The Role of Grant Agreements in Funding Private Projects

Aug. 2015: Many communities create grant agreements to set clear expectations when granting CPA funds for projects on privately-owned property. A grant agreement helps to ensure that the CPA funds are used appropriately and provides clear procedures to remedy problems or unforeseen circumstances.

Grant agreements typically specify what the funds are intended to be used for, any conditions of funding (such as acquiring matching funds or executing a deed restriction), reporting and monitoring requirements, and what remedies would be required should the funds be used improperly or not entirely used. Note that a grant agreement, if it is an "agreement between a governmental body and an individual or nonprofit entity, the purpose of which is to carry out a public purpose of support or stimulation, instead of procuring supplies or services for the benefit or use of the governmental body," is exempt from Chapter 30B requirements (M.G.L. Chapter 30B, Section 2; for more information on this exemption, click here).

Grant agreements are executed after the municipality’s legislative body approves the use of the funds but prior to distributing the funds to the private organization. The agreement is accepted (signed) by both the municipality and the party receiving the CPA funds. It is critical to involve your community’s legal staff in the early stages of these types of projects.

To help communities draft grant agreements, the Community Preservation Coalition has collected a variety of examples, shown below. The grant agreements are divided into two categories: General grant agreements, and those designed for use when a community transfers CPA funding to an affordable housing trust:

General Grant Agreements

Grant Agreements for Appropriations to a Housing Trust