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Anchorage, AK (Remote with Fairbanks and Juneau)
April 19-21, 2016
FHWA Resourcer Center: Appraisal/Relocation Under the Uniform Act Workshop
2016
Alaska 1
Appraisal and RelocationUnder the Uniform Act Workshop
1
WORKSHOP GOAL
The purpose of this WORKSHOP is to provide knowledge and skills
for effective right of way appraisal and relocation in Federal funded
projects.
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2016
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Workshop OrganizationApril 19‐20, 2016
0 Introduction 1 The Historical Context of the Uniform Act 2 The Acquisition of Private Property3 Uniform Act Appraisal Requirements4 Appraisal Complexity/Scope of Work5 Project Development6 Appraisal Review7 Yellow Book8 Resources
3
Workshop Organization
9 General Relocation Requirements10 Replacement Housing Eligibility11 Replacement Housing Payments for 90‐Day Owner‐
Occupants12 Replacement Housing Payments for 90‐Day Tenants13 Housing of Last Resort14 Moving Expenses: Residential & Nonresidential
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Workshop OrganizationApril 20‐21, 2016
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Marshall Wainright• Realty /NEPA Team Leader•[email protected]
Michele Palicka• Realty Specialist• [email protected]
61 Forsyth Street, SWSuite 17T26Atlanta, GA 30303Phone: 404‐562‐3692
61 Forsyth Street, SWSuite 17T26Atlanta, GA 30303Phone: 404‐562‐3918
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“Appraisal/Appraisal Review Requirements on Federal‐aid Highway Projects”
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“Appraisal/Appraisal Review Requirements on Federal‐aid Highway Projects”
COMPLIANCE = FEDERAL FUNDING $
NON-COMPLIANCE = FEDERAL FUNDING $
7
Upon completing this workshop, you will be able to:1) Explain the purpose of the Uniform Act;2) Discuss the appraisal provisions of the Uniform
Act and Federal regulations (including the importance of the “Scope of Work”);
3) Explain the difference between key regulatory terms (i.e. “Eminent Domain” v. “Condemnation”; “Fair Market Value” v. “Just Compensation”, etc.)
8
Workshop Objectives
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You will be able to:4) Discuss the concept of “Eminent Domain”; list
the sovereign powers of government, and the limitations on those powers;
5) Discuss the critical importance of the appraisal and appraisal review processes;
6) Explain the proper use and application of the waiver valuation process;
9
Workshop Objectives
You will also be able to:7) Describe the roles of the review appraiser in
the project development process;8) Discuss the Federal-Aid appraisal review
requirements;9) Identify when the use of the “Yellow Book” is
appropriate;10)Define the term “Uneconomic Remnant” and
discuss its significance.10
Workshop Objectives
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Workshop Objectives You will also be able to: 11) Explain advisory services12) Identify the three required relocation notices13) List the residential categories and payments14) List eligible nonresidential moving and
reestablishment expenses 15)
11
Session 1: Historical Context of the Uniform Act
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At the end of this lesson, you will be able to:• State the purposes of the Uniform Act• Identify the key Uniform Act provisions
regarding appraisal and appraisal review• Identify the regulations that implement the
Uniform Act • Explain the importance of Uniform Act
compliance
Learning Outcomes
Historical Context of the Uniform Act:– The Blatnick Report– Signed in 1971–Amended in 1987, 1991, 1997 and 2012
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The “Uniform Relocation Assistance and Real Property acquisitions Policies Act of 1970, As Amended”
(Uniform Act)CITE- 42 USC CHAPTER 61 - UNIFORM RELOCATION ASSISTANCE AND REAL PROPERTY ACQUISITION POLICIES FOR FEDERAL AND FEDERALLY ASSISTED PROGRAMS 01/03/2012 (112-90) Link to the Uniform Act on-line:
http://uscode.house.gov/view.xhtml?path=/prelim
@title42/chapter61&edition=prelim15
Uniform Act Purpose‐ Acquisition:– Treat owners fairly and consistently– Encourage acquisition by negotiation–Minimize litigation–Promote public confidence
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Uniform Act Purpose – Relocation– Treat individuals fairly and equitably–Do no cause disproportionate injury
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Uniform Act – Components
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Uniform Act Assurances
Assurances and Compliance Requirements
All states have provided assurances indicating full compliance with all mandatory Uniform Act provisions, as revised.
All acquiring agencies must comply with mandatory requirements or risk losing Federal project funding.
19
Key Uniform Act Provisions RE: Appraisal/Appraisal Review
• Afford owner opportunity to accompany appraiser. • Establish just compensation (JC) amount. • Disregard increase or decrease in value caused by project. • Provide written statement of and summary of basis for JC. • Agency shall offer to acquire uneconomic remnants.
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Federal Regulations• 49 CFR Part 24 – Department of Transportation
• 23 CFR Part 710 ‐ Highways
2121
49 CFR Part 24 ‐ Timeline–1971 – January 2, Uniform Act implemented–1985 – Model “Uniform Rule” published–1987 – USDOT confirmed as “Lead Agency”–2005”Final” rule published, effective 2/3/05
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At the end of this lesson, you will be able to:• What are the purposes of the Uniform Act?• What are the key Uniform Act provisions
regarding appraisal and appraisal review?• Identify the regulations that implement the
Uniform Act • Explain the importance of Uniform Act
compliance
REVIEW
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Session 2: The Acquisition of Private Property
25
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At the end of this lesson, you will be able to:• List the limitations on the power of eminent
domain• Differentiate between just compensation and fair
market value• Explain three reasons for preparing an appraisal
Learning Outcomes
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Eminent Domain
27
The power of any sovereign government to take private property without the consent of the owner.
Limitations on Eminent Domain:• Constitutions: Federal and State• Statutes• Regulations• Case Law
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U.S. Constitution
“… nor shall private property be taken for public use without
just compensation.”
5th Amendment
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14th Amendment U.S. Constitution
“…nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”
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31
State Constitutional LimitationsExample of a State constitution
“No person’s property shall be taken, damaged or destroyed for or applied to
public use without adequate compensation being made…”
32
AlaskaConstitution
Article ISection 18. Eminent DomainPrivate property shall not be taken or damaged for public use without just compensation.Eminent domain is the inherent right of government to take private property for a public purpose. Alaska’s constitution here requires the state government to compensate fairly the owners of property it condemns under the power of eminent domain (see also Article VIII, Section 18). Every state Constitution and the U.S. Constitution (Fifth Amendment) require just compensation to the owner of property condemned by the government.The most common eminent domain action is the acquisition of rights‐of‐way for road andhighway construction, although the power is occasionally exercised to acquire land for schools, public buildings, pipelines and utility transmission lines. There is substantial statutory law governing its use (e.g., AS 09.55.240). The state has delegated its power of eminent domain to municipalities, public corporations, and public and private utilities, but all are bound by this requirement to pay just compensation…
California ARTICLE 1 DECLARATION OF RIGHTS SEC. 19. (a) Private property may be taken or damaged for a public use and only when just compensation, ascertained by a jury unless waived, has first been paid to, or into court for, the owner. The Legislature may provide for possession by the condemnor following commencement of eminent domain proceedings upon deposit in court and prompt release to the owner of money determined by the court to be the probable amount of just compensation. (b) The State and local governments are prohibited from acquiring by eminent domain an owner-occupied residence for the purpose of conveying it to a private person. (c) Subdivision (b) of this section does not apply when State or local government exercises the power of eminent domain for the purpose of protecting public health and safety; preventing serious, repeated criminal activity; responding to an emergency; or remedying environmental contamination that poses a threat to public health and safety. (d) Subdivision (b) of this section does not apply when State or local government exercises the power of eminent domain for the purpose of acquiring private property for a public work or improvement. (e) For the purpose of this section: 1. "Conveyance" means a transfer of real property whether by sale, lease, gift, franchise, or otherwise. 2. "Local government" means any city, including a charter city, county, city and county, school district, special district, authority, regional entity, redevelopment agency, or any other political subdivision within the State. 3. "Owner-occupied residence" means real property that is improved with a single-family residence such as a detached home, condominium, or townhouse and that is the owner or owners' principal place of residence for at least one year prior to the State or local government's initial written offer to purchase the property. Owner-occupied residence also includes a residential dwelling unit attached to or detached from such a single-family residence which provides complete independent living facilities for one or more persons. 4. "Person" means any individual or association, or any business entity, including, but not limited to, a partnership, corporation, or limited liability company. 5. "Public work or improvement" means facilities or infrastructure for the delivery of public services such as education, police, fire protection, parks, recreation, emergency medical, public health, libraries, flood protection, streets or highways, public transit, railroad, airports and seaports; utility, common carrier or other similar projects such as energy-related, communication-related, water-related and wastewater-related facilities or infrastructure; projects identified by a State or local government for recovery from natural disasters; and private uses incidental to, or necessary for, the public work or improvement. 6. "State" means the State of California and any of its agencies or departments.
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STATUTORY LIMITATIONS ON EMINENT DOMAIN:• Both Federal and State legislation can limit the power of eminent domain
• Federal: Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended
33
CASE LAW LIMITATIONS ON EMINENT DOMAIN:
• Includes decisions written by an appellate court
• Is the most prolific source of the law• Can overturn both statutes and regulations
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Just Compensation“…nor shall private property be taken for
public use without just compensation.”
Traditionally, courts have held that appraisals of fair market value are usually
the measure of just compensation.
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Concept of Just Compensation
“…it is the duty of the State, in the conduct of the inquest by which the compensation is
ascertained, to see that it is just, not merely to the individual whose property is taken, but
to the public which is to pay for it.”
Source: Bauman v. Ross, 167 U.S. 548, 574 (1897)
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The Fifth Amendment to the U.S. Constitution proscribes the taking of private property by the government for public use without just compensation.
No precise formula exists by which the elements of just compensation can be calculated.
Ordinarily, the amount should be based upon the loss to the owner, as opposed to the gain by the taker.
What does “Just Compensation” really mean?
38
What is “Just Compensation”?The owner should be fairly and fully indemnified for the damage that he or she has sustained.
The owner has a right to recover the monetary equivalent of the property taken and is entitled to be put in as good a financial position as he or she would have been in if the property had not been taken.
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Generally, the measure of damages for property condemned through eminent domain is its fair market value, since the sentimental value to the owner is not an element for consideration.
Market value, however, is not an absolute method of valuation but rather a practical standard to aid the courts in their determination of just compensationbased upon constitutional requirements.
What is “Just Compensation”?
40
When just compensation is assessed, all elements that can appropriately enter into the question of value are regarded.
For example, the original cost of the property taken, added to the cost of reproduction or replacement, minus depreciation, can be considered when the market value of property is determined.
Source: West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.
What is “Just Compensation”?.
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41
Fair Market Value• The Uniform Act uses the
term fair market value, but does not define it
• Each State has its own definition
• All definitions contain the same basic elements
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Sample DefinitionFair Market Value
“The most probable price, as of a specified date, in cash, or in terms equivalent to cash, or in other precisely revealed terms, for which the specified property rights should sell after reasonable exposure in a competitive market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably, and for self-interest, and assuming that neither is under undue duress.”
The Dictionary of Real Estate Appraisal, 4th Ed.
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Fair Market Value vs. Just CompensationThe purpose of an appraisal is to estimate fair market value (FMV), which is believed to be just compensation. However JC can exceed FMV for a number of reasons.
1 2 3Appraisal Yardstick
Most often appraised value and JC are equal.
JC Can Exceed FMV for Various Reasons• Property difficult to value accurately.
• Recent court awards are higher.
• Cost of litigation.
• Risk of trial.
Fair Market Value (FMV)
Just Compensation (JC)
Administration or Legal Settlement
Just Compensation (JC) – Actual
43
44
• Just compensation is required for taking private property
• Fair market value has traditionally been held in court as a measure of just compensation
• Uniform Act requires an appraisal
Why Do an Appraisal?
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45
REVIEW• List the limitations on the power of eminent
domain
• Is there a difference between just compensation and fair market value?
• What are three reasons for preparing an appraisal?
Session 3: Appraisal Requirements of the Uniform Act
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47
Learning OutcomesAt the end of this lesson you will be able to: • Identify the key elements of the valuation
process
• Explain a waiver valuation
• Define an appraisal based on 49 CFR 24.2(a)(3)
• Explain the requirements an appraiser must adhere to when preparing highway appraisals
48
Learning OutcomesYou will also be able to: • Define an uneconomic remnant • Explain the Agency’s obligation related to uneconomic remnants
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49
49 CFR Part 24 • Implements the Uniform Act
• Establishes the requirements concerning appraisals for Federal or federally-assisted programs or projects
• Addresses appraisal and appraisal review requirements in Subpart B
Appraisal Requirements• 24.2, Definitions (appraisal, uneconomic remnant)
• 24.102, Basic acquisition policies• 24.103, Criteria for appraisals• 24.104, Review of appraisals (review process)• 24.105, Acquisition of tenant‐owned improvements
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Valuation ProcessAppraisal
Appraisal Review
Establishment of amount agency believes to be just compensation
51P. L. 91-646, as amendedTitle III, Section 301
Key Elements
52
Exceptions• Donations by property owner
24.102(c)(2)(i)
• Waiver valuations—determined by the Agency
24.2(a)(33)24.102(c)(2)(ii)
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Waiver Valuation
Waiver ValuationProvides an alternative valuation method for a specific property
Agency determine opportunities to waive appraisals
Agencies may use waiver valuations when property being acquired is valued at less than $10,000 and the problem is uncomplicated.
There is no standard format for a waiver valuation.
Note: An Agency may go up to $25,000 provided they offer the owner of his/her option to have Agency appraise. 53
54
Uniform Standards of Professional Appraisal Practice (USPAP)
• National standards adopted by each State appraisal certification board
• Resulted from the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA)
• Promulgated by The Appraisal Foundation• Updated on a regular basis
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Basic Differences of URA and USPAP
• URA and USPAP are consistent • USPAP does not:
– Include specific Uniform Act requirements– Reflect eminent domain issues– Reflect specific Agency program
requirements
USPAP Compatibility• Jurisdictional exception rule – provides
for situation in which parts of USPAP may be precluded by law or regulation
• Conditions of assignment
• URA requires written appraisal report –USPAP does not require written appraisal report
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49 CFR 24.103 Criteria for Appraisals(with references to USPAP “Consistency” Issues)
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49 CFR 24.103 Criteria for Appraisals(with references to USPAP)
§ 24.103 Criteria for appraisals.(a) Appraisal requirements. This section sets forth the
requirements for real property acquisition appraisals for Federal and federally‐assisted programs. Appraisals are to be prepared according to these requirements, which are intended to be consistent with the Uniform Standards of Professional Appraisal Practice (USPAP). 1 (See appendix A, § 24.103(a)
1. “Uniform Standards of Professional Appraisal Practice”(USPAP); published by the Appraisal Foundation.
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Appraisal Provisions of 49 CFR Part 24 (and USPAP “Consistency” Issues)
§ 24.103 Criteria for appraisals.§ 24.103 (a) Appraisal Requirements. . . The Agency may have appraisal requirements that supplement these requirements, including, to the extent appropriate, the Uniform Appraisal Standards for Federal Land Acquisition (UASFLA). 2
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49 CFR 24.103 Criteria for Appraisals(URA “requirements” v. USPAP “standards”)
Part 24, Appendix A§ 24.103 Criteria for appraisals.§ 24.103(a) Appraisal requirementsThe term “requirements” is used throughout this section to avoid confusion with The Appraisal Foundation's Uniform Standards of Professional Appraisal Practice (USPAP) “standards.” Although this section discusses appraisal requirements, the definition of “appraisal” itself at §24.2(a)(3) includes appraisal performance requirements that are an inherent part of this section.
(continued) 60
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49 CFR 24.103 Criteria for Appraisals(URA “requirements” v. USPAP “standards”)
Part 24, Appendix A
§ 24.103 Criteria for appraisals.
The term “Federal and federally‐assisted program or project” is used to better identify the type of appraisal practices that are to be referenced and to differentiate them from the private sector, especially mortgage lending, appraisal practice.
(continued) 61
The Federal Regulations: 49 CFR Part 24
§ 24.2 Definitions and acronyms.(27) Uneconomic remnant. The term uneconomic remnantmeans a parcel of real property in which the owner is left with an interest after the partial acquisition of the owner's property, and which the Agency has determined has little or no value or utility to the owner.
(33) Waiver valuation. The term waiver valuationmeans the valuation process used and the product produced when the Agency determines that an appraisal is not required, pursuant to § 24.102(c)(2) appraisal waiver provisions.
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Contrasts: 49 CFR & USPAP• Government acquisition of private property in support of public programs
• Comply with Constitution:
• “Just Compensation” • “Fair Market Value” appraisal
• Various private sector needs but dominated by mortgage lending
• Provide order and control of the appraisal profession
• Avoid confusing and misleading appraisal users and protect appraisers
63
Contrasts: 49CFR & USPAP
• Fair treatment of owner(s) and taxpayer
• Based on the assumption that the acquiring agency is a knowledgeable user or appraisal services
• Set nationwide standards
• Appraisal user may have limited or no appraisal knowledge
64
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Contrasts: 49CFR & USPAP
• Agency knows what is needed and why
• Appraiser may need information and guidance to comply with applicable laws, regulations, policies and procedures
• Appraiser determines what is needed and sets the appraisal parameters
65
Consistencies: 49 CFR & USPAP
• A written statement Independently and impartially prepared by a qualified appraiser setting forth an opinion of defined value of an adequately described property as of a specific date supported by the presentation and analysis of relevant market information
• Standard 2 – Reporting
• Ethics Rule
• Standard 1, Standards Rule 1
• Standards Rule 1 and 2
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MARKET VALUE“The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby…
67
Market Value• Buyer and seller are typically motivated;• Both parties are well informed or well advised, and acting in
what they consider their best interests;• A reasonable time is allowed for exposure in the open market;• Payment is made in terms of cash in U.S. dollars or in terms of
financial arrangements comparable thereto; and• The price represents the normal consideration for the property
sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.
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Appraisal:“…a written statement independently and impartially prepared by a qualified appraiser setting forth an opinion of defined value of an adequately described property as of a specific date, supported by the presentation and analysis of relevant market information.” 49 CFR 24.2, Definitions
69
TEST FOR HIGHEST AND BEST USELEGALLY PHYSICALLY ECONOMICALLY
F E A S I B L E
MAXIMUM PROFITABILITY
HIGHEST AND BEST USE70
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Vacant and As Improved• Land is considered as if vacant and available for its highest and best use
• Improvements are considered as they contribute value above the value of the land
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General Appraisal Requirements• Owner accompaniment• Waiver Valuation• Scope of Work• Compliant Appraisal• Disregard project influence • Qualifications• Update offer of just compensation• Uneconomic remnant• Fair rental• Conflict of Interest• Tenant‐owned improvements
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General Appraisal Requirements• Owner Accompaniment:
– Review plans and prepare a checklist of questions in advance
– Confirm the 5‐year sales history from the title report
– Use the opportunity to develop goodwill and credibility for the Agency
73
Appraisal Requirements49 CFR 24.103(a): Compliant Appraisal
1. Meets definition and accepted practices2. Adequate description of property
a) Appraised “Before” and any Remaining propertyb) Identification of personal propertyc) Title information and statement of encumbrancesd) Locatione) Zoning, present use f) Highest and Best Use analysisg) 5‐Year sales history 74
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Appraisal Requirements49 CFR 24.103(a): Compliant Appraisal
3. Relevant and reliable approaches to valueA. SalesB. IncomeC. Cost
4. Reconciliation of approaches– Sufficient to support opinion of value
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Appraisal Requirements49 CFR 24.103(a): Compliant Appraisal
5. Description of comparable sales– Include description of all relevant physical, legal
and economic factors: A. Parties to the transactionB. Source and method of financingC. Verification of sale by party of the transaction
6. Statement of Value– Acquisition– Damages/benefits to the remainder, if any 76
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Appraisal Requirements49 CFR 24.103(a): Compliant Appraisal
7. Effective date of valuation, date, signature and certification of appraiser
77
General Appraisal Requirements49 CFR 24.103
(b) Disregard project influence(c) Owner retention(d) Qualifications
“…use only those appraisers determined by the Agency to be qualified.”
How do we define “Qualified Appraiser”?
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USPAP “Competency Rule”
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Competency requires:
1. the ability to properly identify the problem to be
addressed; and
2. the knowledge and experience to complete the assignment competently; and
3. recognition of, and compliance with, laws and regulations that apply to the appraiser or to the assignment.
In all cases, the appraiser must perform competently when completing the assignment.
USPAP “Competency Rule”
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An appraiser must: (1) be competent to perform the assignment;
(2) acquire the necessary competency to perform the assignment; or
(3) decline or withdraw from the assignment.
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UNECONOMIC REMNANTS
• §24.102 (k) “If the acquisition of only a portion of a property would leave the owner with an uneconomic remnant, the Agency shall offer to acquire the uneconomic remnant along with the portion of the property needed for the project.”
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UNECONOMIC REMNANTS
• §24.2 (a) (27) “The term uneconomic remnant means a parcel of real property in which the owner is left with an interest after the partial acquisition of the owner’s property and which the Agency has determined has little or no value or utility to the owner.”
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Uneconomic Remnants• Property remnant with little or no value or
utility to the owner 49 CFR 24.2(a)(27)• Agency must offer to acquire uneconomic
remnants 49 CFR 24.102(k)
Remainder
Acquisition
84
Tenant-Owned ImprovementsIdentify property not owned by the land
owner
49 CFR 24.102(c)(3)
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REVIEWAt the end of this lesson you will be able to: • Identify the key elements of the valuation
process
• What is a waiver valuation?
• Define an appraisal based on 49 CFR 24.2(a)(3)
• Explain the requirements an appraiser must adhere to when preparing highway appraisals
• Define an uneconomic remnant • What is the Agency’s obligation in relation to uneconomic remnants?
REVIEW
86
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Session 4: Appraisal Complexity Analysis and Appraisal Scope of Work
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You will be able to:• Explain why the appraisal scope of work is important
• Identify the contents of an appraisal scope of work
• Explain the Agency’s role in preparing the scope of work
Learning Outcomes
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APPRAISAL SCOPE OF WORKAppraisal Complexity Analysis:• Project number• Parcel numbers• Property owners names• Property types• Property descriptions (size of acquisition & remainders)
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APPRAISAL SCOPE OF WORKAppraisal Complexity Analysis (cont):• Impact considerations
– improvements–proximity issues– severance issues– loss of parking
• Appraisal report requirements90
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Appraisal Complexity Analysis
APPRAISAL SCOPE OF WORK
91
USPAP Standard 1
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STANDARD 1: REAL PROPERTY APPRAISAL, DEVELOPMENT
In developing a real property appraisal, an appraiser must identify the problem to be solved, determinethe scope of work necessary to solve the problem, and correctly complete research and analyses necessaryto produce a credible appraisal.
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USPAP “Scope of Work Rule”
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SCOPE OF WORK RULE:For each appraisal and appraisal review assignment, an appraiser must:
1. identify the problem to be solved;2. determine and perform the scope of work necessary to develop credible assignment results; and3. disclose the scope of work in the report.
(continued)
USPAP “Scope of Work Rule”
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SCOPE OF WORK RULE:
An appraiser must properly identify the problem to be solved in order to determine the appropriatescope of work.
The appraiser must be prepared to demonstrate that the scope of work is sufficient to produce credible assignment results.
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Appraisal Scope of WorkMust at a minimum:1. Provide an appraisal meeting the
agency’s definition of an appraisal2. Afford the property owner the
opportunity to accompany the appraiser on the inspection on the property
3. Perform an inspection of the subject property 95
Appraisal Scope of Work4. Include a sketch of the property and provide
location and dimensions of any improvements and include adequate photographs of subject property and comparable sales and provide location maps of sales
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5. Items required in Appraisal Report• Estate to be appraised• Value being appraised• Contamination ?• Date of valuation• Date of report• Realty/Personalty• Encumbrances, if any
• Title information• Location• Zoning• Present use• Highest and Best Use• At least 5 years sale history of the property
Appraisal Scope of Work
97
Appraisal Scope of Work6. If highest and best use is in question or
different from the existing use, provide an appropriate analysis identifying the market‐based highest and best use
7. Present and analyze relevant market information
98
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Appraisal Scope of Work8. Report his or her analysis, opinions, and
conclusions in the appraisal report
9. Disregard any changes in fair market value of the real property caused by the project
99
Appraisal Scope of WorkAdditional Requirements:• Intended Use• Intended User• Definition of Market Fair Value
100
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Appraisal Scope of WorkIntended Use:• To estimate the fair market value of the property, as of the specified date of valuation
• To support the acquisition of the property rights specified for a Federal or Federally‐Assisted project
101
Appraisal Scope of WorkIntended User:• Primarily the acquiring agency but its funding partners may review the appraisal as part of their program oversight activities
102
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Appraisal Scope of WorkDefinition of Fair Market Value:Determined by State law, but includes the following:
1. Buyer and seller typically motivated2. Both parties are well informed and well advised, each
acting in what he or she considers his or her own best interest
3. Reasonable time is allowed for exposure in open market4. Payment is made in terms of cash in U. S. dollars or in
terms of financial arrangement comparable thereto103
Appraisal Scope of WorkDefinition of Fair Market Value:
5. The price presents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale
104
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Appraisal Scope of WorkCertification:The required certification should be in the State DOT’s FHWA‐approved Right‐of‐Way or Appraisal Manual
105
Appraisal Scope of WorkAssumption and Limiting Conditions:• The data search requirements and parameters required for the project
• Identification of technology used to analyze the data, including approaches value
106
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Questions and Answers
http://www.fhwa.dot.gov/realestate/sow4.htm
107
• Why is the appraisal scope of work important?• What are the contents of an appraisal scope of work?
• What is the Agency’s role in preparing the scope of work?
REVIEW
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Session 5: Project Development
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You will be able to:• Describe the appraiser’s role and how the appraiser may assist the other disciplines involved in project development
• State the importance of preparing effective right‐of‐way cost estimates
• Identify post appraisal activities
Learning Outcomes
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APPRAISAL CONSIDERATIONS IN PROJECT DEVELOPMENT
• Cost Estimating– Route Selection– Valuation– Cost/Benefit Analysis
111
APPRAISAL CONSIDERATIONS IN PROJECT DEVELOPMENT
• Route Selection– Improvements– Types of land– Litigious areas– Complex properties– Contaminated properties
112
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APPRAISAL CONSIDERATIONS IN PROJECT DEVELOPMENT
• Valuation– Access and access control– Proximity– Size of taking– Temporary easements– Ownership
113
APPRAISAL CONSIDERATIONS IN PROJECT DEVELOPMENT
• Cost Benefit Analysis– Cost of alternative– Benefit of alternative– Impact measured by analysis of data
114
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APPRAISAL CONSIDERATIONS IN PROJECT DEVELOPMENT
• Importance of Reliable Cost Estimates– Impacts participation percentage– Impacts future project budgets
115
APPRAISAL CONSIDERATIONS IN PROJECT DEVELOPMENT
• Cost Estimate Factors to Consider:– Sales data and listings–Appraisal reports–Historic project costs– Improvements– Fencing–Damages
116
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PROJECT AND PRE‐APPRAISAL ACTIVITIES
• Project Coordination Meeting–Project activity coordination– Environmental commitments involving right of way
–Right‐of‐way certification date–Project construction date–Milestones and completion dates 117
PROJECT AND PRE‐APPRAISAL ACTIVITIES
• Project Coordination Meetings Promote:– Early involvement–Communication– Early identification and resolution of issues
– Team Approach– Timely Project Delivery
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POST APPRAISAL ACTIVITIES• Appraisal Review
– Regulatory Compliance Requirements• Appraiser/Review Advisory Role
– Negotiation– Settlement/Probate Hearings – Relocation assistance
• Litigation– Circuit Court Appraisal/Appraisal Review
• Property Management119
• What is the appraiser’s role and how may he/she assist the other disciplines involved in project development?
• Why is it important to prepare effective right‐of‐way cost estimates?
• What are the post appraisal activities?
REVIEW
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Session 6: Appraisal Review
121
At the end of this lesson you will be able to: • Explain how an appraisal for eminent domain is different than for lending or insurance purposes
• Explain the purpose of an appraisal review• Explain the review appraiser’s options• Explain the review appraiser’s certification • Identify common review problems
Learning Outcomes
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Appraisal for Eminent Domain• Are different than those typically done for lending or insurance purposes:• Appraisers typically value the fee simple interest of the
property
• The appraiser may be asked to value easements or leaseholds that may be attached to the property.
• The owner of the subject property must be offered the opportunity to accompany the appraiser during the inspection of the property.
123
• Emerging trends and observations• State DOTs• Comments heard at professional
association meetings• 49CFR §24.104
“The Agency shall have an appraisal review process”
APPRAISAL REVIEW
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“A qualified review appraiser shall examine the presentation and analysis of market information in all appraisals…”• The level of review analysis depends on the complexity of the appraisal problem
• Appraisal review is NOT a “one size fits all” concept
APPRAISAL REVIEW
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Purpose of an Appraisal Review“…examine the presentation and analysis of market information in all appraisals to assure that they meet the definition of appraisal found in 49 CFR 24.2(a)(3), appraisal requirements found in 49 CFR 24.103…”
49 CFR 24.104(a)
• Critically examines appraisal work prepared by others
• Brings consistency to the project 126
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Appraisal Review • Independent analysis • Prepare a written report which must include a signed certification.
• Meets SOW, agency specifications, State and Federal requirements.
• Follows acceptable principles and techniques.• Refers to or contains data to explain, substantiate, and document conclusions.
127
Options available to the review appraiser are:• “Recommend” the appraisal as the basis for the amount
believed to be just compensation
• “Accept” the report as meeting all requirements, but not selected as recommended
• “Not Accept” the report
“Rejecting” the report is no longer acceptable
APPRAISAL REVIEW
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Review Appraiser’s Responsibilities
• Examine all appraisals to assure they meet applicable appraisal requirements; if necessary, seek corrections or revisions
129
Review Appraiser’s Actions• If unable to approve appraisal and a new appraisal is not practical, the review appraiser may develop documentation to support an approved or recommended value
130
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Review Appraiser’s Certification
• The certification sets forth in writing the value (including damages and benefits), the report(s) reviewed, and the basis for approval
131
More on Certification• Appendix A, Subpart B, §24.104
For low value properties with simple appraisals, the review appraiser’s signed endorsement of the appraisal report can satisfy the requirement for the review appraiser’s signed report & certification.
………………………………………….BUT>>>>132
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More on Certification• Unless the property has low value, the appraisal is simple, and the agency allows the signed endorsement (see previous slide), the review appraiser’s written report must be detailed as per 24.104(c).
[Although not required by Federal regulation, USPAP Standard 3 is a useful guide for a detailed reviewer’s report.]
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• 49 CFR 24 Appendix A ‐ the review appraiser should act as a 2 way bridge between the Agency and the appraiser
• If necessary, the review appraiser may, as part of the review, present and analyze market information to support a recommended value.
• The reviewer is required to prepare and sign a certification that states the parameters of the review.
• If authorized, the reviewer may estimate the amount believed to be just compensation for the proposed acquisition.
APPRAISAL REVIEW
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•Review appraisers should be involved early in project development
•Reviewer appraisers can provide consulting and advisory services to their agency
APPRAISAL REVIEW
135
Common Review ProblemsThe single biggest problem found in reviewing or auditing review appraisers’ reports is lack of discussion of the reviewer’s findings and conclusions about the appraisal(s) reviewed. The review appraiser’s report is NOT a “rubber stamp”!
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Common Review Problems• Unresolved issues with realty vs. personalty (e.g., fixtures)
• Poor/inadequate identification of uneconomic remnants—this is the reviewer’s responsibility
• Signing off on flawed reports—math errors, comp sales that aren’t, others
137
Common Review Problems
• Valuation consistency: “One of the responsibilities of the review appraiser is to ensure that closely similar properties on a project have like unit values placed on them or be prepared to explain why.”*
*Quote is from NHI Course 14126, Appraisal and Appraisal Review for Federal‐aid Highway Programs
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Common Review Problems• Non‐compensable items: Review appraiser must be clear on
items which are compensable under State law. One problem area that can come up is loss of business. If not compensable under State law, cannot be a damage item in just compensation.
• Failure to return appraisals for corrections or additional documentation when the appraisal doesn’t meet the DOT’s standards.
139
Other Issues• Property owner appraisals: An Appraisal Review Report should also be written on any appraisals submitted by the property owner for review. Certainly, if the property owner appraisal is more persuasive than those in the agency’s file the review appraiser can approve that amount.
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The Bottom Line
The reviewer must be certain that the information provided is sufficient for the client and intended users to adequately understand the rationale for the reviewer’s opinion and conclusions.
141
• How is an appraisal for eminent domain different than for lending or insurance purposes?
• What is the purpose of an appraisal review?• What are the review appraiser’s options?• Explain the review appraiser’s certification• What are some common review problems?
REVIEW
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Session 7: The Yellow Book
143
• Explain the Yellow Book• Determine when it is used on highway projects
Learning Outcomes
144
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THE YELLOW BOOK
• Established 11/27/69• By invitation of the Attorney General• Chaired by the Assistant Attorney General for
Environment and Natural resources• Goal: To assure that appraisal standards
developed for land acquisitions are uniform, fair, and efficient.
Interagency Land Acquisition Conference
145
THE YELLOW BOOK
• Developed , promulgated and adopted the Yellow Book
• Appraisal Institute contributed editorial and production assistance
• Appraisal Institute has no responsibility for its content
Interagency Land Acquisition Conference
146
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THE YELLOW BOOK
• 1st published in 1971• Revised in 1992• Current edition is dated 2000• No plans to revise or update
Uniform Appraisal Standards for Federal Land Acquisitions
147
THE YELLOW BOOK
• To promote uniformity in the appraisal of real property among the various agencies acquiring property on behalf of the US
• Assumes full compliance with the pertinent provisions of the Uniform Act
Purpose:
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THE YELLOW BOOK
• Prepared with the recognition that the vast majority of Federal land acquisitions are accomplished by voluntary means
• Intended to ensure that appraisals are made with the utmost objectivity, accuracy, and thoroughness
Purpose:
149
THE YELLOW BOOK
• Data documentation and appraisal reporting standards
• Derived from generally accepted professional appraisal development and reporting standards
• Legal basis for appraisal standards for Federal land acquisitions
• Based on Federal case law and the US Constitution
Scope:
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THE YELLOW BOOK
• Sets standards for appraisal review• Derived from generally accepted appraisal review
standards as well and from various Federal regulations
• Sets standards for unique and miscellaneous appraisal problems
Scope:
151
THE YELLOW BOOK
• It is the US’ policy to impartially protect the interests of those condemned
• Just Compensation
Policy:
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THE YELLOW BOOK & USPAP
• Purpose: To promote and maintain a high level of public trust in appraisal practice by establishing requirements for appraiser.
• Originally written in 1986 – 1987 by an appraisal professional Ad Hoc Committee and was donated to the Appraisal Foundation in 1987.
USPAP Background
153
THE YELLOW BOOK & USPAP
• The Financial Institutions Reform Recovery and Enforcement Act (FIRREA) of 1989 cites USPAP as the standard to be enforced by state appraiser regulatory agencies.
• USPAP compliance is also required by professional appraiser associations, client groups and by dozens of Federal, state and local agencies
• Currently USPAP is updated every two years
USPAP Background
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THE YELLOW BOOK & USPAP
• The UASFLA standard are intended to be compatible with the standards and practices of both the appraisal industry and USPAP.
• It is acknowledged that it may be necessary to invoke Jurisdictional Exception, in certain instances, so as to conform “these Standards” with USPAP.
Compatibility
155
THE YELLOW BOOK & USPAP
• All Yellow Book appraisals must invoke Jurisdictional Exception– Exposure Time and Marketing Time– Project Influence
Compatibility
156
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THE YELLOW BOOK
Appraisal Format IntroductionTitle Page Letter of TransmittalPhotographs 10 year sales historyComp photos & maps
Specific Requirements
157
THE YELLOW BOOK
Ranges of value are not acceptable: “The appraiser shall also state his or her final estimate of value of all the property under appraisal as a single amount…”
Specific Requirements
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THE YELLOW BOOK
• “Ordinarily, the highest and best use for property sought to be condemned is the use to which it is subjected at the time of the taking.”.
• “This is true because economic demands normally result in an owner’s putting his land to the most advantageous use”.
Highest and Best Use
159
THE YELLOW BOOK
• “In the conduct of appraisals for Federal land acquisition purposes; there is a presumption that the existing use of land is its highest and best use.”
• “Therefore, when there is a claim that the highest and best use of a property is something other than the property’s existing use, the burden of providing that different highest and best use is on the party making the claim.”
Highest and Best Use
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THE YELLOW BOOK
“A proposed highest and best use requires a showing of reasonably probability that the land as both physically adaptable for such use andthat there is a need or demand for such use in the reasonably near future, physical adaptability alone is insufficient.”
Highest and Best Use
161
• What is the Yellow Book? • When is it used?
REVIEW
162
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Session 8: Resources
163
Resources• Office of Real Estate Services:
http://www.fhwa.dot.gov/real_estate/• Uniform Act Law and Regulations:
http://www.fhwa.dot.gov/real_estate/practitioners/uniform_act/legs_regs/
• Uniform Act FAQs: http://www.fhwa.dot.gov/real_estate/practitioners/uniform_act/policy_and_guidance/uafaqs.cfm
• FHWA Brochure—Your Rights and Benefits As A Displaced Person: http://www.fhwa.dot.gov/real_estate/publications/rights/
164
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1. “Federal‐aid Essentials for Local Public Agencies”
Link: http://www.fhwa.dot.gov/federal‐aidessentials/index.cfm
This information‐sharing website offers a central online library of informational videos and resources, designed specifically for local public agencies. Each video addresses a single topic—condensing the complex regulations and requirements of the Federal‐aid Highway Program into easy‐to‐understand concepts and illustrated examples.
Resources for Appraisal/Appraisal Review and other Federal and Federal‐aid Realty Issues
165
2. “Real Estate Acquisition Guide for Local Public Agencies”Link: http://www.fhwa.dot.gov/real_estate/practitioners/uniform_act/program_administration/lpa_guide/
(Excellent resource with good information on all Realty Program areas.)
Resources for Appraisal/Appraisal Review and other Federal and Federal‐aid Realty Issues
166
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3. “Project Development Guide” (PDG)
Link: http://www.fhwa.dot.gov/real_estate/practitioners/right‐of‐way/corridor_management/pdg/
(Another excellent resource with good information on all Realty Program areas. One great feature is that it contains specific references to the applicable regulatory provisions that apply to a given topic).
Resources for Appraisal/Appraisal Review and other Federal and Federal‐aid Realty Issues
167
4. “Guide for Preparing an Appraisal Scope of Work” (2005)Link: http://www.fhwa.dot.gov/real_estate/practitioners/uniform_act/property_valuation/sow4.cfm
(This two‐page document outlines all the required elements that should be included in any appraisal report prepared on behalf of an acquiring agency in connection with a Federal‐aid Highway Project.).
Resources for Appraisal/Appraisal Review and other Federal and Federal‐aid Realty Issues
168
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Uniform Act Training
Appraisal and Relocation Workshop
“All you want to know”
March 25, 2016
9 – General Relocation Requirements
169
NHI Relocation Courses
• NHI 141029 Basic Relocation under the Uniform Act
• NHI 141030 Advanced Relocation under the Uniform Act
• NHI 141031 Business Relocation under the Uniform Act
170
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Learning Outcomes
At the end of the session you will be able to:• State the ideal time to conduct
relocation planning• Explain the importance of
identifying of Housing of Last Resort early
• Explain advisory services
171
Learning Outcomes
You will also be able to:• Name examples of possible
resources for relocation assistance• Identify the 3 required notices• State the required delivery method
for the notices
172
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Relocation Assistance Flowchart
Plan Project Project ApprovedInform
Persons to be Displaced
Interview Persons to
be Displaced
Work with Persons to
be Displaced
Person Chooses
Replacement Property and
Moves
Process Claims and
Make Payments
Follow-up
17
General Relocation Requirements
• The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as Amended (Uniform Act)
• 49 CFR Part 24 – The Uniform Act Regulation
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General Definition: Displaced Person• The term person means any individual,
family, partnership, corporation or association. (49 CFR 24.2(a)(21))
• A displaced person generally is any person who moves from the real property or moves his or her personal property from the real property. (49 CFR 24.2(a)(9))
175
General Relocation Requirements
General Relocation Requirements
• Relocation Planning (§24.205(a))• Advisory Services (§24.205(c))• Relocation Notices (§24.203)• Availability of Comparable
Replacement Dwellings (§24.204)• Claims for Relocation Payments
(§24.207)
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General Relocation Requirements cont.
• Illegal Aliens (§24.208)• Relocation Payments not considered as
income (49 CFR 24.209)• No Duplication of Payments (49 CFR 24.3)• Assurances, Monitoring and Corrective
Action (49 CFR 24.4)• Compliance with other laws and regulations
(49 CFR 24.8)
• Appeals (49 CFR 24.10)
177
Important Aspects
178
Planning
Notices
Payments
Advisory Services
• Who will be displaced?• What replacements are available?• Special problems.
• General information notice• Notice of relocation eligibility• 90 day notice
• Replacement housing• Moving cost• Reestablishment cost
ResidentialNon-Residential
• Explanation of benefits and or services
• Personal interview• Needs of those being
displaced
• Referral to available property
• Referral to other services
• Transportation
4 Key Steps in Relocation
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Relocation Planning• Begins early in the development of a project -
often part of NEPA process
• Recognizes problems associated with displacement
• Develops solutions to minimize the adverse impacts of displacement
49 CFR 24.205(a)
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Relocation Planning
Relocation Assistance Program Goal:• Minimize impacts to displaced persons• Expedite program or project completion
180
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Relocation PlanningSurvey
1. Estimate the number of households2. Estimate comparable replacement
dwellings available3. Estimate the number of businesses4. Estimate business replacement sites
available5. Identify special relocation services
needed
181
(49 CFR 24.205(a))
Survey1. Estimate the number of households2. Estimate comparable replacement dwellings
available3. Estimate the number of businesses4. Estimate business replacement sites
available5. Identify special relocation services needed
Housing of Last Resort
182
Relocation Planning
(49 CFR 24.205(a))
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Advisory Services• Explanation of relocation services and payments
• Explanation of relocation eligibility requirements
• Determination of needs and preferences of persons to be displaced through personal interview
• Effort to meet identified needs of displaced persons
• Provision of appropriate services
49 CFR 24.205(c)
Relocation Payments and ServicesResidential:Moving costs (based on
fixed amount or actual cost).
Advisory services.Replacement Housing
Benefits.
Nonresidential:Moving costs (fixed or actual)
Including Searching Expense.
Business reestablishment costs.
Advisory services.
Fixed or Actual Moving
Costs
Advisory Services
Fixed or Actual Moving
Costs
Advisory Services
Business Reestablishment
Costs
Replacement Housing Benefits
Note: Persons not lawfully present in the US are not eligible for relocation payments or advisory services. 49 CFR 24.208 184
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Advisory Services
185
No other assistance, not even relocation payments, is more important to persons being displaced.
Advisory Services
• Persons occupying real property to be acquired
• Persons occupying real property adjacent to the acquisition
• Persons who move or move personal property from real property not being acquired for the project.
• Persons who move into property after acquisition
186
Who is eligible?
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Advisory Services—Businesses
Relocation needs & preferencesA.Site requirements, lease terms, etc.B.Need for outside specialistsC.Identify realty/personaltyD.Estimated time required to moveE.Estimate availability of replacement
sites
187
(§24.205(c)(2)(i))
Advisory Services--Businesses
F. Identify advance relocation payments required
G.Provide current & continuing information on available sites
H.Minimize hardship with counselingI. Offer information on other
Federal/State programs
188
(§24.205(c)(2)(i))
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Advisory Services--Residents
Relocation needs & preferencesA.Provide current & continuing
information on available sitesB. Inform of specific comparable in
writingC.Inspect for applicable standardsD.Reasonable opportunities for
minorities to relocateE.Offer transportation
189
(§24.205(c)(2)(ii))
Advisory Services--Residents
F. Advise of government housing assistance requirements
G.Minimize hardship with counseling/advice
H.Provide information on Federal/State housing programs/assistance
190
(§24.205(c)(2)(ii))
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Resource Center Realty Team
Case Study
191
Advisory Services
Relocation Notices
• The General Information Notice
• The Notice of Relocation Eligibility
• The Ninety-Day Notice to Vacate
• The Notice of Intent to Acquire (optional)
192
(49 CFR 24.203)
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Relocation Notices
• Foreign language may be appropriate
• Delivered in person or certified mail, return receipt requested
• Contain name and telephone number of contact person 49 CFR 24.5
• In writing, easily understood language
General Information Notice
• Given anytime – typically early
• Conveys information about the relocation program, including right to appeal
49 CFR 24.203(a)
• Format: brochure or letter that is general in nature
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Notice of Relocation Eligibility
• Delivered at initiation of negotiations (ION) or shortly thereafter
• Establishes qualification for relocation assistance and may set amount
49 CFR 24.203(b)
• Format: letter that is hand-delivered or sent by certified mail
Ninety-Day Notice
• Format: letter that is hand-delivered or sent by certified mail
• Delivered at or subsequent to ION or after property acquisition
• Assures displaced person minimum of 90 days to move
• For residential occupant, a comparable must be offered 49 CFR 24.203(c)
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Ninety-Day Notice
• For residential occupant, comparable must be offered to begin the 90 days
• Emergency situations may require less than 90 day advance notice
Two approaches for content• Specific vacate date or• 90-day notice with
additional 30-day notice
49 CFR 24.203(c)
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Claims for Relocation Payments
a) Documentationb) Expeditious paymentsc) Advanced paymentsd) Time for filing
199
(49 CFR 24.207)
Claims for Relocation Payments
a) Documentationb) Expeditious paymentsc) Advanced paymentsd) Time for filinge) Notice of denial of claimf) No waiver of relocation assistanceg) Expenditure of payments
200
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Documentation of Relocation Activities
• Verifies that Relocation Agent has conducted activities in compliance with laws and regulations
• Provides accurate record of communications with displaced person
• Is completed within reasonable time after each contact
• Provides supporting documentation for all relocation payments
201
49 CFR 24.949 CFR 24.207(a)
202
Review• What is the goal of relocation
planning?• What is the ideal time to
conduct relocation planning? • Why is it important to identify
of Housing of Last Resort early?
• What are advisory services?
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203
Review (cont.)• What advisory services should be
provided to a displaced business?• What advisory services should be
provided to a displaced resident?• What should an agency do with an
appeal?
• What are some examples of possible resources for relocation assistance?
• What are the three required notices?• What is the required delivery method
for the notices?
204
Review (cont.)
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Resources• Office of Real Estate Services:
http://www.fhwa.dot.gov/real_estate/• Uniform Act Law and Regulations:
http://www.fhwa.dot.gov/real_estate/practitioners/uniform_act/legs_regs/
• Uniform Act FAQs: http://www.fhwa.dot.gov/real_estate/practitioners/uniform_act/policy_and_guidance/uafaqs.cfm
• FHWA Brochure—Your Rights and Benefits As A Displaced Person: http://www.fhwa.dot.gov/real_estate/publications/rights/
205
Marshall Wainright, Lead Realty SpecialistFHWA Resource Center61 Forsyth St., SW, Suite 17T26Atlanta, GA 30303Phone: 404-895-6158Email: [email protected]
Appraisal & Relocation Workshop
206
Module 10: Replacement Housing Payment Eligibility
FHWA Resourcer Center: Appraisal/Relocation Under the Uniform Act Workshop
2016
Alaska 104
Learning Outcomes
207
At the end of the module you will be able to:• Group categories of displaced persons with
their respective replacement housing payments
• List the decent, safe and sanitary standards• Assess comparable replacement housing
Resource Center Realty Team
4 Categories of Displaced Persons
208
• 90-Day Owner-Occupant
• 90-Day Tenant and Short-Term Owner-Occupant
• Less than 90-Day Occupant
• Persons ineligible for replacement housing payments (RHP’s)
FHWA Resourcer Center: Appraisal/Relocation Under the Uniform Act Workshop
2016
Alaska 105
Replacement Housing Payments90-Day Owner-Occupant
209
• Own and occupy displacement dwelling 90 days prior to initiation of negotiations
• Price differential• Mortgage interest differential• Incidental expenses
Cannotexceed$31,000
OR• Rental assistance cannot exceed computed
price differential payment
49 CFR 24.401
Replacement Housing Payments90-Day Tenant
210
• Rent and occupy displacement dwelling 90 days prior to initiation of negotiations
• Rental assistance payment Cannotexceed$7,200
OR• Downpayment assistance cannot exceed computed
price differential payment
49 CFR 24.401
FHWA Resourcer Center: Appraisal/Relocation Under the Uniform Act Workshop
2016
Alaska 106
Replacement Housing PaymentsLess Than 90-Day Occupants
21149 CFR 24.40249 CFR 24.404(c)(3)
• Rent or own and occupy displacement dwelling less than 90 days immediately prior to initiation of negotiations
• Rental assistance Payable under housing of last resort
OR
• Downpayment assistance Payable under housing of last resort
Persons Ineligible for Replacement Housing Payments (RHPs)
212
• Aliens not lawfully present in the U.S.49 CFR 24.2(a)(9)(ii)(L)
• Seasonal residents49 CFR 24.2(a)(10); 24.401; 24.402
• Persons who move prior to ION49 CFR 24.2(a)(9)(ii)(A)
• Persons who move onto the property after the Agency’s acquisition
49 CFR24.2(a)(9)(ii)(B)
• Unlawful occupants49 CFR 24.2(a)(9)(ii)(K)
FHWA Resourcer Center: Appraisal/Relocation Under the Uniform Act Workshop
2016
Alaska 107
Common Elements of All Replacement Housing Payments (RHPs)
213
• Occupancy of dwelling • Replacement housing must be decent,
safe and sanitary (DSS)• Time limit for purchasing or renting
replacement dwelling• Time limit for filing claim• Payment limited to actual claim
214
Comparable Replacement Housing Standards Video
FHWA Resourcer Center: Appraisal/Relocation Under the Uniform Act Workshop
2016
Alaska 108
Decent, Safe, and Sanitary
215
• Replacement dwelling must meet certain standards
• Standards refer to physical condition of replacement property
• Generally, a dwelling which meets local housing and occupancy codes will be decent, safe and sanitary (DSS)
Decent, Safe, and Sanitary
216
• Structurally sound
• Weather tight• In good repair
49 CFR 24.2(a)(8)(i)
FHWA Resourcer Center: Appraisal/Relocation Under the Uniform Act Workshop
2016
Alaska 109
Decent, Safe, and Sanitary (cont.)
217
Safe electrical wiring system
49 CFR 24.2(a)(8)(ii)
Decent, Safe, and Sanitary (cont.)
218
• Heating system capable of sustaining healthful temperature (of approximately 70 degrees)49 CFR 24.2(a)(8)(iii)
FHWA Resourcer Center: Appraisal/Relocation Under the Uniform Act Workshop
2016
Alaska 110
Decent, Safe, and Sanitary (cont.)
219
Be adequate in size
49 CFR 24.2(a)(8)(iv)
Decent, Safe, and Sanitary (cont.)
220
Separate, well-lighted and ventilated bathroom that … contains a sink, bathtub or shower stall, and a toilet
49 CFR 24.2(a)(8)(v)
FHWA Resourcer Center: Appraisal/Relocation Under the Uniform Act Workshop
2016
Alaska 111
Decent, Safe, and Sanitary (cont.)
221
Kitchen area that contains a … sink, .. and adequate space and utility service connections for a stove and refrigerator49 CFR 24.2(a)(8)(v)
Decent, Safe, and Sanitary (cont.)
222
• Contains unobstructed egress
49 CFR 24.2(a)(8)(vi)
• Barrier-free to persons with disabilities
49 CFR 24.2(a)(8)(vii)
FHWA Resourcer Center: Appraisal/Relocation Under the Uniform Act Workshop
2016
Alaska 112
Comparable Replacement Housing
223
• Displacing Agency must offer at least one comparable replacement dwelling
• Comparable replacement dwelling forms the basis of the computation of the replacement housing payment (RHP)
Comparable Replacement Housing (cont.)
224
• Decent, safe, and sanitary 49 CFR 24.2(a)(6)(i)• Functionally equivalent 49 CFR 24.2(a)(6)(ii)
FHWA Resourcer Center: Appraisal/Relocation Under the Uniform Act Workshop
2016
Alaska 113
Comparable Replacement Housing (cont.)
225
Be adequate in size
49 CFR 24.2(a)(8)(iv)
Comparable Replacement Housing (cont.)
226
Not subject to adverse environmental conditions
49 CFR 24.2(a)(6)(iv)
FHWA Resourcer Center: Appraisal/Relocation Under the Uniform Act Workshop
2016
Alaska 114
Comparable Replacement Housing (cont.)
227
Location not generally less desirable
49 CFR 24.2(a)(6)(v)
Comparable Replacement Housing (cont.)
228
Site typical in size – needs no special improvements
49 CFR 24.2(a)(6)(vi)
FHWA Resourcer Center: Appraisal/Relocation Under the Uniform Act Workshop
2016
Alaska 115
Comparable Replacement Housing (cont.)
229
Currently available on the private market
49 CFR 24.2(a)(6)(vii)
Comparable Replacement Housing (cont.)
230
• Within the financial means of the displaced person
49 CFR 24.2(a)(6)(viii)
• A dwelling that may reflect similar government housing assistance
49 CFR 24.2(a)(6)(ix)
FHWA Resourcer Center: Appraisal/Relocation Under the Uniform Act Workshop
2016
Alaska 116
Case StudyWho Is Eligible For What?
231
• Group four classes of displaced persons with their respective replacement housing payments
• List four decent, safe and sanitary standards
• Assess comparable replacement housing
Review Learning Outcomes
232
FHWA Resourcer Center: Appraisal/Relocation Under the Uniform Act Workshop
2016
Alaska 117
Questions??
233
Replacement Housing Payments for 90-Day Owner-Occupants
234
Uniform Act Training
Appraisal and Relocation Workshop
“All you want to know”
March 25, 2016
FHWA Resourcer Center: Appraisal/Relocation Under the Uniform Act Workshop
2016
Alaska 118
Learning Outcomes
235
At the end of the module you will be able to:• Explain the components of the Replacement
Housing Payment for displaced 90-day homeowner-occupants
• Compute a price differential payment• Assess the impact of a carve-out or an
uneconomic remnant on a price differential calculation
Learning Outcomes
236
You will also be able to:• Explain the goal of the “buydown”
process• Determine whether or not incidental
expenses are reimbursable• Compute appropriate price differential
payment based on changing facts
FHWA Resourcer Center: Appraisal/Relocation Under the Uniform Act Workshop
2016
Alaska 119
90-Day Replacement Housing Payment Components
237
1. Price Differential (49 CFR 24.401(c))2. Increased Mortgage Interest Cost
Payment, aka MIDP or MID (49 CFR 24.401(d))
3. Incidental Expenses (49 CFR 24.401(e))
Price Differential—Example Comparison Grid
238
FHWA Resourcer Center: Appraisal/Relocation Under the Uniform Act Workshop
2016
Alaska 120
Price Differential Payment
239
Cost of comparable replacement dwelling
$315,000
Less acquisition cost -300,000
Maximum price differential payment $15,000
49 CFR 24.401(c)
Acquired Dwelling Comparable Replacement Dwelling
Carve-out of Major Exterior Attribute
240
• Must be an exterior attribute - items like excess land, swimming pools, outbuildings, waterfront properties
• If selected comparable does not contain the attribute, deduct contributory value from acquired dwelling (carve it out)
49 CFR 24.403(a)(2)
FHWA Resourcer Center: Appraisal/Relocation Under the Uniform Act Workshop
2016
Alaska 121
Carve-out Computation
241
Acquisition cost of acquired dwelling $300,000
Less contributory value of major exterior attribute (i.e., pool)
-20,000
Adjusted value of acquired dwelling $280,000
49 CFR 24.403(a)(2)
Price Differential–Carve-out Computation
242
Total Residential Acquisition Offer $150,000Contributory Value of Gazebo -4,000Adjusted Base of Acquired Dwelling $146,000
Price of Comparable Replacement $160,000Less Adjusted Base of Acquired Dwelling $146,000Price Differential Payment $ 14,000
FHWA Resourcer Center: Appraisal/Relocation Under the Uniform Act Workshop
2016
Alaska 122
Price Differential–Carve-out Computation: Uneconomic Remnant
243
Acquis