LPA:136.8 Local Public Agency Land Acquisition: Difference between revisions

The acquisition of private property needed in connection with all Federally funded projects is governed by the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended (commonly referred to as the Uniform Act) and requirements of State laws as well as any applicable local ordinances. The implementing regulations for the Uniform Act are found in 49 Code of Federal Regulations (CFR) Part 24. District offices of the Missouri Department of Transportation (MoDOT) can provide copies of the appropriate codes and regulations, upon request.

Federal funding of any phase of a project necessitates that Federal requirements be met in all other phases of the project, as well as the acquisition of property and relocation activities to clear the right of way for construction. Noncompliance with Federal law can result in ineligibility for reimbursement for project costs in design, land acquisition, or construction.

Such projects might include roads, bike/walking paths, block grants, and enhancements, etc. Guidelines and requirements for the acquisition of land for airports and airport expansion projects, are set out in an Aviation land acquisition manual, available from the Multimodal Operations Division of MoDOT.)

Local Public Agencies (LPAs) that must comply with the provisions contained in this article are cities, counties, and any agency acquiring private property or property rights, who have not developed their own manuals or guidelines for the acquisition of private property or property rights. Manuals and procedural guidelines developed by a Local Public Agency (LPA) require the approval of the Federal Highway Administration.

This information is designed to assist LPAs in complying with applicable Federal and State requirements. It is intended for use on small or uncomplicated projects where most of the needed property may be donated, damages to remaining property are minor and no one will be displaced from their homes, farms or businesses.

If a project has more complex acquisitions than described above, or requires the relocation of property owners or personal property, please contact a Missouri Department of Transportation (MoDOT) district office for other applicable instructions.

236.18.1.2 State Responsibility

MoDOT has the responsibility to insure that all rights of way needed in connection with a Federal-aid project is acquired in accordance with the Uniform Act. By written agreement between MoDOT and the LPA, MoDOT will monitor LPA acquisition staffs and fee services in the acquisition of these rights of way.

If an LPA is not adequately staffed to perform these services, the use of fee services in the acquisition process is permitted. Use of fee services for land acquisition activities is covered in EPG 236.18.11.

MoDOT will monitor real property acquisition and relocation assistance activities conducted by, or on the behalf of, an LPA to determine that these activities are conducted in accordance with provisions of state and federal laws and directives.

236.18.1.3 Local Public Agency’s Responsibility

The LPA is responsible for acquisition of all necessary property to permit project construction. This includes right of way, permanent easements (i.e. slopes, drainage, etc.), temporary easements (i.e. construction, borrow, etc.), licenses (i.e. rights of entry, work permits, grade separation agreements, etc.) or any other agreements for the entering on or use of land or property rights for construction purposes.

The LPA must comply with all applicable requirements if Federal funds are used in any phase of the project.

A. Nondiscrimination

LPAs shall comply with all State and Federal statutes relating to nondiscrimination, including but not limited to Title VI and Title VII of the Civil Rights Act of 1964, as amended (42 USC 2000 d, e), as well as any applicable titles of the Americans with Disabilities Act (ADA). LPAs shall not discriminate on grounds of the race, color, religion, creed, sex, disability, national origin, age or ancestry of any individual.

B. 1099 Reporting

LPAs are reminded that it is their responsibility to report payments to owners for real estate purchases to the Internal Revenue Service. Specific instructions on reporting requirements are found in the IRS instructions for 1099 forms. Certain penalties for not reporting may be encountered.

Typically, closing agents are required to do the 1099 reporting for all transactions over $600. The LPA would be responsible for this reporting if no closing agent is used, or if compensation is paid through the court system.

236.18.1.4 MoDOT Right of Way Procedures

MoDOT has developed procedures that govern its activities relating to right of way acquisition. These procedures define functions, operational procedures and guidance necessary to be eligible for Federal funds participation in right of way. Local agencies will be required to follow MoDOT procedures or those contained in this article, unless the agency develops their own written policies and procedures for compliance with the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (Uniform Act) and the Regulations in Code of Federal Regulations 23 (CFR). These written policies and procedures would be subject to review and acceptance by MoDOT and Federal Highway Administration (FHWA) prior to utilization on a Federal-aid project.

236.18.1.5 Local Public Agency Right of Way Acquisition Brochure

A brochure specifically designed for LPA use is available in preprinted form through MoDOT District offices. The right of way acquisition brochure should be made available to all affected property owners on a project at the earliest opportunity (at public hearings, during engineering surveys, first contacts for acquisition of property) to indicate the agency's interest in acquiring the real property and to advise the owner of the acquisition process, and basic protection under the law. The brochure satisfies certain requirements when public hearings are necessary, as well as notification requirements before or upon initiation of negotiations with owners.

LPAs may develop and use their own brochures with prior MoDOT approval.

A brochure identifying relocation assistance eligibility and benefits is also available from the MoDOT district office for those parties or businesses that are displaced or must move personal property from the proposed right of way.

236.18.2 Funding Procedures

236.18.2.1 No Federal Funds Participation in Any Part of the Project

If no Federal funds are being requested for any phase of a project, there are no requirements imposed on LPAs in their land acquisition activities. MoDOT has adopted "One Standard" for all its acquisition activities, which is recommended for LPAs.

Frequently Federal participation needs are recognized later in the project development. Condemnation action may require unanticipated costs. If acquisition activities have followed minimum requirements, approval for the Federal participation can be expedited. The Federal requirements reflect appropriate acquisition activities for any land acquisition.

236.18.2.2 Pre-Acquisition Requirements With Federal Funds Participation in Any Part of The Project (Right of Way or Construction)

Right of way may not be acquired until the Federal Highway Administration (FHWA) has approved the environmental document and Section 106 (Historic and archeological considerations) has been completed, (see 136.4 Environmental and Cultural Requirements of the LPA Policy). Failure to accomplish all clearances might jeopardize Federal funds participation in the entire project.

The acquiring agency is responsible for submitting evidence that environmental and cultural requirements have been addressed and approved. The district liaison engineer in Design will verify completion of these requirements.

The Request for Acquisition Authority will document completion of all environmental clearances on projects with Federal funds participation. The Request for Notice to Proceed With Right of Way Acquisition documents completion of all environmental clearances on projects with Federal funds participation in construction, but not right of way.

236.18.2.3 Request for Notice to Proceed with Federal Funds in Construction but NOT in Right of Way

Although there may be Federal funding in construction, if no Federal funds are to be used in the right of way acquisition, the LPA should still submit one set of completed right of way plans to the MoDOT district right of way with a Request to Proceed With Right of Way Acquisition.

The request also identifies if the agency is adequately staffed to pursue right of way acquisition or if it will be necessary to utilize fee services to acquire the right of way.

If fee services are necessary, use of a written contract is recommended (see EPG 236.18.11). Fee appraisers utilized to prepare Value Finding or Standard Format Appraisals, must be State Certified, either Residential or General. Non-certified individuals, familiar with real estate values may be used to prepare Payment Estimates on projects with no Federal funds in right of way.

A. MoDOT Provides Notice to Proceed With Right of Way Acquisition on Projects With No Federal Funds in Right of Way

MoDOT will notify the local agency in writing to proceed with right of way activities after MoDOT district right of way has reviewed and approved the data provided by the LPA with the Request for Notice To Proceed With Right of Way Acquisition.

B. If Federal Funds Participation Becomes Necessary After Right of Way Acquisition Has Begun

If at any point in the acquisition process, Federal funds are found to be necessary or desirable for the acquisition of right of way, an Acquisition Authority (A-date) must be obtained, as outlined in the next paragraph. Acquisition costs incurred prior to receipt of an A-date will not be eligible for Federal fund participation.

236.18.2.4 Acquisition Authority (A-Date) is Required with Federal Funds Participation in Right of Way

If Federal funds are to be utilized in the right of way project, the LPA is cautioned that no costs that occur prior to the establishment of an Acquisition Authority date (A-date) are eligible for Federal participation. An A-date is the date after which costs may be incurred, and receive Federal reimbursement.

A Request for Acquisition Authority (A-date) is an application to MoDOT, certifying approval of plans and environmental classifications, execution of supplemental agreements (if any), adequate right of way staff or use of fee services, request of Federal funds participation, and an estimate of the right of way acquisition cost.

The LPA may request an A-date by submitting:

A completed Request for Acquisition Authority
Two sets of completed right of way plans
A cost estimate indicating acquisition costs.

The request also indicates if the local agency is adequately staffed to handle the right of way activities, or if fee services will be required to handle all or part of the right of way activities. The LPA should complete the Request for Acquisition Authority (Appendix Item 2B) submitting it to the local MoDOT district office. Assistance in completing this form is available MoDOT personnel.

A. MoDOT Provides Acquisition Authority With Right of Way Acquisition on Projects With Federal Funds in Right of Way

With this data the MoDOT district office will obtain an A-date from the Federal Highway Administration through the MoDOT Right of Way Division, the district will then notify the LPA, in writing, of approval of right of way plans, and that it may proceed with right of way activities.

236.18.2.5 Costs Eligible for Reimbursement Before Receipt of an A-Date

Costs in preliminary right of way activities (those prior to the appraisal phase such as right of way estimates, title work and description writing) are eligible for Federal participation as a preliminary engineering activity and are eligible for reimbursement after prior approval by MoDOT for preliminary engineering.

Mid America Regional Council (MARC) does not allow reimbursement of Preliminary Engineering costs, because such costs are part of that agency's participation agreement. (Affects Jackson, Platte, Clay and Cass counties.)

236.18.2.6 Costs Eligible For Reimbursement After Receipt Of An A-date:

Acquisition of real property.
Incidental costs to the acquisition. (i.e. appraisal, appraisal review, negotiation, and relocation expense, recording documents, etc.)
Pro rata taxes and/or special assessments.
Permanent and temporary easements.
Damages to remainder of real property.
Cost of acquisition through condemnation, interest on legal settlement or court awards, and court commissioner fees.
Tenant-owned improvements.
Uneconomic remnants.
Construction in exchange for donation, or mitigation of damages.
Relocation payments and expenses.

Support for claims for reimbursement shall include the following:

A. A right of way map or plan showing the rights of way authorized, and actually acquired, including:

parcel identification numbers
area acquired
property lines of the area acquired
any other pertinent data affecting the cost of the right of way such as structures, improvements and fences.

B. Statement of right of way cost showing:

parcel number
cost of parcel
cost of excess land, if any
credits by parcel or project
incidental expenses by parcel or project
cost of construction performed in mitigation of damages on a parcel basis if claimed as a right of way item (23 CFR 710.305(a)(1)).

236.18.2.8 Inspection of Documents

All documents relating to acquisition of the right of way shall be available for inspection at reasonable times by authorized representatives of MoDOT and the Federal Highway Administration (23 CFR 305 (b and c)).

236.18.2.9 Federal Project Number

All plans, contracts, deeds, appraisals, options, vouchers, correspondence and all other documents and papers shall carry the Federal-aid project number for identification.

236.18.3 State Monitoring

236.18.3.1 State Monitoring

MoDOT has overall responsibility for acquisition of right of way needed in connection with all Federal funded projects, and MoDOT must assure compliance with Federal Regulations. This assurance is provided at the same time the agency certifies clearance of right of way and requests authority to advertise for physical construction. In order to give this assurance, MoDOT personnel will provide a resource for information on proper procedures, and may monitor the agency's acquisition activities during the acquisition process, and will monitor the entire project, or representative samples, prior to clearance certification.

MoDOT will utilize Monitor Checklists (Project/Acquisition, Appraisal, and Relocation Assistance to evaluate the various activities. For small projects all parcels may be monitored. For larger projects, a sample may be utilized.

The state's sole objective in this monitoring activity is to assure that when Federal funds are requested by the agency in any phase of the project, that acquisition activity will have fulfilled all the requirements for the agency to receive such funds. Agencies are therefore requested to consult with the right of way manager, at the MoDOT district office, at any stage of the right of way function. MoDOT personnel can provide a technical resource, and assure that right of way acquisition is in compliance with regulations. Early consultation can eliminate problems and facilitate delivery of Federal funds.

236.18.4 Retention and Access to Records

236.18.4.1 Retention and Access to Records

The acquiring agency shall maintain a project file (i.e. appraisal data book(s), title services contract, public hearing record, etc.) and a separate parcel file for each acquisition of real property and each unit displaced. These records shall be sufficient to demonstrate compliance with applicable laws and requirements and shall be available for inspection at reasonable times by authorized representatives of MoDOT and the Federal Highway Administration and other authorized federal representatives. The records shall be retained for at least three years after the final payment for the construction project from the Federal Highway Administration.

LPAs must maintain an inventory of all improvements acquired; how these improvements are disposed of; an accounting of management expenses (i.e. advertising for disposal, preparing demolition contracts, etc.), rental receipts received, and recovery payments for disposition of improvements; and rodent control costs. See EPG 236.18.12 Property Management for additional requirements.

NOTE: LPAs are reminded that it is their responsibility to report payments to owners for real estate purchases to the Internal Revenue Service. Specific instructions on reporting requirements are found in the IRS instructions for 1099 Form. Certain penalties for not reporting may be encountered.

236.18.5 Plans and Title Information

236.18.5.1 Plans

Plans for a project must provide land or right of way adequate for the construction, operation and maintenance of the facility for the protection of both the project facility and the public.

If the project is not for road purposes, plan requirements may be different, as imposed by agencies other than the Federal Highway Administration. Check with MoDOT’s district right of way manager for the plan requirements of those jobs.

Right of way plans are a supporting document for any progress or final claim for Federal reimbursement of expenditures made for right of way when Federal funds have been authorized in the right of way acquisition. The plans must show the following information:

existing right of way
beginning and ending project limits by station
proposed right of way and easements
dimensions of proposed acquisition
names of property owners
land survey lines (including quarter section and quarter-quarter section lines) and property lines, including at least one witnessed corner with the centerline tied to it
parcel identification numbers
areas of new right of way, permanent easements and temporary easements
remainder of land holdings on each side of road
all improvements or structures to be acquired or damaged by the project
grading and slope limits
entrances (location, type and surface material)
Federal-aid project number

236.18.5.2 Title Information

Title and ownership information is needed for the purpose of establishing property lines, computing ownership areas, right of way areas, etc. Certain title information is necessary to determine if marketable title is passing to the acquiring agency. When minor rights of way and/or temporary rights are the only rights being acquired, it is permissible to determine ownership by use of the last deed of record.

Title information needed is owner's name, total area of contiguous lands comprising the ownership, information regarding mortgages, special assessments, liens, taxes, etc., to enable the LPA staff to prepare the necessary documents for title transfer. Required title information may be secured by a qualified member of the LPA staff or purchased from a title company doing business in the county.

If necessary, commitments for title insurance may be obtained from qualified title agencies.

Alternatively, the LPA can obtain abstracts from which the agency's attorneys can determine the conditions of titles. Each abstract will cover a minimum period of 30 years or no less than four conveyances, except where it reasonably appears that an indicated ownership of the fee title of more than 30 years duration exists. Abstracts should also include conveyances of easements, mineral rights, or other interests of less than fee title, which appear of record.

The cost of obtaining the necessary title information is an incidental cost to right of way acquisition, and is one of the costs that are eligible for Federal participation. Preliminary title work, like last deeds of record and title commitments, is a preliminary engineering cost, and eligible for participation if only construction is Federal participating. Title insurance, and later title opinions are generally considered a right of way expense, and are only receive Federal participation if there are Federal funds in the right of way acquisition portion of a project.

When non-complex property or property rights are donated, a proper LPA authority may waive acquisition of additional property interests (like partial mortgage releases, easement owners, tenant interests, etc.), but a memo outlining the waiver to acquire additional property interests should be included in the file.

236.18.6 Acquisition

236.18.6.1 Negotiations to Acquire Real Property

A. Contact With Owners and Their Representatives

Acquisition of real property and property rights is an extremely sensitive area of activities since it involves direct personal contacts with the public. The negotiator shall make a reasonable effort to personally contact each resident property owner or the owner's designated representative. The negotiator should strive to attain rapport with the property owner, inspire confidence in the acquisition process and the fairness of the offer being made.

The property owner should be provided with an explanation of the acquisition process that may be supplemented by the acquisition brochure. A full explanation of the project should be given and how it will affect the owner's property.

If no personal contact has been accomplished, certified mail of offer letters is recommended prior to condemnation.

B. Negotiator's Report

A record of negotiations for each parcel shall be maintained by the negotiator and become a permanent part of the parcel file. A sample Negotiator's Report is available. A detailed record of each contact with the owner or representative shall be completed, signed and dated by the negotiator, within a reasonable time after the contact.

The information for each contact should include as a minimum the date and place of each contact, parties contacted, monetary amount of offer made, counteroffers, reasons settlement could not be reached, an explanation of the acquisition and any other pertinent data. Each contact report should be signed and dated by the negotiator preparing the report.

When negotiations are unsuccessful and the negotiators consider further attempts to negotiate to be futile, they should record their recommendations for action considered appropriate.

C. Prompt Written Offers to Owners and Tenant Owners

If donations are not possible, make a prompt written offer to an owner, based on the full amount of just compensation indicated on the approved Payment Estimate or appraisal. Prompt offers dispel owner dissatisfaction and encourage confidence in the agency. Also, a delayed offer may not reflect current market conditions and cause need for revaluation.

A written offer is also required in the case of a tenant that owns any of the buildings, structures or other improvements affected by the acquisition.

The written offer to the property owners and tenant owners shall include, at a minimum, the following:

The amount established as just compensation. (In the case of a partial acquisition, the compensation for the real property to be acquired and for damages to remaining real property shall be separately stated.)

A description, location, identification and the interest in the real property being acquired. This may be satisfied by attaching a copy of the proposed acquisition deed.

Identification of buildings, structures and other improvements (including removable buildings, equipment and trade fixtures) considered to be a part of the real property to be acquired.

Where appropriate, the statement shall identify any separately held ownership interest in the property, (example: a tenant-owned improvement) and indicate that such interest is not covered by the offer.

A sample offer letter is used when just compensation has been determined by a Payment Estimate. A sample offer letter is use when just compensation has been determined by a Value Finding or Standard Format appraisal.

D. Owner's Consideration of Offer

The owner should be given a reasonable time to consider the offer and to present information which is believed to be relevant in determining the value of the property along with suggested modification in the proposed terms and conditions of the purchase. The acquiring agency must consider the owner's counter offer and suggestions, even though there is no obligation to accept the same.

Occasionally, additional information may dictate a need for a revision to the offer. If an owner volunteers information, the acquiring agency must give that information appropriate consideration. Any revision should be documented providing an explanation of the reasons. A revised written offer, approved by the proper agency official, should be made promptly to the property owner.

E. Payment Before Possession

No owner shall be required to surrender possession of real property before the acquiring agency pays the agreed purchase price, or deposits the amount of a Commissioner's award with the court for the benefit of the owner.

F. 90-Day Notice to Vacate

No person lawfully occupying real property shall be required to move or remove personal property from a dwelling, business or farm operation without at least 90 days' written notice from the acquiring agency before the date by which such move is required.

In cases of displacement of an individual, family, or business, MoDOT will offer guidance and assistance regarding relocation assistance, upon request from the LPA.

A 90-day Notice to Vacate shall not be given before the notice of relocation eligibility. A notice to vacate is required in all cases in which an acquired structure is occupied, or personal property must be removed.

G. Uneconomic Remnant

When a partial acquisition leaves the owner with a remainder that has little or no utility or value to them, an uneconomic remnant may have been created. The LPA shall make the determination if there is an uneconomic remnant. This is usually decided upon in the appraisal or appraisal review process, but may result from declarations and opinions of the owner.

The LPA shall make an offer to purchase the uneconomic remnant. The offer to acquire a remnant should be included in the offer to acquire the needed land or right of way, or if necessary, may be an entirely separate offer. The owner may decline to sell the remnant. Federal funds may participate in the costs of acquiring uneconomic remnants. However, uneconomic remnants cannot be acquired by condemnation. Condemnation petitions should not include the area considered an uneconomic remnant.

If the remnant is not included as part of the regular right of way and the remnant is sold by the LPA, credit to Federal funds is required if they were utilized in the acquisition. The credit to Federal funds would be at the same pro-rata as Federal funds participated in the cost of the acquisition. The amount credited should be the result of a disposal by public sale or negotiations based upon appraised fair market value. When a credit to Federal funds is required, the cost of disposition may be deducted from the sales price. When an uneconomic remnant is not incorporated within the approved right of way limits, no FHWA approval is required to dispose of it.

The necessary record keeping, and future refund, can be avoided by acquiring uneconomic remnants without Federal funds.

H. Owner Retention of Improvements

The owner of improvements located on land being acquired as right of way may be offered the option of retaining those improvements at a salvage value determined by the acquiring agency. Generally, the appraiser or LPA official who estimated the value of the improvement determines the salvage values. Salvage Value is the amount the item would command if sold in place with the buyer being responsible for removal from the property. The acquiring agency is not required to offer owner retention in every instance.

When the owner elects to retain an improvement, the just compensation paid the owner should be reduced by the salvage value of the retained improvement. Reduction of the salvage value to accomplish a settlement, must be approved by an LPA official, and adequately documented in the administrative settlement justification letter.

When improvements are retained, it is considered a good business practice to hold sufficient funds, i.e., a performance bond to ensure proper removal of the improvement and clean up of the premises.

I. Coercive Action

All negotiations shall be conducted in such a manner as to eliminate any coercion of an owner into reaching agreement. Condemnation shall not be used as a threat. The property owner shall be given a reasonable amount of time to consider the offer and to obtain professional advice or assistance if they so desire. The agency shall not advance the time of condemnation, or defer negotiations or condemnation or the deposit of funds with the court, in order to induce an agreement on the price to be paid for the property.

J. Separation of Functions

Appraisal/Negotiation

Someone other than the appraiser or reviewing appraiser of the real property to be acquired shall conduct the negotiations, except that the LPA may permit the same person to value and negotiate an acquisition where the value is based on a Payment Estimate or is less than $10,000. However, the valuation prepared on a Payment Estimate must be reviewed and an amount approved by another designated agency official before the initiation of negotiations.

Delivery of Payments

The individuals appraising, reviewing the appraisal or negotiating for the parcel shall not deliver the payment to the owner. Certified mail would be acceptable.

K. Incidental Expense Reimbursement

The owners of property acquired for a project will be reimbursed for the following expenses they necessarily incurred for the transfer of the property.

Property Transfer Costs: Recording fees, transfer taxes and similar expenses incidental to conveying the property. These expenses are normally paid direct by the local agency.

Proration of Taxes: Owners will be reimbursed for a pro rata portion of the state, county and city real estate taxes paid for the current taxable year on property purchased by the agency. The pro rata portion of taxes will cover the full number of months remaining in the calendar year after payment is received by the owner for the property. Claims for reimbursement must be made within six months after the city or county tax delinquent date. Delinquent tax payments are not reimbursable. The owner is responsible for submission of paid tax receipts and request for payment to the agency for reimbursement. A sample Pro Rata Real Estate Tax Claim Form is available. Unless the owner waives this requirement, it must be given to the owner.

Mortgage Penalties: Owners will be reimbursed for actual penalty costs for prepayment of a pre-existing mortgage entered into in good faith and filed of record. These costs will be reimbursed when the property is acquired in its entirety or the acquisition is of such magnitude that the remainder will not provide collateral for the mortgage and/or the mortgagee legally requires penalty costs for prepayment of the mortgage. The owner is responsible for submission of paid receipts of penalty costs and request for reimbursement to the agency.

Appeal for Expense Eligibility: Property owners may file a written appeal with the agency if they believe that the agency has failed to properly consider their application for reimbursement of expenses incidental to the transfer of title. This appeal may include their eligibility for, or the amount of a payment. The time limit for filing an appeal is 60 days after they receive written notification of the agency's determination on their claim.

236.18.6.2 Donation of Right of Way

A. Donations - Waiver of Appraisal

The use of donations may be used to acquire property and property rights without the use of a detailed appraisal, however some documentation is necessary.

In some instances property owners affected by small, uncomplicated acquisitions of right of way and/or easements may be willing to donate their property that is needed for the project, especially when the project improvements provide a benefit to the property and community.

Donations are acceptable; however, the owner must be fully informed of the right under law to payment of just compensation as determined by an appraisal. An owner can waive the right to an appraisal, and make a donation. To assure full understanding by the owner, a Donation - Waiver of Appraisal Letter must be signed by the owner.

When non-complex property or property rights are donated, a proper LPA authority may waive acquisition of additional property interests (like partial mortgage releases, easement owners, tenant interests, etc.), but a memo outlining the waiver to acquire additional property interests should be included in the file.

The Uniform Act forbids an LPA from taking any coercive action in order to compel an owner to agree on a price for his property. As such, in most cases it would be inappropriate for a LPA at the time of initiation of negotiations to inform the property owner that the needed right of way would have to be donated to the acquiring agency in order for the roadway project to be completed. The only acceptable circumstance would be in the case when the project would be terminated unless all owners agreed to donate.

B. Donations of Property as Credit To LPAs Matching Share (Soft Match)

The value of donated property can be used as a credit to the local agency's matching share of project costs. Those agencies wishing to utilize this provision should follow specific directions. MoDOT district right of way offices will be able to provide assistance and guidance in obtaining this credit.

If such crediting is used, a valuation of the donated property must be done. MoDOT must concur in that valuation prior to Plans, Specifications and Estimates Approval (PS&E), to assure the credit.

C. Donation in Exchange for Construction Features

A LPA may accept an owner's offer to donate in exchange for construction features that will benefit the owner. The LPA should make an economic determination that the cost of the services rendered can reasonably be balanced against the value of the required acquisition. In this case the owner should sign a Donation In Exchange letter, and complete the donation of necessary right of way in exchange for the specified construction features to be rendered.

236.18.6.3 Dedications

A LPA may accept a parcel of land through dedication if the dedication is done pursuant to a local planning and zoning process or at the request of the property owner for use concessions. This is not considered an acquisition requiring just compensation.

Dedications are not considered donations for purposes of donation credit (soft match). Any dedication undertaken to circumvent Federal requirements is unacceptable.

236.18.6.4 Assessments

A LPA may not take any coercive action in acquiring property for a project. Assessments against individual properties of a project are unacceptable. However, assessments to recapture funds expended for a public improvement are acceptable if levied against all properties within an established taxing area or district.

236.18.6.5 Negotiator Qualifications

While MoDOT imposes no requirement on the staff of a LPA, it is recommended that LPA staff negotiators carry the following qualifications, which is equivalent to the MoDOT Right of Way Specialist.

"Knowledge of business and real estate as might be acquired through experience or graduation from an accredited four year college or university with a bachelor degree in real estate, finance, economics, business administration, public administration, or related area."

236.18.7 Property Valuation

236.18.7.1 General

The LPA must offer the property owner an amount that it believes to be just compensation, and that amount is to be based on the fair market value of the property as determined by a professionally prepared, reviewed and approved appraisal. Further, the Uniform Act provides that the amount of just compensation shall be no less than the amount of the LPA’s approved appraisal.

An appraisal is defined in the Uniform Act as:

"... 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."

236.18.7.2 Analysis of Appraisal Problems and Format Recommendations (Fee Study)

A qualified individual from the LPA's right of way organization should visit the project site to identify the valuation problem, and determine the number and type of reports needed. This activity is referred to as a "Fee Study", or Analysis of Appraisal Problems and Format Recommendations. The introductory paragraphs of the following instructions for each of the appraisal report formats indicate when the use of each format is appropriate.

236.18.7.3 Appraisal Report Formats

The format and level of documentation for the appraisal report are dependent upon the complexity of the appraisal problem. Federal regulations do allow for the waiver of appraisal valuations (Payment Estimates) if the LPA determines that an appraisal is unnecessary because the valuation problem is uncomplicated and the fair market value is estimated at $10,000 or less based on a review of available data. The Payment Estimate provides the agency with documentation of the estimate of Just Compensation that is less than $10,000, exclusive of fence.

If the appraisal waiver (Payment Estimate) cannot be utilized, an appraisal must be prepared. Because of the varying complexity of appraisal problems, two formats for appraisals are to be used, either the Standard Format or the Value Finding appraisal. These appraisal formats must be prepared by either qualified LPA staff appraisers or by Missouri certified appraisers.

If Outdoor Advertising, Trademark, logo, or other signs are encountered within the acquisition, consult MoDOT district right of way office for valuation and acquisition guidance.

A. Payment Estimate

LPA’s may make an offer, not to exceed $10,000, to a property owner without the benefit of an appraisal, but some documentation is required. Compensation for the cost of replacement fencing is allowed in addition to the $10,000 maximum. The offer amount is to be established on a Payment Estimate form and is to be approved by an official of the acquiring agency prior to the initiation of negotiation on a specific parcel. The format for a Payment Estimate is available. A sample of a letter offer based upon a Payment Estimate is also available.

LPA personnel (i.e., a real property assessor or other persons familiar with local realty values) prepares the Payment Estimate. The same person may perform both the value estimation and negotiation functions when the acquisition cost (not including fence) is $10,000 or less.

If a Certified appraiser prepares and/or co-signs the Payment Estimate, a Jurisdictional Exception statement is provided to accommodate the appraiser's Uniform Standards of Professional Appraisal Practice (USPAP) requirements.

When non-complex property rights are acquired by Payment Estimate, proper LPA authority may waive acquisition of additional property interests (like partial mortgage releases, easement owners, tenant interests), but a memo outlining the waiver should be included in the file.

Instructions for preparing the Payment Estimate are available.

B. Value Finding Format

Use of the Value Finding Appraisal Format is allowed when the acquisition is simple, when fair market value can adequately be estimated by the sales comparison approach with only minor adjustments, when damage to the remainder can be measured by the cost to cure or is consequential damage not exceeding $10,000 in total, the highest and best use is the present use and is not materially affected by the acquisition. Consequential damage due to more than one factor may suggest that the Standard Appraisal Format should be used.

Use of the Value Finding Format in appraising residences that are to be acquired is not permitted without prior approval of the MoDOT district office.

The appraiser shall adhere to the format, and shall include paragraph headings and numbers as shown. The appraisal shall be typewritten on 8 1/2" x 11" paper with the pages numbered sequentially.

The format instructions set out appraisal requirements of MoDOT and the Federal Highway Administration. It is inevitable that appraisers will occasionally encounter situations that are not specifically addressed herein. In all cases the appraiser is responsible for a credible, adequately documented appraisal. Reasonableness and typical professional appraisal practices are the standard.

Case law, management decision and precedent have established policies concerning a number of ownership items and appraisal problems frequently encountered in appraising for partial acquisition. These policies apply to all appraisal formats and are described in Special Appraisal Considerations.

An identification block shall be included at the front of the appraisal, and may be altered to accommodate other types of projects and agencies.

C. Standard Appraisal Format

Use of the Standard Appraisal Format is required when the appraisal problems are judged to be complex. It is required when the highest and best use of a property as improved is different than the highest and best use as if vacant, and when residential or other major improvements are taken. (Use of the URAR Residential Appraisal Format may be approved in certain circumstances.) The Standard Format is also required when there is a change in the highest and best use after the acquisition, unless the remainder is an uneconomic remnant.

The appraiser shall adhere to the following format and shall include paragraph headings and numbers as shown. The appraisal shall be typewritten on 8 1/2" x 11" paper with the pages numbered sequentially.

The format instructions describe appraisal requirements of MoDOT and the Federal Highway Administration. It is inevitable that appraisers will occasionally encounter situations that are not specifically addressed herein. In all cases the appraiser is responsible for a credible, adequately documented appraisal. Reasonableness and typical professional appraisal practices are the standard.

Case law, management decision and precedent have established policies concerning a number of ownership items and appraisal problems frequently encountered in appraising for partial acquisition. These policies apply to all appraisal formats and are set out in Special Appraisal Considerations.

An identification block shall be included at the front of the appraisal, and may be altered to accommodate other types of projects and agencies.

236.18.7.4 Sale Forms

Forms are available for sale write-ups (Residential and Non-Residential) as well as instructions for the proper completion of the sale forms. The Residential Sale form is intended for sales of houses, and its description items generally correspond with the description items of the URAR form appraisal. The Non-Residential Sale form is intended for all other kinds of vacant or improved sales.

Sale forms may be attached to each appraisal report, or may be presented in a Data Book and referenced in the report.

236.18.7.5 Appraiser's Certification

A certification by the appraiser is required with each Value Finding and Standard Format appraisal. A sample of a certificate is included available. The certificate provides evidence that the appraiser did invite the owners and tenants to accompany the appraiser during an inspection of the property, along with other statements of fact.

236.18.7.6 "Caution" If Condemnation is Required

Local agencies are advised that state condemnation law requires basing compensation on the difference in the before and after condition, which is accomplished by a proper Standard format appraisal. If either the Payment Estimate or Value Finding formats are used, additional appraisal costs may be incurred if a jury trial is necessary.

If approval of Federal participation in right of way costs has not been needed previously on the project, request for participation and Acquisition Authority will be necessary at this point, if Federal participation will be needed.

236.18.7.7 Appraisal Review

A. General

It is the responsibility of the LPA to review all Value Finding and Standard Format appraisal reports and specialty reports of real property to be acquired in connection with Federal-aid projects. The purpose is to ensure that a qualified review appraiser determines that the approved estimate of just compensation is reasonably supported by an acceptable appraisal. (Payment Estimates are merely cosigned by an individual familiar with the project and property values, not formally reviewed.)

An appraisal review is a technical review of an appraisal report, and is a critical quality control element in the valuation/acquisition process. An appraisal review is not an arithmetic or grammatical review of an appraisal report. It is a comprehensive technical examination of the appraisal, as reported by an appraiser. If for any reason the reviewing appraiser believes that the appraisal is patently lacking in any important detail, he/she should request the appraiser to make corrections or furnish such additional support and documentation that may be required. Written communication should be utilized wherever practical. (See, Instructions for Appraisal Review and Appraisal Review and Approval of Just Compensation form).

A review appraiser must be a certified appraiser who is familiar with the type of appraisal problem being reviewed and the techniques required to address that problem. The review appraiser must also be completely familiar with the MoDOT appraisal and other relevant requirements, and be listed on the Roster of Approved Contract Appraisers.

The Roster of Approved Contract Appraisers indicates those certified appraisers that are currently appropriate for use as reviewers. Contact MoDOT’s local district office for a current roster of appraisers in the LPAs area. Additional reviewing appraisers may be approved upon request of the MoDOT district office.

Payment Estimates do not require approval by a certified reviewing appraiser, but rather approval or co-signature by an agency official.

B. Separation of Functions

Appraisal/Review/Negotiation

Negotiations shall be conducted by someone other than the appraiser or reviewing appraiser of the real property to be acquired, except that the acquiring agency may permit the same person to value and negotiate an acquisition where the value is $10,000 or less. However, the valuation must be reviewed and an amount approved by another designated agency official before the initiation of negotiations.

The appraiser that made the appraisal may not review appraisals prepared by LPA staff. A member of the same firm as the contract appraiser may not review appraisals prepared by a contract appraiser. The Roster of Approved Contract Appraisers indicates those fee appraisers qualified to perform the Review function. Additional review appraisers may be approved upon request of the MoDOT district office.

Delivery of Payments

Individuals appraising, reviewing the appraisal or negotiating for the parcel shall not deliver payments to owners. Certified mail would be acceptable.

236.18.7.8 Appraiser Qualifications

A. Staff Appraiser

Staff appraisers who will prepare Value Finding and Standard format appraisals must carry adequate qualifications to accomplish the appraisal assignment, and be approved by the MoDOT district right of way manager.

While MoDOT imposes no requirement on the staff of a LPAs it is recommended that agencies subscribe to the MoDOT requirement for staff appraisers, which is:

Knowledge of business and real estate as might be acquired through graduation from an accredited four-year college or university with a bachelor degree in real estate, finance, economics, business administration, public administration, or related area.

Two years experience with the LPA in right of way appraisal activities, or four years' experience outside the LPA in a comparable position.

Completion of training courses in real estate, appraisal principles and appraisal procedures.

B. Fee Appraisers Must Be On Roster Of Approved Contract Appraisers

The selection of fee appraisers should be based upon the qualification level and experience necessary for the type of appraisals to be encountered. The selected appraiser must appear on the Roster of Approved Contract Appraisers, which is updated annually by MoDOT. The MoDOT district office can approve the use of additional fee appraisers.

C. State Certification Required

State appraisal certification is required for all contract appraisers, either "Residential" or "General".

236.18.7.9 Review Appraiser Qualifications

A. Approval and Co-signing of Payment Estimates

LPA staff familiar with real estate values can inspect and co-sign or approve compensation determined on a Payment Estimate.

B. Review and Approval of Value Finding or Standard Format Appraisals

Qualified review appraisers are necessary to approve Just Compensation estimated by appraisers on the Value Finding or Standard Format appraisals. Reviewers (staff or fee) who will approve just compensation based on staff appraisals of Value Finding and Standard formats, must be approved by MoDOT.

C. Fee Review Appraisers Must Be On Roster of Approved Contract Appraisers

The Roster of Approved Contract Appraisers lists appraisers who are generally qualified for all review responsibilities. Appraisers that are not indicated as a “Review Appraiser” may be appropriate for review responsibilities for some projects.

D. State Certification Required

State appraisal certification is required for all contract review appraisers.

236.18.8 Acquisition Through Eminent Domain

236.18.8.1 General

The basic principles governing the exercise of the power of eminent domain are established by State law and are described in EPG 236.10.7 Eminent Domain Guidelines. If negotiations are not successful, the acquisition case is turned over to the LPA's legal representative to secure the property through condemnation action, or a legal settlement. It is strongly recommended that any time property must be acquired by condemnation action, the LPA should contact the local MoDOT district office for assistance.

After property has been placed in condemnation and the commissioners have made their report, the acquiring LPA should make a determination as to whether the case should be tried to a jury or disposed of by settlement. In either case, however, if the LPA intends to claim federal participation in the payment of any excess over and above the original approved offer, the file must be adequately documented to justify the action taken.

The attorney handling the case for the LPA should become familiar with Title 49 of the Code of Federal Regulations, Part 24, and Subpart D of Part 712 of Title 23 of the Code of Federal Regulations.

236.18.8.2 Documentation of Legal Actions

The LPA shall provide to the MoDOT district right of way office proper documentation for not filing exceptions to commissioners award, justification to dispose of a condemnation case by settlement, or a trial report in the case of jury trial. This documentation is to be furnished to MoDOT district counsel for review and approval action. District counsel shall contact the appropriate representative of the LPA for corrective action if necessary.

236.18.8.3 Use of a Fee Attorney or Special Counsel

When a LPA hires an outside attorney to handle condemnation. the requirements of 23 CFR, Section 712.408 must be followed Basically, advance Right of Way Division approval is a requirement along with a determination that:

The employment of special counsel is in the public interest
The fee for the services is reasonable
The fee is not on a percentage basis.

Contact the local MoDOT district right of way office when the LPA anticipates using outside counsels.

236.18.8.4 Federal Participation in Costs of Staff Attorneys

Federal participation shall not be allowed in payment to a city or county attorney for work performed in connection with the acquisition of rights-of-way when he/she is obligated to perform such work without additional compensation. In those cases when the normal duties of the attorney do not include the acquisition of property for right of way purposes, Federal funds may participate in payments for services performed.

236.18.8.5 Preparation of Justification for Legal Settlements

A legal settlement is any acquisition settlement made by the responsible LPA's legal representative after condemnation is filed. The legal settlement is the attempt to reach a settlement after all reasonable efforts by the negotiator have failed, including attempts at an administrative settlement.

If Federal funds are to participate in right of way acquisition, including the settlement costs, and the LPA determines that it is in the best interest to dispose of the condemnation case by legal settlement, the legal representative handling the case must prepare a Justification for Settlement statement and provide this statement to the MoDOT district right of way office.

If an A-date authorizing Federal funds participation in right of way has not previously been authorized, an Acquisition Authority (A-date) must be obtained prior to completion of the settlement and prior to request for Federal participation in the cost of the acquisition settlement.

The LPA shall identify the agency’s legal representative responsible for making the settlement. If this representative is not a direct employee of the agency, the LPA shall concur in the settlement. This includes stipulated settlements approved by the court in which the condemnation action has been filed.

Justifications for settlement should contain as a minimum the following:

A description of the property as to dimensions, terrain, use, access to public roads and other facilities, severance by public roads and water courses, improvements, and any other features which would have a bearing upon the value of the property.

The effect which the acquisition has on the property, such as severance, limitation of access, removal of fencing and other improvements, and blocking of existing public roads which provide access to the property.

The date of taking.

The amount of the commissioners' award.

All appraisals that have been obtained for the determination of damages with the dates of appraisals.

The approved offer and the date the amount of the offer were established.

Any comments which are contained in the reviewing appraiser's report, or in the negotiator's records, which might have a bearing on a determination for settlement.

Any legal deficiencies noted in any of the appraisals or in the reviewing appraiser's determination.

Any changes which have occurred in the property between the date of any of the appraisals and the date of taking, such as rezoning or change in improvements.

Substantial differences in appraisals or between the appraisals and the approved offer should be correlated.

A discussion of problems to be anticipated in a trial of the case, both legal problems and evidentiary problems that could affect the outcome of trial. This might include problems relating to comparable sales, highest and best use of the property, rezoning, drainage problems, extent and effect of severance, encroachment damage, the admissibility of evidence, valuation of landscaping, depreciation of improvements (especially functional obsolescence), special benefits, etc.

A discussion as to the effectiveness, if known, of the witnesses.

A discussion of recent trial results in the county.

Costs of trial may be considered along with other matters in the justification, but may not be used as the sole basis for settlement.

In making a determination as to whether to recommend settlement of a case, all pertinent information and facts which would be admissible in a trial of the case should be discussed, with a discussion as to the effect which such evidence would probably have in the outcome of the trial. Where additional sales have occurred in the area which the attorney feels would be admissible in evidence and would have a bearing on the outcome of the trial, the attorney should discuss the sales as to their admissibility in the trial and the effect that their admission into evidence might have on the outcome of the trial.

The acquiring agency's legal counsel should be involved from the early stages of the project delivery. During the planning and design stages, he or she may be able to detect complex title or valuation pitfalls that can be avoided or minimized during the appraisal process. Counsel should be called upon for advice on such matters as the law on benefits, before/after value appraisals, and compensibility of particular items. Counsel should be given an opportunity to offer advice prior to the determination to condemn.

236.18.8.6 Trial Reports

Federal funds may participate in amounts greater than the amount established as just compensation if there is supporting documentation in the LPA project file. A trial report signed by the trial attorney, should contain the following information:

A description of the property as to size, shape, terrain, improvements, access to roads and other facilities, severance by roads and other facilities, and any other matter which has a bearing on the value or use of the property.

Date of taking.

A description of the taking and its effect on the remaining property.

The date and amount of the originally approved offer and the appraisal upon which the offer was based.

The date and length of the trial.

The evidence presented on behalf of the defendant. This should include not only the testimony as to damages, but also other matters presented by the defendant which bear upon the before and after values of the property.

Evidence presented by the plaintiff. This should include not only a statement as to the amount of damages to which the witnesses testified, but other matters presented into evidence by witnesses which would have a bearing on the value of the property, such as highest and best use, zoning, comparable sales, nature of special benefits.

The reason for any substantial variance between the original approved offer and plaintiffs testimony.

Differences arising between the parties in trial, not only as to amounts of damages to which the witnesses testified, but a discussion as to the reasons for the differences in the amounts and differences between the parties as to other features of the property, such as physical features, zoning, probability of rezoning, highest and best use, and the extent which the highest and best use has been affected by the taking.

Any differences arising between the parties as to questions of law, especially as to the admissibility of evidence, objections made by either party, and the rulings of the court upon those objections.

A discussion of any possible error committed by the trial court in ruling on objections with a recommendation as to whether the verdict is substantially in excess of the plaintiff's testimony and there is error in the case but the attorney's recommendation is that no post trial action be taken, a full discussion of the reasons for such recommendation should be made.

If post trial action is taken or anticipated, and later it is decided not to appeal, a supplemental report is to be prepared and placed in the file, setting out reasons for no further action.

236.18.9 Relocation Assistance

236.18.9.1 Relocation Assistance

Sometimes land needed for a project is occupied. In such instances it may be necessary to displace the occupants. These occupants may be individuals, families, businesses, farms, or even non-profit organizations.

The term displaced person is defined in the Uniform Act as: "...any person who moves from the real property or moves his or her personal property from the real property as a direct result of an agency's written notice of intent to acquire, the initiation of negotiations for, or the acquisition of such real property in whole or in part for a project."

Occupants who qualify as displaced persons are eligible for relocation assistance advisory services, and are entitled to payment of his or her actual moving and related expenses, as the agency determined to be reasonable and necessary. In addition, residential displacees who meet minimum occupancy requirements may qualify for replacement housing or rental subsidy payments to offset increased costs of securing replacement dwellings.

The Uniform Act and Federal Highway Administration regulations prescribe certain benefits and protections for persons displaced by projects which are funded, at least in part, with Federal money. The provisions of the Uniform Act concerning relocation are found in Title II. As stated in the law, the purpose of Title II is to assure fair and equitable treatment of displaced persons so that such displaced persons do not suffer disproportionate injury from projects designed to benefit the public as a whole.

Relocation requirements are lengthy and detailed; therefore, whenever the local agency anticipates that displacements will occur, the appropriate MoDOT district right of way office should be contacted for assistance in conducting its relocation program.

236.18.10 Right of Way Clearance Certification

236.18.10.1 General

Prior to authorization to advertise the physical construction for bids, the LPA shall submit a Right of Way Clearance Certification Statement to the local MoDOT district office.

The Right Of Way Clearance Certification Statement is required for all Federally assisted projects (Federal funds participation in either right of way or construction), but only if any right of way acquisition was necessary. The statement identifies the acquisition status of necessary right of way for the purpose of advancing a project to construction. It also addresses the status of any relocation activities necessary on the project.

The LPA shall submit a clearance certification to the local MoDOT district office on the LPA's letterhead signed by appropriate official or officials. This certification, along with a monitoring report, shall be submitted to the FHWA through the MoDOT Right of Way Division office.

All jobs certified clear more than one year prior to construction letting must have an updated clearance certification issued to verify that the right of way is still clear and that there are no encumbrances of any kind and there are no rental agreements, extensions of possession or leases in effect.

236.18.10.2 When Should Clearance Certification be Submitted

Clearance certification should be submitted when all right of way has been acquired and legal and physical possession of all parcels has been obtained and relocation assistance has been made available on occupied units.

236.18.10.3 Contents of Clearance Certification

Each certification must contain the following.

A. The heading of the Certification Letter should contain the following:

date and type of environmental clearance
clearance certification for the entire project, portion of project, or conditional clearance
city and or county
road or project number
federal project number
termini of the entire right of way project
the termini by stationing of that portion of the project being cleared if it is a partial clearance certification
construction job number and termini

B. Make all of the statements depending upon type of acquisitions involved for project.

1. Right of way required - no personal property moved - no relocation assistance required

a. We certify that all necessary right of way, easements and access rights have been acquired in accordance with the Titles 49 and 23 CFR.

b. Legal and physical possession of all parcels has been obtained.

c. The steps relative to relocation advisory assistance and payments were not required.

2. Right of away required - personal property moved - no occupied improvements required

a. We certify that all necessary right of way, easements and access rights have been acquired in accordance with Titles 49 and 23 CFR.

b. Legal and physical possession of all parcels has been obtained.

c. Steps relative to relocation advisory assistance and payments as required by 49 CFR, Part 24 have been taken (personal property moved only).

3. Right of way required - personal property moved - occupied improvements acquired

a. We certify that all necessary right of way, easements and access rights have been acquired in accordance with Titles 49 and 23 CFR.

b. Legal and physical possession of all parcels has been obtained.

c. Steps relative to relocation advisory assistance and payments as required by 49 CFR, Part 24 have been taken.

All individuals and families have been relocated to or offered equivalent decent, safe and sanitary housing in accordance with 49 CFR, Part 24.

C. Required data to be submitted with clearance certification.

When a right of way project is certified clear, attach to the certification:

Total number of parcels on project that required the acquisition of right of way, easements and/or access rights.
Total number of donations. (List the parcel number, date received, and grantor's name.)
List any parcels that were voided and not appraised within the numeric beginning and ending parcel numbers as indicated on the right of way plans.
List any parcel that was appraised and subsequently voided and not acquired.

236.18.10.4 Partial Right of Way Clearance Certification

When phase construction is involved on a particular project and it is necessary to clear only a portion of an entire right of way project, all other requirements for the issuance of a clearance certification are applicable.

In order to advance portions of a total project to construction, it will be necessary to complete a right of way clearance certification statement for each construction project. A clearance statement is identified as a partial right of way clearance certification when legal and physical possession of additional right of way which was identified within the original right of way project termini, and needed in connection with future construction projects, has not yet been obtained.

The classification as a partial certification is necessary as it relates to the original right of way project number under which the LPA was authorized to acquire the necessary right of way. In these cases, the partial right of way clearance certification represents a full clearance certification for the construction project to be advertised and awarded.

236.18.10.5 Conditional Right of Way Clearance Certification

A Conditional Right Of Way Clearance Certification Statement is required when the LPA's staff has determined it necessary to advance a construction project to letting prior to obtaining legal and physical possession of all the needed right of way. The LPA may request construction authorization of this type only in very unusual circumstances. This exception must never become the rule.

Each situation is different. MoDOT district personnel are available for direct assistance to insure compliance with 49 CFR, and expedient clearance of the right of way for certification.

Clearance certifications that show exceptions must be followed by a final clearance from the MoDOT district at such time as the exceptions have been satisfied.

Any job certified clear more than one year prior to letting must be verified to determine that the job is still clear and that there are no rental agreements or leases in existence.

236.18.11 Right of Way Services Through Contract

236.18.11.1 Need

The LPA must inform the MoDOT prior to commencement of any right of way activities, whether they are adequately staffed to perform the necessary functions or if it will be necessary to utilize fee services for any of the appraisals, appraisal reviews, negotiations, or relocation services required for a project.

236.18.11.2 Procurement of Services

The procurement of services are governed by regulations issued by the Department of Transportation in 49 CFR Part 18.36 when Federal funds are to be utilized in right of way acquisition. There are two procedures that will generally apply to right of way services.

A. Small Purchase Procedures

This is the simplest and most informal procedure and applies when required services do not exceed $100,000. This procedure requires the agency to secure a proposal to furnish necessary services from an adequate number of qualified sources.

B. Competitive Negotiation

This is a more formalized procedure where the value of the services will exceed $100,000. In this procedure requests for proposals are publicized, soliciting proposals from an adequate number of qualified sources. Specifications for required services should be developed so all qualified sources are fully informed of services to be rendered, and all are submitting proposals on the same basis. Contract may be awarded to the responsible proposal submitted most advantageous to the LPA.

236.18.11.3 General Requirements for Contracts

Contracts, agreements or assignment letters for contract services shall contain as a minimum the following provisions and clauses:

Date of agreement.

The complete name and address of each party to the agreement whether individual, partnership, firm or corporation. If a corporation is one of the parties, identify the state in which it is incorporated. Where a contract is with a partnership, firm or corporation, the agreement or supplement thereto shall identify the person who will perform the contract service and, if necessary, testify in a condemnation action.

Federal-aid project number and location.

Description of the work to be done in sufficient detail to show the nature and extent of the services contemplated.

The basis of payment for the services to be furnished.

Provisions that would permit the negotiation for mutual acceptance of major changes in the scope, character or estimated total cost of the work to be performed if such changes become necessary as the work progresses.

Provision that would permit termination of the agreement by the acquiring agency in case the contractor is not complying with the terms of the agreement, the progress or quality of work is unsatisfactory, or for other stated reasons. Provision covering the ownership of work completed or partially completed and basis of payment therefore in the event of termination of the agreement by the acquiring agency.

Provisions for a procedure to resolve any dispute concerning a question of fact in connection with the work not disposed of by agreement between the parties, conforming to the practice followed by the acquiring agency in resolving disputes in other contractual matters.

An expressed prohibition against the subletting or transfer of any of the work except as is otherwise provided for in the agreement.

The clauses set forth in Appendix A of the Civil Rights Assurances.

Properly executed signature and dates.

236.18.11.4 Contract for Fee Appraisal

A. General Requirements

1. The MoDOT district office may approve the use of a fee appraiser when it has been determined the local agency is not adequately staffed to perform this service.

2. Individuals proposed and used to establish estimates of just compensation shall be on the Roster of Approved Contract Appraisers that is updated annually.

3. Appraisal work will be performed under the requirements described in EPG 236.18.7.

4. Fee personnel shall be retained directly by the acquiring agency and required, by written contract, to personally perform the services contracted for, except as hereinafter provided. When services of a highly specialized nature are required to assist in the preparation of the appraisal, the employment of specialists should be handled by the acquiring agency. The contract appraiser responsible for the appraisal of the entire property may accomplish this employment. If the latter course is followed, the LPA shall reserve to itself the approval of the selection of the specialist by the contract appraiser.

5. The basis of payment set forth in the agreement covering more than one parcel shall not be computed on an average rate per parcel. The agreement shall itemize the actual amount to be paid per parcel, or such itemization shall be by a separate statement.

6. Provision shall be made in the agreement for a per diem rate to be paid to the fee appraiser or specialist in the event court appearances or conferences preparatory thereto become necessary. This contingent cost shall be separate and apart from the fee or the overall limit specified in the agreement for completion of the services covered by the agreement.

7. There shall be no federal reimbursement for compensation paid by a LPA for revision or correction of a report required by the appraiser or specialist failure to comply with contract specifications and standards in the agreement.

8. There shall be no federal participation in the appraisal or specialist fee or the amount paid for a parcel where the appraisal or specialist fee is determined as a percentage of the appraised value or assessed value.

9. The amount of the fee shall represent a fair payment for the services performed whether it is for the initial valuation, a new valuation occasioned by a change in the taking, or a subsequent updating requested by the LPA. In the instance of a new valuation or updating, a flat percentage of the original fee is not acceptable as representative of fair payment. Experience of the LPA and any other available guides should be considered in arriving at an equitable fee. A qualified individual from the LPA's right of way organization should visit the project site to identify the valuation problem, determine the number and type of reports needed. The estimate shall be made prior to requesting a proposal from fee personnel and shall be retained in the LPA's file. A predetermined schedule of fees for different types of properties may be utilized provided documentation to support such schedule(s) is available in the LPA's files. In determining the basis of payment and the actual fees to be paid, consideration should be given to:

The complexity of the appraisal or other work to be undertaken and the skills necessary to provide such services.

The number of parcels included in the assignment.

The amount of information and data provided fee personnel by the acquiring agency, and the extent of information that must be developed independently.

The location and conditions pertinent to the project for which the fee service is to be provided.

The time allowed for performance of the assignment.

B. Approval of Contract

The MoDOT district office has the authority to approve contracts and issue notice to proceed with appraisal work providing that (1) contract form substantially complies with requirements of this section, and (2) contract is with a qualified appraiser.

A sample contract for fee appraisal services is available. Contact the MoDOT district office for assistance, if necessary.

236.18.11.5 Contract Fee Review Appraiser

A. General Requirements

1. The MoDOT district office may approve the use of a fee review appraiser when it has been determined the local agency is not adequately staffed to perform this service.

2. Individuals proposed and used to approve just compensation shall be on the Roster of Approved Contract Appraisers that is updated annually. The Roster lists individuals who are generally qualified to perform the review function. Other individuals on the Roster may be approved to review for individual projects.

3. Appraisal review work will be performed under the requirements described in EPG 236.18.7.

4. Amounts established by Contract Review Appraisers as the estimate of just compensation must be approved by an appropriate official of the responsible LPA prior to the initiation of negotiation. This function cannot be delegated to contract review appraisers or consultants.

5. The employment of fee review appraisers shall be by written contract.

6. The amount of the fee set forth in the contract should be established on a per appraisal basis and shall not be computed on an average rate per appraisal nor determined as a percentage of the appraised, concluded or assessed value.

7. The appraisal review fee shall represent fair payment for the work performance whether it is for the initial estimate of just compensation (EJC) a new EJC occasioned by a change in the taking or a subsequent updating requested by the acquiring agency. A flat percentage of the original fee is not acceptable for a new EJC or updating. An estimated fee per appraisal should be developed by a qualified individual or from other available information before requesting a proposal(s) from qualified fee personnel. The estimated fees shall serve as a basis for negotiating the fee to be paid under the contract. Competitive solicitation of bids may also be used as an alternative procedure where there are a sufficient number of qualified fee personnel available to constitute a competitive environment.

8. Provision shall be made in the agreement for a per diem rate to be paid to the review appraiser in the event court appearances or conferences preparatory thereto become necessary. This contingent cost shall be separate and apart from the fee or the overall limit specified in the agreement for completion of the services covered by the agreement.

9. There shall be no federal reimbursement for compensation paid by a LPA for revision or correction of a review report required by the reviewer's failure to comply with contract specifications and standards in the agreement.

B. Approval of Contract

The MoDOT district office has the authority to approve contracts and issue notice to proceed with appraisal review providing that (1) contract form substantially complies with requirements of this section, and (2) contract is with a qualified appraiser capable of appraisal review.

A sample contract for contract fee review appraiser is available.

236.18.11.6 Contract Fee Negotiator

A. General Requirements

1. Employment of fee negotiators shall be only by written contract, and approved through the Right of Way Division.

2. The amount of the fee shall be determined on a parcel basis, and shall not be determined as a percentage of fair market value. The fee shall represent a fair payment for the work performed.

3. Provision shall be made in the contract for a per diem rate to be paid to the negotiator in the event court appearances or conferences preparatory thereto become necessary. This contingent costs shall be separate and apart from the fee on the overall limit specified in the contract for completion of services covered by the contract.

4. Fees may be proposed on an hourly rate plus mileage, but a maximum project total must also be included in the proposal.

B. Approval of Contract

Right of Way Division office must approve contracts with Fee Negotiators. In this approval process, the Division office will examine the qualifications of the proposed fee negotiator.

A sample contract for fee negotiator services is available.

236.18.11.7 Contract for Total Right of Way Services

A. General Requirements

1. A LPA may elect to obtain fee services for total right of way services or combination of services from qualified contractors.

2. The MoDOT district office shall make a determination that the local agency is not staffed to perform the required services.

3. The MoDOT district office must examine the qualifications of contractors to determine their capability to perform the services to be contracted.

B. Approval of Contract

Contact the local MoDOT district office for specific instructions.

The contract form for services being contracted shall incorporate all applicable requirements and contract provisions from this section. The MoDOT Right of Way Division office must approve the contract. In this approval process, the Division office will examine the qualifications of the proposed fee negotiators and other agents.

236.18.11.8 Contracting With Engineering Consultants for Right of Way Services

A. General Requirements

1. A LPA may provide for right of way services through an engineering contract whereby the engineering firm is adequately staffed with qualified personnel to perform the various right of way functions. The engineering firm may also subcontract for all or part of the right of way functions from qualified sources.

2. The MoDOT district office shall first make a determination that the LPA is not staffed to perform the necessary right of way services. The MoDOT district office shall also determine if the engineering firm is adequately staffed with qualified personnel to perform right of way services or that proposed subcontractors performing these services are qualified.

B. Contract and Subcontract Requirements

Engineering consultant contracts and subcontractors providing for right of way services shall incorporate all applicable requirements and contract provisions described in this article.

C. Approval of Contracts

1. In the case of contracts and subcontracts the MoDOT Right of Way Division office must approve the contract. In this approval process, the Division office will examine the qualifications of the proposed fee negotiators and other agents. The Division will also determine if:

subcontract form substantially complies with applicable portions of EPG 236, and
subcontract is with an individual or individuals satisfying approved qualification requirements for the work to be performed.

2. The LPA and its consultant will be advised of contract approval and issue notice to proceed with proposed work. The MoDOT district office has the authority to issue notice to proceed with proposed work.

236.18.12 Property Management

236.18.12.1 General

By definition, property management is managing and administering property acquired for construction project purposes so that the public interest is served. The LPA is responsible for ensuring adequate control and effective administration of lands and improvements acquired for right of way purposes.

The LPA responsible for property management must handle such activities in a manner consistent with Federal and State requirements. The LPA program should be carried out in a manner that assures the maximum public benefit.

Just as any privately operated management firm, the acquiring agency is responsible for the preservation of improvements and for the reasonable safety measures relative to the preservation of the acquired property and protection of lawful occupants when it has acquired ownership and possession of property.

236.18.12.2 Property Management During the Acquisition Phase

The LPA is responsible for the preservation of improvements and the implementation of safety measures on cleared right of way until needed for construction.

The LPA must maintain an inventory of all improvements acquired, how these improvements are disposed of, an accounting of management expenses and rental receipts received and recovery payments for disposition of improvements and rodent control.

Income from rents received during the acquisition phase of the project, are credited against project costs.

236.18.12.3 Post-Construction Property Management

A. Disposal of Property

Disposal of right of way no longer required in a Federal-aid project after clearance certification requires specific MoDOT approval. Value is to be determined by the appraisal process. Disposition may be by public sale or negotiations depending on the situation. The net proceeds from any disposal must be used on projects eligible for funding as provided in 23 USC.

If a roadway will be relinquished to a local public transportation authority, with the intent that it continues to be used as a public roadway, see EPG 236.5.12.2 Road Relinquishment Utilities for further guidance.

Proposed roadway relinquishments to private entities shall be reviewed in a manner consistent with the conveyance of excess property described in EPG 236.5.12.1 Excess Land Conveyances Utilities.

If uneconomic remnants, were acquired with Federal funds participation, the Federal share must be refunded when the remnant is sold.

B. Leasing

1. Leasing of Airspace, Land or Right of Way

Property located within the right of way lines of a project is considered to be right of way airspace. Federal regulations require that the LPA charge fair market value for the sale, use, lease, or lease renewals of right of way airspace that was acquired in whole or in part with Federal assistance.

Regulations provide for use of airspace for non-highway purposes above, at, or below the highways established grade line. Airspace can be put to both public and private uses such as parks, parking etc. When a LPA contemplates use of airspace they must consult with the MoDOT district office for guidance. Specific approval from MoDOT is required and rates for leasing airspace are to be determined based upon fair market rental rates.

Net income from funds derived from leasing of airspace is to be used on future Federal-aid projects eligible for funding as provided in 23 USC.

If right of way and/or uneconomic remnants were acquired with Federal funds participation, the Federal share must be refunded when the remnant is leased.

2. Leasing of Excess Right of Way

Acquired property located outside of the right of way limits and that is no longer needed in connection with maintaining an existing roadway or for construction of a future project is considered to be excess ROW. Federal regulations require that properties purchased with Federal assistance, but not directly need for program purposes, be disposed of as soon as practical. Federal regulations require that the LPA charge fair market value for the sale or lease of this property.

The LPA will need to obtain MoDOT approval to lease or sell right of way. The LPA’s request to MoDOT must explain why the right of way is no longer needed, and include a plan that identifies the right of way to be disposed of, including access control, in relation to the construction features and remaining right of way.

It must be emphasized that the release of access control is a disposal of a property right and must be treated accordingly.

The fair market value is to be determined by the appraisal process. Disposition may be by public sale or negotiations depending on the situation. Net income from funds derived from leasing of airspace is to be used on future Federal-aid projects eligible for funding as provided in 23 USC.

@@ Line 67: / Line 67: @@
 |[[media:236.18 Right of Way Clearance Certification Statement (21).doc|Right of Way Clearance Certification Statement (Form 21)]]
 |-
-|[[media:236.6 Statewide Fee Appraiser List Jun 2 2010.pdf|Roster of Approved Contract Appraisers]]
+|[[media:236.6 Statewide Fee Appraiser List Jun 7 2010.pdf|Roster of Approved Contract Appraisers]]
 |-
 |[[media:236.18 Special Appraisal Considerations (12).doc|Special Appraisal Considerations (Form 12)]]
@@ Line 505: / Line 505: @@
 An appraisal review is a technical review of an appraisal report, and is a critical quality control element in the valuation/acquisition process.  An appraisal review is not an arithmetic or grammatical review of an appraisal report.  It is a comprehensive technical examination of the appraisal, as reported by an appraiser.  If for any reason the reviewing appraiser believes that the appraisal is patently lacking in any important detail, he/she should request the appraiser to make corrections or furnish such additional support and documentation that may be required.  Written communication should be utilized wherever practical.  (See, [[media:236.18 Instructions for Appraisal Review (14).doc|Instructions for Appraisal Review]] and [[media:236.6.4.3 Appraisal Review and Approval of Just Comparison (Form 6.4.3).doc|Appraisal Review and Approval of Just Compensation form]]).
-A review appraiser must be a certified appraiser who is familiar with the type of appraisal problem being reviewed and the techniques required to address that problem.  The review appraiser must also be completely familiar with the MoDOT appraisal and other relevant requirements, and be listed on the [[media:236.6 Statewide Fee Appraiser List Jun 2 2010.pdf|Roster of Approved Contract Appraisers]].
+A review appraiser must be a certified appraiser who is familiar with the type of appraisal problem being reviewed and the techniques required to address that problem.  The review appraiser must also be completely familiar with the MoDOT appraisal and other relevant requirements, and be listed on the [[media:236.6 Statewide Fee Appraiser List Jun 7 2010.pdf|Roster of Approved Contract Appraisers]].
 The Roster of Approved Contract Appraisers indicates those certified appraisers that are currently appropriate for use as reviewers.  Contact MoDOT’s local district office for a current roster of appraisers in the LPAs area.  Additional reviewing appraisers may be approved upon request of the MoDOT district office.
@@ Line 517: / Line 517: @@
 Negotiations shall be conducted by someone other than the appraiser or reviewing appraiser of the real property to be acquired, except that the acquiring agency may permit the same person to value and negotiate an acquisition where the value is $10,000 or less.  However, the valuation must be reviewed and an amount approved by another designated agency official before the initiation of negotiations.
-The appraiser that made the appraisal may not review appraisals prepared by LPA staff.  A member of the same firm as the contract appraiser may not review appraisals prepared by a contract appraiser.  The [[media:236.6 Statewide Fee Appraiser List Jun 2 2010.pdf|Roster of Approved Contract Appraisers]] indicates those fee appraisers qualified to perform the Review function.  Additional review appraisers may be approved upon request of the MoDOT district office.
+The appraiser that made the appraisal may not review appraisals prepared by LPA staff.  A member of the same firm as the contract appraiser may not review appraisals prepared by a contract appraiser.  The [[media:236.6 Statewide Fee Appraiser List Jun 7 2010.pdf|Roster of Approved Contract Appraisers]] indicates those fee appraisers qualified to perform the Review function.  Additional review appraisers may be approved upon request of the MoDOT district office.
 '''Delivery of Payments'''
@@ Line 539: / Line 539: @@
 '''B. Fee Appraisers Must Be On Roster Of Approved Contract Appraisers'''
-The selection of fee appraisers should be based upon the qualification level and experience necessary for the type of appraisals to be encountered.  The selected appraiser must appear on the [[media:236.6 Statewide Fee Appraiser List Jun 2 2010.pdf|Roster of Approved Contract Appraisers]], which is updated annually by MoDOT.  The MoDOT district office can approve the use of additional fee appraisers.
+The selection of fee appraisers should be based upon the qualification level and experience necessary for the type of appraisals to be encountered.  The selected appraiser must appear on the [[media:236.6 Statewide Fee Appraiser List Jun 7 2010.pdf|Roster of Approved Contract Appraisers]], which is updated annually by MoDOT.  The MoDOT district office can approve the use of additional fee appraisers.
 '''C. State Certification Required'''
@@ Line 557: / Line 557: @@
 '''C. Fee Review Appraisers Must Be On Roster of Approved Contract Appraisers'''
-The [[media:236.6 Statewide Fee Appraiser List Jun 2 2010.pdf|Roster of Approved Contract Appraisers]] lists appraisers who are generally qualified for all review responsibilities.  Appraisers that are not indicated as a “Review Appraiser” may be appropriate for review responsibilities for some projects.
+The [[media:236.6 Statewide Fee Appraiser List Jun 7 2010.pdf|Roster of Approved Contract Appraisers]] lists appraisers who are generally qualified for all review responsibilities.  Appraisers that are not indicated as a “Review Appraiser” may be appropriate for review responsibilities for some projects.
 '''D. State Certification Required'''
@@ Line 813: / Line 813: @@
 :1. The MoDOT district office may approve the use of a fee appraiser when it has been determined the local agency is not adequately staffed to perform this service.
-:2. Individuals proposed and used to establish estimates of just compensation shall be on the [[media:236.6 Statewide Fee Appraiser List Jun 2 2010.pdf|Roster of Approved Contract Appraisers]] that is updated annually.
+:2. Individuals proposed and used to establish estimates of just compensation shall be on the [[media:236.6 Statewide Fee Appraiser List Jun 7 2010.pdf|Roster of Approved Contract Appraisers]] that is updated annually.
 :3. Appraisal work will be performed under the requirements described in [[236.18 Local Public Agency Land Acquisition#236.18.7 Property Valuation|EPG 236.18.7]].
@@ Line 851: / Line 851: @@
 :1. The MoDOT district office may approve the use of a fee review appraiser when it has been determined the local agency is not adequately staffed to perform this service.
-:2. Individuals proposed and used to approve just compensation shall be on the [[media:236.6 Statewide Fee Appraiser List Jun 2 2010.pdf|Roster of Approved Contract Appraisers]] that is updated annually.  The Roster lists individuals who are generally qualified to perform the review function.  Other individuals on the Roster may be approved to review for individual projects.
+:2. Individuals proposed and used to approve just compensation shall be on the [[media:236.6 Statewide Fee Appraiser List Jun 7 2010.pdf|Roster of Approved Contract Appraisers]] that is updated annually.  The Roster lists individuals who are generally qualified to perform the review function.  Other individuals on the Roster may be approved to review for individual projects.
 :3. Appraisal review work will be performed under the requirements described in [[236.18 Local Public Agency Land Acquisition#236.18.7 Property Valuation|EPG 236.18.7]].

LPA:136.8 Local Public Agency Land Acquisition: Difference between revisions

Revision as of 10:01, 8 June 2010

236.18.1 General

236.18.1.1 Introduction

236.18.1.2 State Responsibility

236.18.1.3 Local Public Agency’s Responsibility

236.18.1.4 MoDOT Right of Way Procedures

236.18.1.5 Local Public Agency Right of Way Acquisition Brochure

236.18.2 Funding Procedures

236.18.2.1 No Federal Funds Participation in Any Part of the Project

236.18.2.2 Pre-Acquisition Requirements With Federal Funds Participation in Any Part of The Project (Right of Way or Construction)

236.18.2.3 Request for Notice to Proceed with Federal Funds in Construction but NOT in Right of Way

236.18.2.4 Acquisition Authority (A-Date) is Required with Federal Funds Participation in Right of Way

236.18.2.5 Costs Eligible for Reimbursement Before Receipt of an A-Date

236.18.2.6 Costs Eligible For Reimbursement After Receipt Of An A-date:

236.18.2.8 Inspection of Documents

236.18.2.9 Federal Project Number

236.18.3 State Monitoring

236.18.3.1 State Monitoring

236.18.4 Retention and Access to Records

236.18.4.1 Retention and Access to Records

236.18.5 Plans and Title Information

236.18.5.1 Plans

236.18.5.2 Title Information

236.18.6 Acquisition

236.18.6.1 Negotiations to Acquire Real Property

236.18.6.2 Donation of Right of Way

236.18.6.3 Dedications

236.18.6.4 Assessments

236.18.6.5 Negotiator Qualifications

236.18.7 Property Valuation

236.18.7.1 General

236.18.7.2 Analysis of Appraisal Problems and Format Recommendations (Fee Study)

236.18.7.3 Appraisal Report Formats

236.18.7.4 Sale Forms

236.18.7.5 Appraiser's Certification

236.18.7.6 "Caution" If Condemnation is Required

236.18.7.7 Appraisal Review

236.18.7.8 Appraiser Qualifications

236.18.7.9 Review Appraiser Qualifications

236.18.8 Acquisition Through Eminent Domain

236.18.8.1 General

236.18.8.2 Documentation of Legal Actions

236.18.8.3 Use of a Fee Attorney or Special Counsel

236.18.8.4 Federal Participation in Costs of Staff Attorneys

236.18.8.5 Preparation of Justification for Legal Settlements

236.18.8.6 Trial Reports

236.18.9 Relocation Assistance

236.18.9.1 Relocation Assistance

236.18.10 Right of Way Clearance Certification

236.18.10.1 General

236.18.10.2 When Should Clearance Certification be Submitted

236.18.10.3 Contents of Clearance Certification

236.18.10.4 Partial Right of Way Clearance Certification

236.18.10.5 Conditional Right of Way Clearance Certification

236.18.11 Right of Way Services Through Contract

236.18.11.1 Need

236.18.11.2 Procurement of Services

236.18.11.3 General Requirements for Contracts

236.18.11.4 Contract for Fee Appraisal

236.18.11.5 Contract Fee Review Appraiser

236.18.11.6 Contract Fee Negotiator

236.18.11.7 Contract for Total Right of Way Services

236.18.11.8 Contracting With Engineering Consultants for Right of Way Services

236.18.12 Property Management

236.18.12.1 General

236.18.12.2 Property Management During the Acquisition Phase

236.18.12.3 Post-Construction Property Management

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