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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

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Appraisal and RelocationUnder the Uniform Act Workshop

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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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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

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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 $

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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.)

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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;

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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)

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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.

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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

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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

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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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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…”

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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

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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?

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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”?

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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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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

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• 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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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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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

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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

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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

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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

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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

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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

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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…

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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

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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

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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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3. Relevant and reliable approaches to valueA. SalesB. IncomeC. Cost

4. Reconciliation of approaches– Sufficient to support opinion of value

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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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7. Effective date of valuation, date, signature and certification of appraiser

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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

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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

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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

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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

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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

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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

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Appraisal Scope of WorkAdditional Requirements:• Intended Use• Intended User• Definition of Market Fair Value

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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

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Appraisal Scope of WorkIntended User:• Primarily the acquiring agency but its funding partners may review the appraisal as part of their program oversight activities

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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

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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

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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

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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

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• Route Selection– Improvements– Types of land– Litigious areas– Complex properties– Contaminated properties

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• Valuation– Access and access control– Proximity– Size of taking– Temporary easements– Ownership

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• Cost Benefit Analysis– Cost of alternative– Benefit of alternative– Impact measured by analysis of data

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• Importance of Reliable Cost Estimates– Impacts participation percentage– Impacts future project budgets

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• Cost Estimate Factors to Consider:– Sales data and listings–Appraisal reports–Historic project costs– Improvements– Fencing–Damages

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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

118


2016

Alaska 60

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

120


2016

Alaska 61

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

122


2016

Alaska 62

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

124


2016

Alaska 63

“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

125

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


2016

Alaska 64

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

128


2016

Alaska 65

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


2016

Alaska 66

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


2016

Alaska 67

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.]

133

• 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

134


2016

Alaska 68

•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”!

136


2016

Alaska 69

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

138


2016

Alaska 70

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.

140


2016

Alaska 71

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

142


2016

Alaska 72

Session 7: The Yellow Book

143

• Explain the Yellow Book• Determine when it is used on highway projects

Learning Outcomes

144


2016

Alaska 73

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


2016

Alaska 74

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:

148


2016

Alaska 75

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:

150


2016

Alaska 76

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:

152


2016

Alaska 77

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 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

154


2016

Alaska 78


• 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


• All Yellow Book appraisals must invoke Jurisdictional Exception– Exposure Time and Marketing Time– Project Influence

Compatibility

156


2016

Alaska 79

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

158


2016

Alaska 80

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.”


160


2016

Alaska 81

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.”


161

• What is the Yellow Book? • When is it used?

REVIEW

162


2016

Alaska 82

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


2016

Alaska 83

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.)


166


2016

Alaska 84

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).


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.).


168


2016

Alaska 85

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


2016

Alaska 86

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


2016

Alaska 87

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

174


2016

Alaska 88

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



• 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)

176


2016

Alaska 89

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


2016

Alaska 90

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)

179

Relocation Planning

Relocation Assistance Program Goal:• Minimize impacts to displaced persons• Expedite program or project completion

180


2016

Alaska 91

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))


2016

Alaska 92

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


2016

Alaska 93

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?


2016

Alaska 94

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))


2016

Alaska 95

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))


2016

Alaska 96

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)


2016

Alaska 97

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


2016

Alaska 98

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)


2016

Alaska 99

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)


2016

Alaska 100

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


2016

Alaska 101

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?


2016

Alaska 102

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.)


2016

Alaska 103

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


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)


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


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)


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


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)


2016

Alaska 109

Decent, Safe, and Sanitary (cont.)

217

Safe electrical wiring system

49 CFR 24.2(a)(8)(ii)


218

• Heating system capable of sustaining healthful temperature (of approximately 70 degrees)49 CFR 24.2(a)(8)(iii)


2016

Alaska 110


219

Be adequate in size

49 CFR 24.2(a)(8)(iv)


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)


2016

Alaska 111


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)


222

• Contains unobstructed egress

49 CFR 24.2(a)(8)(vi)

• Barrier-free to persons with disabilities

49 CFR 24.2(a)(8)(vii)


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)


2016

Alaska 113


225

Be adequate in size

49 CFR 24.2(a)(8)(iv)


226

Not subject to adverse environmental conditions

49 CFR 24.2(a)(6)(iv)


2016

Alaska 114


227

Location not generally less desirable

49 CFR 24.2(a)(6)(v)


228

Site typical in size – needs no special improvements

49 CFR 24.2(a)(6)(vi)


2016

Alaska 115


229

Currently available on the private market

49 CFR 24.2(a)(6)(vii)


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)


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


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


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


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


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)


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


2016

Alaska 122

Price Differential–Carve-out Computation: Uneconomic Remnant

243

Acquis

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