

Immediately upon completion of construction, a nongovernmental recipient shall, at a minimum, provide the same type of insurance coverage as it maintains for other property it owns, consistent with the minimum coverage specified below. "Completion of construction" means either the point at which the builder turns a facility constructed with NIH grant support, or portion of a facility modernized or modified under a major A&R project, (that conforms to the design and specifications approved by the NIH and is available for occupancy) over to the recipient (i.e., the date of the final acceptance of the building or portion of a building) or the date of beneficial occupancy, whichever comes first.

If title to real property constructed, modernized, or altered under a major A&R project under an NIH grant vests (or will vest upon completion) in the recipient, the following minimum insurance coverage is required:

Governmental recipients may follow their own insurance requirements. Federally owned property provided to a recipient for use need not be insured by the recipient.

The NIH awarding IC may waive one or both of the requirements above if the recipient shows that it is effectively self-insured against the risks involved. The term "effectively self-insured" means that the recipient has sufficient funds to pay for any damage to the facility, including total replacement if necessary, or to satisfy any liens placed against the facility. If the recipient claims self-insurance, the recipient must provide to NIH assurance that it has sufficient funds available to replace or repair the facility or to satisfy all liens. This assurance should state the source of the funds, such as the organization's endowment or other special funds set aside specifically for this purpose.

10.6.4 Use of Facility and Disposition

NIH construction grants require that the facility be used for biomedical or behavioral research for as long as needed for that purpose for the period prescribed in the NoA. The date of beneficial occupancy is the date that a facility constructed or modernized with NIH grant support conforming to the design and specifications approved by the NIH are available for occupancy and fully operational to carry out all intended facility/research activities. During that time, the recipient must use the facility for the originally authorized purpose unless it obtains prior approval from the NIH awarding IC to use the facility for an alternate purpose. To ensure a recipient's compliance with the facility usage requirement, the IC GMO will periodically (e.g., at least every two years) survey the recipient throughout the usage period and request a self-certification concerning continued use. NIH may also obtain the names of the investigator(s) occupying the space and an indication of their research interests. Most of the monitoring will be accomplished in this manner. However, NIH staff may perform periodic site visits to observe the use of the grant-supported space throughout the usage period. After the required usage period, NIH will no longer directly monitor the use of the space.

When use and disposition conditions apply to real property supported under an NIH award, the recipient may not convey, transfer, assign, mortgage, lease, or in any other manner encumber such property without the prior written approval from the awarding office. If the recipient decides that the grant-support space is no longer needed before the expiration of the period of Federal interest, the recipient must request written disposition instruction from the awarding office. This action must be done prior to the recipient's making any irreversible commitment related to property disposition. In this case, NIH may consider an alternate use of the facility or provide disposition instructions.

In determining whether to approve an alternate use of the facility, NIH will take into consideration the extent to which the facility will be used for:

The usage obligation may also be transferred to another facility with the prior approval of NIH. If approved, the remaining usage obligation shall be released from the original facility constructed with grant funds and transferred to the new facility. The recipient remains subject to all other requirements imposed by the NoA or successor document (if the change occurs following the period of grant support).

For disposition of property acquired on an amortized acquisition basis, the computation of the Federal share of real property acquired with long-term debt financing will be computed for each year of grant support in which Federal funds are used to meet all or a portion of the down payment and/or principal on the mortgage.

10.6.5 Real Estate Appraisals

If a real estate transaction funded in whole or in part by NIH requires the use of a real estate appraisal (including, but not limited, to appraisals to determine the Federal share of real property and appraisals to determine required insurance levels), the appraisal must be performed by appraisers certified or licensed by the applicable State in accordance with the requirements established by Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended (Public Law 101-73).