Real Estate Acquisition Guide For Local Public Agencies

168 Pages·2009·1.71 MB·English

by  Federal Highway Administration

Real Estate Acquisition Guide
For Local Public Agencies

Source: USDOT

2018 EDITION

Publication No. FHWA-HEP-19-011
Real Estate Acquisition Guide for Local Public Agencies 2018

TABLE OF CONTENTS

I. Introduction ......................................................................................................................... 1
Primary Law for Acquisition and Relocation Activities ....................................................... 1
II. The Uniform Act and the Government-wide Regulation ............................................... 3
What Does the Uniform Act Do? ......................................................................................... 3
When Does the Uniform Act Apply? ................................................................................... 3
The Uniform Act ................................................................................................................... 4
Eminent Domain and Condemnation .................................................................................... 5
The Government-wide Regulation – 49 CFR Part 24 ........................................................... 5
Federal-aid Participation (Funding) ...................................................................................... 6
III. Project Development ........................................................................................................ 7
General .................................................................................................................................. 7
Planning ................................................................................................................................ 8
Environmental Coordination ............................................................................................. 9
Public Involvement ........................................................................................................... 9
Typical Project Development Cycle ..................................................................................... 9
Development of Project Alternatives ................................................................................ 9
Hazardous Materials and Contaminants ......................................................................... 10
Environmental Assessment ............................................................................................. 10
Public Involvement ......................................................................................................... 11
Selection of Alignment ................................................................................................... 11
Project Design ................................................................................................................. 11
Utilities ......................................................................................................................... 11
Right-of-Way Plans...................................................................................................... 12
Acquisition ...................................................................................................................... 12
Right-of-Way Certification ............................................................................................. 13
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2018 Real Estate Acquisition Guide for Local Public Agencies
IV. Administrative Matters .................................................................................................. 15
Direct Federal Acquisition vs. Federal Assistance ............................................................. 15
Federal-aid Highway programs ........................................................................................... 15
Authorization, Apportionment, Appropriation ............................................................... 15
Project Authorization and Agreements ........................................................................... 15
Cost-Sharing/Credits ....................................................................................................... 16
Donations ..................................................................................................................... 16
Disposition of Certain Revenues ................................................................................. 17
FHWA Contracting Requirements ...................................................................................... 17
Agency Organization & Conflict of Interest ....................................................................... 17
V. Valuation ........................................................................................................................... 19
Just Compensation .............................................................................................................. 19
The Appraisal Requirement ................................................................................................ 19
Appraisal Waiver and Waiver Valuations .......................................................................... 19
Appraisal ............................................................................................................................. 21
Appraisal Standards and Requirements .............................................................................. 21
Appraiser Qualifications and State Certification ............................................................ 22
Owner Accompaniment .................................................................................................. 22
Appraisal Criteria ............................................................................................................ 23
Appraisal Review ................................................................................................................ 24
Deficient Appraisals ........................................................................................................ 25
Review Considerations ................................................................................................... 25
Appraisal Review Certification and Report .................................................................... 26
Appraisal Review Contracting ............................................................................................ 27
Approved Fair Market Value and Just Compensation ........................................................ 27
VI. Acquisition....................................................................................................................... 29
Basic Acquisition Requirements ......................................................................................... 29
Personal Contact ............................................................................................................. 30
First Offer by Mail ....................................................................................................... 31
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Real Estate Acquisition Guide for Local Public Agencies 2018

Prompt Written Offer ...................................................................................................... 31
Owner Opportunity to Consider Offer ............................................................................ 32
No Coercive Action ........................................................................................................ 32
90-Day Notice ................................................................................................................. 32
Negotiator Log ................................................................................................................ 33
Negotiation Options ........................................................................................................ 34
Administrative Settlements .......................................................................................... 34
Alternate Dispute Resolution - Mediation ................................................................... 35
Payment Before Possession ............................................................................................ 35
Condemnation ..................................................................................................................... 36
Role of Legal Counsel .................................................................................................... 36
Condemnation Proceedings ............................................................................................ 36
Legal Settlements ............................................................................................................ 37
Court Awards .................................................................................................................. 38
Alternative Means of Property Acquisition ........................................................................ 38
Donations ........................................................................................................................ 38
Donations in Exchange for Construction Features ......................................................... 39
Dedications ..................................................................................................................... 39
Additional Considerations .................................................................................................. 40
Assessments .................................................................................................................... 40
Functional Replacement .................................................................................................. 41
Inverse Condemnation .................................................................................................... 42
Uneconomic Remnants ................................................................................................... 42
Tenant-Owned Improvements ........................................................................................ 43
Owner Retention of Improvements ................................................................................. 44
Hardship and Protective Buying ..................................................................................... 44
VII. Relocation Assistance.......................................................................................................... 47
Relocation Planning ................................................................................................................. 48
Notices ..................................................................................................................................... 48
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Advisory Services ............................................................................................................... 50
Relocation Assistance Payments ........................................................................................ 51
Residential Displacements .............................................................................................. 52
Replacement Housing Standards ................................................................................. 52
Mobile Homes .............................................................................................................. 54
Business Displacements .................................................................................................. 54
Typical Relocation Process Under the Uniform Act .......................................................... 57
VIII. Property Management ................................................................................................ 59
Property Management from Acquisition to Project Closeout ............................................. 60
Administration ................................................................................................................ 60
Interim Leasing ............................................................................................................... 61
Right-of-Way Clearance ................................................................................................. 61
Property Management after Project Closeout ..................................................................... 62
Post-Closeout Functions ................................................................................................. 62
Glossary ................................................................................................................................. 65
Appendix
The Uniform Act ................................................................................................................... 71
The Uniform Act – Common Rule – 49 CFR Part 24 ........................................................ 95
Right-of-Way Regulations – 23 CFR 710 .......................................................................... 145
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Real Estate Acquisition Guide for Local Public Agencies 2018

I. INTRODUCTION

This guide is intended to serve as a basic reference for local public agencies and others who
receive Federal-aid highway funds for projects involving the acquisition of real property.
Typically, the Federal Highway Administration (FHWA) provides funds to State governments
who carry out highway projects. These funds are used to support activities related to building,
improving, and maintaining designated public roads. In some circumstances, the States pass
on the funds to local governments or private entities. Eligibility to receive Federal funds
depends upon compliance with Federal laws, regulations, and policies. State and local
governments often have additional requirements that apply.

One set of project activities eligible for Federal-aid funding involves the acquisition of real
property and the relocation of residents, businesses, and others. Concern for fair and equitable
treatment in acquiring private property for public purposes goes back to the beginnings of the
United States. The founding fathers
placed a high value on the protection of private property.
The United States Constitution expresses this philosophy in 
the Fifth Amendment, where ‘due process’ and ‘just From 5th Amendment
compensation’ are required for taking private property for a
U.S. Constitution
‘public use.’

The 14th Amendment to the Constitution extends to States "No person shall. . . be
the requirement of following due process when they acquire
deprived of life,
privately owned property.
liberty, or property,

There are several reasons that the Federal Government without due process of
retains a deep interest in the acquisition of real property for
law; nor shall private
federally assisted projects. The most important is ensuring
property be taken for
that the Fifth Amendment mandates of due process and just
compensation are met when property owners are affected by public use without just
Federal-aid projects. Another is the goal of acquiring
compensation."
property without delaying the project for which it is needed.
Finally, the Federal government is concerned that Federal
tax dollars used to fund public improvement projects are 
spent in an appropriate fashion.

PRIMARY LAW FOR ACQUISITION AND RELOCATION ACTIVITIES

Public Law 91-646, The Uniform Relocation Assistance and Real Property Acquisition
Policies Act of 1970, as amended, commonly called the Uniform Act, is the primary law for
acquisition and relocation activities on Federal or federally assisted projects and programs.

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2018 Real Estate Acquisition Guide for Local Public Agencies
Other Federal, State, and local laws also govern public project and program activities. The
requirements of other Federal laws that affect the process of acquiring private property for
public purposes are discussed, at least minimally. However, our primary emphasis in this
document will be the Uniform Act and its requirements.

Federal real estate acquisition statutes and regulations include:

United States Code (U.S.C.)

o Title 23 - Highways
o Title 42, CHAPTER 61 - Uniform Relocation Assistance and Real Property
Acquisition Policies for Federal and Federally Assisted Programs
o Title 49 - Transportation

Code of Federal Regulations (CFR)

o 23 Part 710
o 49 Part 24

NOTES:
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Real Estate Acquisition Guide for Local Public Agencies 2018

II. THE UNIFORM ACT AND THE GOVERNMENT-WIDE
REGULATION

WHAT DOES THE UNIFORM ACT DO?

The Uniform Act applies to all projects receiving Federal funds or Federal financial assistance
where real property is acquired or persons are displaced as a result of acquisition, demolition,
or rehabilitation. Anyone connected with the process of acquiring real property for federally
assisted projects should be familiar with its provisions. A copy of the Uniform Act (and its
implementing regulations) may be found in the Appendix of this guide.

The Uniform Act provides benefits and protection for persons whose real property is acquired
or who are displaced from acquired property because of a project or program that uses Federal
funds or receives Federal financial assistance. The Constitution requires payment of just
compensation for real property which is acquired and, when a project results in displacement,
the Uniform Act requires services and payments be provided for displaced persons. A
displaced person may be an individual, family, business, farm, or non-profit organization.

WHEN DOES THE UNIFORM ACT APPLY?

The Uniform Act applies when Federal dollars are utilized in any phase of a project. The
Uniform Act applies even when Federal dollars are not used specifically for property
acquisition or relocation activities, but are used elsewhere in the project, such as in planning,
environmental assessments, or construction. The Uniform Act also applies to acquisitions by
private as well as public entities when the acquisition is for a Federal or federally-assisted
project.

You must advise property owners and occupants of their rights under the Uniform Act by
means of a written statement or brochure. You may obtain electronic versions of the Federal
Highway Administration's brochures on Acquisition and Relocation from our website at:

Acquiring Real Property for Federal and Federal-aid Programs and Projects - Acquisition -
Uniform Act - Real Estate - FHWA

You must make sure that displaced persons receive all the benefits and protections to which
they are entitled. A fuller discussion of the Uniform Act's benefits and protections will be found
in the sections and chapters that follow.

You should work closely with your State Department of Transportation (SDOT) during the
entire acquisition process, both to expedite acquisition and to assure that all Federal and State
requirements are met. Typically, the SDOT will have an experienced real estate staff that
II. The Uniform Act and the Government-wide Regulation 3
2018 Real Estate Acquisition Guide for Local Public Agencies
can serve as a valuable resource to your agency. Some SDOTs also have designated a staff
member as a local public agency coordinator. In addition, SDOTs may have programs to assist
local governments in complying with federally assisted project requirements. These programs
may include providing technical assistance and training for local acquiring agency personnel
as well as samples of informational brochures, form letters, and claim forms.

THE UNIFORM ACT

The Uniform Act is divided into three major sections or titles.

Title I, "General Provisions," primarily covers definitions.

Title II, "Uniform Relocation Assistance" contains provisions relating to the
displacement of persons or businesses by Federal or federally assisted programs or projects.
An overview of the relocation requirements is provided in Chapter VII, Relocation
Assistance. However, relocation under the Uniform Act is a specialized and complex
subject. If you do not have staff qualified to administer a relocation program, you
should seek assistance from your SDOT to ensure that displaced persons are provided
all appropriate assistance and payments. Qualified relocation consultants also may
provide these services.

Title III, "Uniform Real Property Acquisition Policy" pertains to the acquisition of real
property for Federal or federally assisted programs or projects. An overview of acquisition
requirements is provided in Chapter VI, Acquisition. One of the purposes of Title III is to
encourage and
expedite the acquisition of real

property through negotiation with
property owners, thereby avoiding Acquisition Objectives of the Uniform Act
litigation and relieving congestion in • Treat individuals fairly and
the courts. Other purposes include consistently.
assuring consistent treatment for
• Encourage acquisition by agreement.
property owners in Federal
• Minimize litigation
programs and promoting public
confidence in Federal land
acquisition practices.

Each State has provided assurances that they can fully comply with the Uniform Act. Local
acquiring agencies must certify that they have followed their State's Uniform Act assurances
when acquiring real property.

Note: Failure to comply with the provisions of the Uniform Act will
result in denial of Federal participation in project costs.
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Real Estate Acquisition Guide for Local Public Agencies 2018

EMINENT DOMAIN AND CONDEMNATION

When amicable agreement cannot be reached through negotiations, the governmental power
of eminent domain may be utilized to acquire real property. When eminent domain is utilized,
the judicial system becomes the forum for establishing just compensation. The court will
determine just compensation in the context of State eminent domain statutes and relevant case
law. Consequently, what is compensable varies among the States. A number of States have
adopted laws providing property owners compensation for conditions such as loss of business,
loss of good will, noise, increased travel distance, and owner litigation costs.

Note: You should consult with your SDOT for advice as to what is or
is not compensable under your State law.

THE GOVERNMENT-WIDE REGULATION – 49 CFR PART 24

The basic regulation governing acquisition
and relocation activities on all Federal and
federally assisted programs and projects is 49
CFR Part 24, the Uniform Act government-
wide regulation (a copy of 49 CFR Part 24 is
in the Appendix). FHWA is the lead agency
for the Uniform Act and is responsible for the
promulgation and maintenance of the
government-wide regulation.

In addition to the government-wide

regulation, Federal agencies adopt program

regulations which govern acquisition,
relocation, and other matters specific to their
programs. For example, agencies receiving
http://www.gpoaccess.gov/cfr/index.html funds from the FHWA, directly or through an
SDOT, are subject to the regulations found in
23 CFR, which is entitled "Highways." These regulations are found at various locations in 23
CFR, mostly in Part 710. These regulations address highway-related issues not covered by the
Uniform Act. A copy of 23 CFR, Part 710, Right-of-Way and Real Estate is in the Appendix.
II. The Uniform Act and the Government-wide Regulation 5