Appendix A to Part 24 - Additional Information
49:1.0.1.1.17.9.3.1.9 : Appendix A
Appendix A to Part 24 - Additional Information
This appendix provides additional information to explain the
intent of certain provisions of this part.
Subpart A - General
Section 24.2 Definitions and Acronyms
Section 24.2(a)(6) Definition of comparable replacement
dwelling. The requirement in § 24.2(a)(6)(ii) that a comparable
replacement dwelling be “functionally equivalent” to the
displacement dwelling means that it must perform the same function,
and provide the same utility. While it need not possess every
feature of the displacement dwelling, the principal features must
be present.
For example, if the displacement dwelling contains a pantry and
a similar dwelling is not available, a replacement dwelling with
ample kitchen cupboards may be acceptable. Insulated and heated
space in a garage might prove an adequate substitute for basement
workshop space. A dining area may substitute for a separate dining
room. Under some circumstances, attic space could substitute for
basement space for storage purposes, and vice versa.
Only in unusual circumstances may a comparable replacement
dwelling contain fewer rooms or, consequentially, less living space
than the displacement dwelling. Such may be the case when a decent,
safe, and sanitary replacement dwelling (which by definition is
“adequate to accommodate” the displaced person) may be found to be
“functionally equivalent” to a larger but very run-down substandard
displacement dwelling. Another example is when a displaced person
accepts an offer of government housing assistance and the
applicable requirements of such housing assistance program require
that the displaced person occupy a dwelling that has fewer rooms or
less living space than the displacement dwelling.
Section 24.2(a)(6)(vii). The definition of comparable
replacement dwelling requires that a comparable replacement
dwelling for a person who is not receiving assistance under any
government housing program before displacement must be currently
available on the private market without any subsidy under a
government housing program.
Section 24.2(a)(6)(ix). A public housing unit may qualify
as a comparable replacement dwelling only for a person displaced
from a public housing unit. A privately owned dwelling with a
housing program subsidy tied to the unit may qualify as a
comparable replacement dwelling only for a person displaced from a
similarly subsidized unit or public housing.
A housing program subsidy that is paid to a person (not tied to
the building), such as a HUD Section 8 Housing Voucher Program, may
be reflected in an offer of a comparable replacement dwelling to a
person receiving a similar subsidy or occupying a privately owned
subsidized unit or public housing unit before displacement.
However, nothing in this part prohibits an Agency from offering,
or precludes a person from accepting, assistance under a government
housing program, even if the person did not receive similar
assistance before displacement. However, the Agency is obligated to
inform the person of his or her options under this part. (If a
person accepts assistance under a government housing assistance
program, the rules of that program governing the size of the
dwelling apply, and the rental assistance payment under § 24.402
would be computed on the basis of the person's actual out-of-pocket
cost for the replacement housing.)
Section 24.2(a)(8)(ii) Decent, Safe and Sanitary. Many
local housing and occupancy codes require the abatement of
deteriorating paint, including lead-based paint and lead-based
paint dust, in protecting the public health and safety. Where such
standards exist, they must be honored. Even where local law does
not mandate adherence to such standards, it is strongly recommended
that they be considered as a matter of public policy.
Section 24.2(a)(8)(vii) Persons with a disability.
Reasonable accommodation of a displaced person with a disability at
the replacement dwelling means the Agency is required to address
persons with a physical impairment that substantially limits one or
more of the major life activities. In these situations, reasonable
accommodation should include the following at a minimum: Doors of
adequate width; ramps or other assistance devices to traverse
stairs and access bathtubs, shower stalls, toilets and sinks;
storage cabinets, vanities, sink and mirrors at appropriate
heights. Kitchen accommodations will include sinks and storage
cabinets built at appropriate heights for access. The Agency shall
also consider other items that may be necessary, such as physical
modification to a unit, based on the displaced person's needs.
Section 24.2(a)(9)(ii)(D) Persons not displaced.
Paragraph (a)(9)(ii)(D) of this section recognizes that there are
circumstances where the acquisition, rehabilitation or demolition
of real property takes place without the intent or necessity that
an occupant of the property be permanently displaced. Because such
occupants are not considered “displaced persons” under this part,
great care must be exercised to ensure that they are treated fairly
and equitably. For example, if the tenant-occupant of a dwelling
will not be displaced, but is required to relocate temporarily in
connection with the project, the temporarily occupied housing must
be decent, safe, and sanitary and the tenant must be reimbursed for
all reasonable out-of-pocket expenses incurred in connection with
the temporary relocation. These expenses may include moving
expenses and increased housing costs during the temporary
relocation. Temporary relocation should not extend beyond one year
before the person is returned to his or her previous unit or
location. The Agency must contact any residential tenant who has
been temporarily relocated for a period beyond one year and offer
all permanent relocation assistance. This assistance would be in
addition to any assistance the person has already received for
temporary relocation, and may not be reduced by the amount of any
temporary relocation assistance.
Similarly, if a business will be shut-down for any length of
time due to rehabilitation of a site, it may be temporarily
relocated and reimbursed for all reasonable out of pocket expenses
or must be determined to be displaced at the Agency's option.
Any person who disagrees with the Agency's determination that he
or she is not a displaced person under this part may file an appeal
in accordance with 49 CFR part 24.10 of this regulation.
Section 24.2(a)(11) Dwelling Site. This definition
ensures that the computation of replacement housing payments are
accurate and realistic (a) when the dwelling is located on a larger
than normal site, (b) when mixed-use properties are acquired, (c)
when more than one dwelling is located on the acquired property, or
(d) when the replacement dwelling is retained by an owner and moved
to another site.
Section 24.2(a)(14) Household income (exclusions).
Household income for purposes of this regulation does not include
program benefits that are not considered income by Federal law such
as food stamps and the Women Infants and Children (WIC) program.
For a more detailed list of income exclusions see Federal Highway
Administration, Office of Real Estate Services Web site:
http://www.fhwa.dot.gov/realestate/. (FR 4644-N-16 page
20319 Updated.) If there is a question on whether or not to include
income from a specific program contact the Federal Agency
administering the program.
Section 24(a)(15) Initiation of negotiations. This
section provides a special definition for acquisition and
displacements under Pub. L. 96-510 or Superfund. The order of
activities under Superfund may differ slightly in that temporary
relocation may precede acquisition. Superfund is a program designed
to clean up hazardous waste sites. When such a site is discovered,
it may be necessary, in certain limited circumstances, to alert
individual owners and tenants to potential health or safety threats
and to offer to temporarily relocate them while additional
information is gathered. If a decision is later made to permanently
relocate such persons, those who had been temporarily relocated
under Superfund authority would no longer be on site when a formal,
written offer to acquire the property was made, and thus would lose
their eligibility for a replacement housing payment. In order to
prevent this unfair outcome, we have provided a definition of
initiation of negotiation, which is based on the date the Federal
Government offers to temporarily relocate an owner or tenant from
the subject property.
Section 24.2(a)(15)(iv) Initiation of negotiations
(Tenants.) Tenants who occupy property that may be acquired
amicably, without recourse to the use of the power of eminent
domain, must be fully informed as to their eligibility for
relocation assistance. This includes notifying such tenants of
their potential eligibility when negotiations are initiated,
notifying them if they become fully eligible, and, in the event the
purchase of the property will not occur, notifying them that they
are no longer eligible for relocation benefits. If a tenant is not
readily accessible, as the result of a disaster or emergency, the
Agency must make a good faith effort to provide these notifications
and document its efforts in writing.
Section 24.2(a)(17) Mobile home. The following examples
provide additional guidance on the types of mobile homes and
manufactured housing that can be found acceptable as comparable
replacement dwellings for persons displaced from mobile homes. A
recreational vehicle that is capable of providing living
accommodations may be considered a replacement dwelling if the
following criteria are met: the recreational vehicle is purchased
and occupied as the “primary” place of residence; it is located on
a purchased or leased site and connected to or have available all
necessary utilities for functioning as a housing unit on the date
of the displacing Agency's inspection; and, the dwelling, as sited,
meets all local, State, and Federal requirements for a decent, safe
and sanitary dwelling. (The regulations of some local jurisdictions
will not permit the consideration of these vehicles as decent, safe
and sanitary dwellings. In those cases, the recreational vehicle
will not qualify as a replacement dwelling.)
For HUD programs, mobile home is defined as “a structure,
transportable in one or more sections, which, in the traveling
mode, is eight body feet or more in width or forty body feet or
more in length, or, when erected on site, is three hundred or more
square feet, and which is built on a permanent chassis and designed
to be used as a dwelling with or without a permanent foundation
when connected to the required utilities and includes the plumbing,
heating, air-conditioning, and electrical systems contained
therein; except that such terms shall include any structure which
meets all the requirements of this paragraph except the size
requirements and with respect to which the manufacturer voluntarily
files a certification required by the Secretary of HUD and complies
with the standards established under the National Manufactured
Housing Construction and Safety Standards Act, provided by Congress
in the original 1974 Manufactured Housing Act.” In 1979 the term
“mobile home” was changed to “manufactured home.” For purposes of
this regulation, the terms mobile home and manufactured home are
synonymous.
When assembled, manufactured homes built after 1976 contain no
less than 320 square feet. They may be single or multi-sectioned
units when installed. Their designation as personalty or realty
will be determined by State law. When determined to be realty, most
are eligible for conventional mortgage financing.
The 1976 HUD standards distinguish manufactured homes from
factory-built “modular homes” as well as conventional or
“stick-built” homes. Both of these types of housing are required to
meet State and local construction codes.
Section 24.3 No Duplication of Payments. This section
prohibits an Agency from making a payment to a person under these
regulations that would duplicate another payment the person
receives under Federal, State, or local law. The Agency is not
required to conduct an exhaustive search for such other payments;
it is only required to avoid creating a duplication based on the
Agency's knowledge at the time a payment is computed.
Subpart B - Real Property Acquisition
Federal Agencies may find that, for Federal eminent domain
purposes, the terms “fair market value” (as used throughout this
subpart) and “market value,” which may be the more typical term in
private transactions, may be synonymous.
Section 24.101(a) Direct Federal program or project. All
49 CFR Part 24 Subpart B (real property acquisition) requirements
apply to all direct acquisitions for Federal programs and projects
by Federal Agencies, except for acquisitions undertaken by the
Tennessee Valley Authority or the Rural Utilities Service. There
are no exceptions for “voluntary transactions.”
Section 24.101(b)(1)(i). The term “general geographic
area” is used to clarify that the “geographic area” is not to be
construed to be a small, limited area.
Sections 24.101(b)(1)(iv) and (2)(ii). These sections
provide that, for programs and projects receiving Federal financial
assistance described in §§ 24.101(b)(1) and (2), Agencies are to
inform the owner(s) in writing of the Agency's estimate of the fair
market value for the property to be acquired.
While this part does not require an appraisal for these
transactions, Agencies may still decide that an appraisal is
necessary to support their determination of the market value of
these properties, and, in any event, Agencies must have some
reasonable basis for their determination of market value. In
addition, some of the concepts inherent in Federal Program
appraisal practice are appropriate for these estimates. It would be
appropriate for Agencies to adhere to project influence
restrictions, as well as guard against discredited “public interest
value” valuation concepts.
After an Agency has established an amount it believes to be the
market value of the property and has notified the owner of this
amount in writing, an Agency may negotiate freely with the owner in
order to reach agreement. Since these transactions are voluntary,
accomplished by a willing buyer and a willing seller, negotiations
may result in agreement for the amount of the original estimate, an
amount exceeding it, or for a lesser amount. Although not required
by the regulations, it would be entirely appropriate for Agencies
to apply the administrative settlement concept and procedures in §
24.102(i) to negotiate amounts that exceed the original estimate of
market value. Agencies shall not take any coercive action in order
to reach agreement on the price to be paid for the property.
Section 24.101(c) Less-than-full-fee interest in real
property. This provision provides a benchmark beyond which the
requirements of the subpart clearly apply to leases.
Section 24.102(c)(2) Appraisal, waiver thereof, and
invitation to owner. The purpose of the appraisal waiver
provision is to provide Agencies a technique to avoid the costs and
time delay associated with appraisal requirements for low-value,
non-complex acquisitions. The intent is that non-appraisers make
the waiver valuations, freeing appraisers to do more sophisticated
work.
The Agency employee making the determination to use the
appraisal waiver process must have enough understanding of
appraisal principles to be able to determine whether or not the
proposed acquisition is low value and uncomplicated.
Waiver valuations are not appraisals as defined by the Uniform
Act and these regulations; therefore, appraisal performance
requirements or standards, regardless of their source, are not
required for waiver valuations by this rule. Since waiver
valuations are not appraisals, neither is there a requirement for
an appraisal review. However, the Agency must have a reasonable
basis for the waiver valuation and an Agency official must still
establish an amount believed to be just compensation to offer the
property owner(s).
The definition of “appraisal” in the Uniform Act and appraisal
waiver provisions of the Uniform Act and these regulations are
Federal law and public policy and should be considered as such when
determining the impact of appraisal requirements levied by
others.
Section 24.102(d) Establishment of offer of just
compensation. The initial offer to the property owner may not
be less than the amount of the Agency's approved appraisal, but may
exceed that amount if the Agency determines that a greater amount
reflects just compensation for the property.
Section 24.102(f) Basic negotiation procedures. An offer
should be adequately presented to an owner, and the owner should be
properly informed. Personal, face-to-face contact should take
place, if feasible, but this section does not require such contact
in all cases.
This section also provides that the property owner be given a
reasonable opportunity to consider the Agency's offer and to
present relevant material to the Agency. In order to satisfy this
requirement, Agencies must allow owners time for analysis, research
and development, and compilation of a response, including perhaps
getting an appraisal. The needed time can vary significantly,
depending on the circumstances, but thirty (30) days would seem to
be the minimum time these actions can be reasonably expected to
require. Regardless of project time pressures, property owners must
be afforded this opportunity.
In some jurisdictions, there is pressure to initiate formal
eminent domain procedures at the earliest opportunity because
completing the eminent domain process, including gaining possession
of the needed real property, is very time consuming. These
provisions are not intended to restrict this practice, so long as
it does not interfere with the reasonable time that must be
provided for negotiations, described above, and the Agencies adhere
to the Uniform Act ban on coercive action (section 301(7) of the
Uniform Act).
If the owner expresses intent to provide an appraisal report,
Agencies are encouraged to provide the owner and/or his/her
appraiser a copy of Agency appraisal requirements and inform them
that their appraisal should be based on those requirements.
Section 24.102(i) Administrative settlement. This section
provides guidance on administrative settlement as an alternative to
judicial resolution of a difference of opinion on the value of a
property, in order to avoid unnecessary litigation and congestion
in the courts.
All relevant facts and circumstances should be considered by an
Agency official delegated this authority. Appraisers, including
review appraisers, must not be pressured to adjust their estimate
of value for the purpose of justifying such settlements. Such
action would invalidate the appraisal process.
Section 24.102(j) Payment before taking possession. It is
intended that a right-of-entry for construction purposes be
obtained only in the exceptional case, such as an emergency
project, when there is no time to make an appraisal and purchase
offer and the property owner is agreeable to the process.
Section 24.102(m) Fair rental. Section 301(6) of the
Uniform Act limits what an Agency may charge when a former owner or
previous occupant of a property is permitted to rent the property
for a short term or when occupancy is subject to termination by the
Agency on short notice. Such rent may not exceed “the fair rental
value of the property to a short-term occupier.” Generally, the
Agency's right to terminate occupancy on short notice (whether or
not the renter also has that right) supports the establishment of a
lesser rental than might be found in a longer, fixed-term
situation.
Section 24.102(n) Conflict of interest. The overall
objective is to minimize the risk of fraud while allowing Agencies
to operate as efficiently as possible. There are three parts to
this provision.
The first provision is the prohibition against having any
interest in the real property being valued by the appraiser (for an
appraisal), the valuer (for a waiver estimate) or the review
appraiser (for an appraisal review.)
The second provision is that no person functioning as a
negotiator for a project or program can supervise or formally
evaluate the performance of any appraiser or review appraiser
performing appraisal or appraisal review work for that project or
program. The intent of this provision is to ensure
appraisal/valuation independence and to prevent inappropriate
influence. It is not intended to prevent Agencies from providing
appraisers/valuers with appropriate project information and
participating in determining the scope of work for the appraisal or
valuation. For a program or project receiving Federal financial
assistance, the Federal funding Agency may waive this requirement
if it would create a hardship for the Agency. The intent is to
accommodate Federal-aid recipients that have a small staff where
this provision would be unworkable.
The third provision is to minimize situations where
administrative costs exceed acquisition costs. Section 24.102(n)
also provides that the same person may prepare a valuation estimate
(including an appraisal) and negotiate that acquisition, if the
valuation estimate amount is $10,000 or less. However, it should be
noted that this exception for properties valued at $10,000 or less
is not mandatory, e.g., Agencies are not required to use
those who prepare a waiver valuation or appraisal of $10,000 or
less to negotiate the acquisition, and, all appraisals must be
reviewed in accordance with § 24.104. This includes appraisals of
real property valued at $10,000 or less.
Section 24.103 Criteria for Appraisals. The term
“requirements” is used throughout this section to avoid confusion
with The Appraisal Foundation's Uniform Standards of Professional
Appraisal Practice (USPAP) “standards.” Although this section
discusses appraisal requirements, the definition of “appraisal”
itself at § 24.2(a)(3) includes appraisal performance requirements
that are an inherent part of this section.
The term “Federal and federally-assisted program or project” is
used to better identify the type of appraisal practices that are to
be referenced and to differentiate them from the private sector,
especially mortgage lending, appraisal practice.
Section 24.103(a) Appraisal requirements. The first
sentence instructs readers that requirements for appraisals for
Federal and federally-assisted programs or projects are located in
49 CFR part 24. These are the basic appraisal requirements for
Federal and federally-assisted programs or projects. However,
Agencies may enhance and expand on them, and there may be specific
project or program legislation that references other appraisal
requirements.
These appraisal requirements are necessarily designed to comply
with the Uniform Act and other Federal eminent domain based
appraisal requirements. They are also considered to be consistent
with Standards Rules 1, 2, and 3 of the 2004 edition of the USPAP.
Consistency with USPAP has been a feature of these appraisal
requirements since the beginning of USPAP. This “consistent”
relationship was more formally recognized in OMB Bulletin 92-06.
While these requirements are considered consistent with USPAP,
neither can supplant the other; their provisions are neither
identical, nor interchangeable. Appraisals performed for Federal
and federally-assisted real property acquisition must follow the
requirements in this regulation. Compliance with any other
appraisal requirements is not the purview of this regulation. An
appraiser who is committed to working within the bounds of USPAP
should recognize that compliance with both USPAP and these
requirements may be achieved by using the Supplemental Standards
Rule and the Jurisdictional Exception Rule of USPAP, where
applicable.
The term “scope of work” defines the general parameters of the
appraisal. It reflects the needs of the Agency and the requirements
of Federal and federally-assisted program appraisal practice. It
should be developed cooperatively by the assigned appraiser and an
Agency official who is competent to both represent the Agency's
needs and respect valid appraisal practice. The scope of work
statement should include the purpose and/or function of the
appraisal, a definition of the estate being appraised, and if it is
fair market value, its applicable definition, and the assumptions
and limiting conditions affecting the appraisal. It may include
parameters for the data search and identification of the
technology, including approaches to value, to be used to analyze
the data. The scope of work should consider the specific
requirements in 49 CFR 24.103(a)(2)(i) through (v) and address them
as appropriate.
Section 24.103(a)(1). The appraisal report should
identify the items considered in the appraisal to be real property,
as well as those identified as personal property.
Section 24.103(a)(2). All relevant and reliable
approaches to value are to be used. However, where an Agency
determines that the sales comparison approach will be adequate by
itself and yield credible appraisal results because of the type of
property being appraised and the availability of sales data, it may
limit the appraisal assignment to the sales comparison approach.
This should be reflected in the scope of work.
Section 24.103(b) Influence of the project on just
compensation. As used in this section, the term “project” means
an undertaking which is planned, designed, and intended to operate
as a unit.
When the public is aware of the proposed project, project area
property values may be affected. Therefore, property owners should
not be penalized because of a decrease in value caused by the
proposed project nor reap a windfall at public expense because of
increased value created by the proposed project.
Section 24.103(d)(1). The appraiser and review appraiser
must each be qualified and competent to perform the appraisal and
appraisal review assignments, respectively. Among other
qualifications, State licensing or certification and professional
society designations can help provide an indication of an
appraiser's abilities.
Section 24.104 Review of appraisals. The term “review
appraiser” is used rather than “reviewing appraiser,” to emphasize
that “review appraiser” is a separate specialty and not just an
appraiser who happens to be reviewing an appraisal. Federal
Agencies have long held the perspective that appraisal review is a
unique skill that, while it certainly builds on appraisal skills,
requires more. The review appraiser should possess both appraisal
technical abilities and the ability to be the two-way bridge
between the Agency's real property valuation needs and the
appraiser.
Agency review appraisers typically perform a role greater than
technical appraisal review. They are often involved in early
project development. Later they may be involved in devising the
scope of work statements and participate in making appraisal
assignments to fee and/or staff appraisers. They are also mentors
and technical advisors, especially on Agency policy and
requirements, to appraisers, both staff and fee. Additionally,
review appraisers are frequently technical advisors to other Agency
officials.
Section 24.104(a). This paragraph states that the review
appraiser is to review the appraiser's presentation and analysis of
market information and that it is to be reviewed against § 24.103
and other applicable requirements, including, to the extent
appropriate, the Uniform Appraisal Standards for Federal Land
Acquisition. The appraisal review is to be a technical review by an
appropriately qualified review appraiser. The qualifications of the
review appraiser and the level of explanation of the basis for the
review appraiser's recommended (or approved) value depend on the
complexity of the appraisal problem. If the initial appraisal
submitted for review is not acceptable, the review appraiser is to
communicate and work with the appraiser to the greatest extent
possible to facilitate the appraiser's development of an acceptable
appraisal.
In doing this, the review appraiser is to remain in an advisory
role, not directing the appraisal, and retaining objectivity and
options for the appraisal review itself.
If the Agency intends that the staff review appraiser approve
the appraisal (as the basis for the establishment of the amount
believed to be just compensation), or establish the amount the
Agency believes is just compensation, she/he must be specifically
authorized by the Agency to do so. If the review appraiser is not
specifically authorized to approve the appraisal (as the basis for
the establishment of the amount believed to be just compensation),
or establish the amount believed to be just compensation, that
authority remains with another Agency official.
Section 24.104(b). In developing an independent approved
or recommended value, the review appraiser may reference any
acceptable resource, including acceptable parts of any appraisal,
including an otherwise unacceptable appraisal. When a review
appraiser develops an independent value, while retaining the
appraisal review, that independent value also becomes the approved
appraisal of the fair market value for Uniform Act Section 301(3)
purposes. It is within Agency discretion to decide whether a second
review is needed if the first review appraiser establishes a value
different from that in the appraisal report or reports on the
property.
Section 24.104(c). Before acceptance of an appraisal, the
review appraiser must determine that the appraiser's documentation,
including valuation data and analysis of that data, demonstrates
the soundness of the appraiser's opinion of value. For the purposes
of this part, an acceptable appraisal is any appraisal that, on its
own, meets the requirements of § 24.103. An approved appraisal is
the one acceptable appraisal that is determined to best fulfill the
requirement to be the basis for the amount believed to be just
compensation. Recognizing that appraisal is not an exact science,
there may be more than one acceptable appraisal of a property, but
for the purposes of this part, there can be only one approved
appraisal.
At the Agency's discretion, for a low value property requiring
only a simple appraisal process, the review appraiser's
recommendation (or approval), endorsing the appraiser's report, may
be determined to satisfy the requirement for the review appraiser's
signed report and certification.
Section 24.106(b). Expenses incidental to transfer of title
to the agency. Generally, the Agency is able to pay such
incidental costs directly and, where feasible, is required to do
so. In order to prevent the property owner from making unnecessary
out-of-pocket expenditures and to avoid duplication of expenses,
the property owner should be informed early in the acquisition
process of the Agency's intent to make such arrangements. Such
expenses must be reasonable and necessary.
Subpart C - General Relocation Requirements
Section 24.202 Applicability and Section 205(c) Services to
be provided. In extraordinary circumstances, when a displaced
person is not readily accessible, the Agency must make a good faith
effort to comply with these sections and document its efforts in
writing.
Section 24.204 Availability of comparable replacement
dwelling before displacement.
Section 24.204(a) General. This provision requires that
no one may be required to move from a dwelling without a comparable
replacement dwelling having been made available. In addition, §
24.204(a) requires that, “where possible, three or more comparable
replacement dwellings shall be made available.” Thus, the basic
standard for the number of referrals required under this section is
three. Only in situations where three comparable replacement
dwellings are not available (e.g., when the local housing
market does not contain three comparable dwellings) may the Agency
make fewer than three referrals.
Section 24.205 Relocation assistance advisory services.
Section 24.205(c)(2)(ii)(D) emphasizes that if the comparable
replacement dwellings are located in areas of minority
concentration, minority persons should, if possible, also be given
opportunities to relocate to replacement dwellings not located in
such areas.
Section 24.206 Eviction for cause. An eviction related to
non-compliance with a requirement related to carrying out a project
(e.g., failure to move or relocate when instructed, or to
cooperate in the relocation process) shall not negate a person's
entitlement to relocation payments and other assistance set forth
in this part.
Section 24.207 General Requirements-Claims for relocation
payments. Section 24.207(a) allows an Agency to make a payment
for low cost or uncomplicated nonresidential moves without
additional documentation, as long as the payment is limited to the
amount of the lowest acceptable bid or estimate, as provided for in
§ 24.301(d)(1).
While § 24.207(f) prohibits an Agency from proposing or
requesting that a displaced person waive his or her rights or
entitlements to relocation assistance and payments, an Agency may
accept a written statement from the displaced person that states
that they have chosen not to accept some or all of the payments or
assistance to which they are entitled. Any such written statement
must clearly show that the individual knows what they are entitled
to receive (a copy of the Notice of Eligibility which was provided
may serve as documentation) and their statement must specifically
identify which assistance or payments they have chosen not to
accept. The statement must be signed and dated and may not be
coerced by the Agency.
Subpart D - Payment for Moving and Related Expenses
Section 24.301. Payment for Actual Reasonable Moving and
Related Expenses.
Section 24.301(e) Personal property only. Examples of
personal property only moves might be: personal property that is
located on a portion of property that is being acquired, but the
business or residence will not be taken and can still operate after
the acquisition; personal property that is located in a
mini-storage facility that will be acquired or relocated; personal
property that is stored on vacant land that is to be acquired.
For a nonresidential personal property only move, the owner of
the personal property has the options of moving the personal
property by using a commercial mover or a self-move.
If a question arises concerning the reasonableness of an actual
cost move, the acquiring Agency may obtain estimates from qualified
movers to use as the standard in determining the payment.
Section 24.301 (g)(14)(i) and (ii). If the piece of
equipment is operational at the acquired site, the estimated cost
to reconnect the equipment shall be based on the cost to install
the equipment as it currently exists, and shall not include the
cost of code-required betterments or upgrades that may apply at the
replacement site. As prescribed in the regulation, the allowable
in-place value estimate (§ 24.301(g)(14)(i)) and moving cost
estimate (§ 24.301(g)(14)(ii)) must reflect only the “as is”
condition and installation of the item at the displacement site.
The in-place value estimate may not include costs that reflect code
or other requirements that were not in effect at the displacement
site; or include installation costs for machinery or equipment that
is not operable or not installed at the displacement site.
Section 24.301(g)(17) Searching expenses. In special
cases where the displacing Agency determines it to be reasonable
and necessary, certain additional categories of searching costs may
be considered for reimbursement. These include those costs involved
in investigating potential replacement sites and the time of the
business owner, based on salary or earnings, required to apply for
licenses or permits, zoning changes, and attendance at zoning
hearings. Necessary attorney fees required to obtain such licenses
or permits are also reimbursable. Time spent in negotiating the
purchase of a replacement business site is also reimbursable based
on a reasonable salary or earnings rate. In those instances when
such additional costs to investigate and acquire the site exceed
$2,500, the displacing Agency may consider waiver of the cost
limitation under the § 24.7, waiver provision. Such a waiver should
be subject to the approval of the Federal-funding Agency in
accordance with existing delegation authority.
Section 24.303(b) Professional Services. If a question
should arise as to what is a “reasonable hourly rate,” the Agency
should compare the rates of other similar professional providers in
that area.
Section 24.305 Fixed Payment for Moving Expenses -
Nonresidential Moves.
Section 24.305(d) Nonprofit organization. Gross revenues
may include membership fees, class fees, cash donations, tithes,
receipts from sales or other forms of fund collection that enables
the nonprofit organization to operate. Administrative expenses are
those for administrative support such as rent, utilities, salaries,
advertising, and other like items as well as fundraising expenses.
Operating expenses for carrying out the purposes of the nonprofit
organization are not included in administrative expenses. The
monetary receipts and expense amounts may be verified with
certified financial statements or financial documents required by
public Agencies.
Section 24.305(e) Average annual net earnings of a business
or farm operation. If the average annual net earnings of the
displaced business, farm, or nonprofit organization are determined
to be less than $1,000, even $0 or a negative amount, the minimum
payment of $1,000 shall be provided.
Section 24.306 Discretionary Utility Relocation Payments.
Section 24.306(c) describes the issues that the Agency and the
utility facility owner must agree to in determining the amount of
the relocation payment. To facilitate and aid in reaching such
agreement, the practices in the Federal Highway Administration
regulation, 23 CFR part 645, subpart A, Utility Relocations,
Adjustments and Reimbursement, should be followed.
Subpart E - Replacement Housing Payments
Section 24.401 Replacement Housing Payment for 180-day
Homeowner-Occupants.
Section 24.401(a)(2). An extension of eligibility may be
granted if some event beyond the control of the displaced person
such as acute or life threatening illness, bad weather preventing
the completion of construction, or physical modifications required
for reasonable accommodation of a replacement dwelling, or other
like circumstances causes a delay in occupying a decent, safe, and
sanitary replacement dwelling.
Section 24.401(c)(2)(iii) Price differential. The
provision in § 24.401(c)(2)(iii) to use the current fair market
value for residential use does not mean the Agency must have the
property appraised. Any reasonable method for arriving at the fair
market value may be used.
Section 24.401(d) Increased mortgage interest costs. The
provision in § 24.401(d) sets forth the factors to be used in
computing the payment that will be required to reduce a person's
replacement mortgage (added to the downpayment) to an amount which
can be amortized at the same monthly payment for principal and
interest over the same period of time as the remaining term on the
displacement mortgages. This payment is commonly known as the
“buydown.”
The Agency must know the remaining principal balance, the
interest rate, and monthly principal and interest payments for the
old mortgage as well as the interest rate, points and term for the
new mortgage to compute the increased mortgage interest costs. If
the combination of interest and points for the new mortgage exceeds
the current prevailing fixed interest rate and points for
conventional mortgages and there is no justification for the
excessive rate, then the current prevailing fixed interest rate and
points shall be used in the computations. Justification may be the
unavailability of the current prevailing rate due to the amount of
the new mortgage, credit difficulties, or other similar
reasons.
Old Mortgage: |
|
Remaining
Principal Balance |
$50,000 |
Monthly Payment
(principal and interest) |
$458.22 |
Interest rate
(percent) |
7 |
New Mortgage: |
|
Interest rate
(percent) |
10 |
Points |
3 |
Term
(years) |
15 |
Remaining term of the old mortgage is determined to be 174
months. Determining, or computing, the actual remaining term is
more reliable than using the data supplied by the mortgagee.
However, if it is shorter, use the term of the new mortgage and
compute the needed monthly payment.
Amount to be financed to maintain monthly payments of $458.22 at
10% = $42,010.18.
Calculation: |
|
Remaining
Principal Balance |
$50,000.00 |
Minus Monthly
Payment (principal and interest) |
−42,010.18 |
Increased
mortgage interest costs |
7,989.82 |
3 points on
$42,010.18 |
1,260.31 |
Total buydown
necessary to maintain payments at $458.22/month |
9,250.13 |
If the new mortgage actually obtained is less than the computed
amount for a new mortgage ($42,010.18), the buydown shall be
prorated accordingly. If the actual mortgage obtained in our
example were $35,000, the buydown payment would be $7,706.57
($35,000 divided by $42,010.18 = .8331; $9,250.13 multiplied by .83
= $7,706.57).
The Agency is obligated to inform the displaced person of the
approximate amount of this payment and that the displaced person
must obtain a mortgage of at least the same amount as the old
mortgage and for at least the same term in order to receive the
full amount of this payment. The Agency must advise the displaced
person of the interest rate and points used to calculate the
payment.
Section 24.402 Replacement Housing Payment for 90-day
Occupants
Section 24.402(b)(2) Low income calculation example. The
Uniform Act requires that an eligible displaced person who rents a
replacement dwelling is entitled to a rental assistance payment
calculated in accordance with § 24.402(b). One factor in this
calculation is to determine if a displaced person is “low income,”
as defined by the U.S. Department of Housing and Urban
Development's annual survey of income limits for the Public Housing
and Section 8 Programs. To make such a determination, the Agency
must: (1) Determine the total number of members in the household
(including all adults and children); (2) locate the appropriate
table for income limits applicable to the Uniform Act for the state
in which the displaced residence is located (found at:
http://www.fhwa.dot.gov/realestate/ua/ualic.htm); (3) from
the list of local jurisdictions shown, identify the appropriate
county, Metropolitan Statistical Area (MSA)*, or Primary
Metropolitan Statistical Area (PMSA)* in which the displacement
property is located; and (4) locate the appropriate income limit in
that jurisdiction for the size of this displaced person/family. The
income limit must then be compared to the household income (§
24.2(a)(15)) which is the gross annual income received by the
displaced family, excluding income from any dependent children and
full-time students under the age of 18. If the household income for
the eligible displaced person/family is less than or equal to the
income limit, the family is considered “low income.” For
example:
Tom and Mary Smith and their three children are being displaced.
The information obtained from the family and verified by the Agency
is as follows:
Tom Smith, employed, earns $21,000/yr.
Mary Smith, receives disability payments of $6,000/yr.
Tom Smith Jr., 21, employed, earns $10,000/yr.
Mary Jane Smith, 17, student, has a paper route, earns
$3,000/yr. (Income is not included because she is a dependent child
and a full-time student under 18)
Sammie Smith, 10, full-time student, no income.
Total family income for 5 persons is: $21,000 + $6,000 + $10,000
= $37,000
The displacement residence is located in the State of Maryland,
Caroline County. The low income limit for a 5 person household is:
$47,450. (2004 Income Limits)
This household is considered “low income.”
* A complete list of counties and towns included in the
identified MSAs and PMSAs can be found under the bulleted item
“Income Limit Area Definition” posted on the FHWA's Web site at:
http://www.fhwa.dot.gov/realestate/ua/ualic.htm.
Section 24.402(c) Downpayment assistance. The downpayment
assistance provisions in § 24.402(c) limit such assistance to the
amount of the computed rental assistance payment for a tenant or an
eligible homeowner. It does, however, provide the latitude for
Agency discretion in offering downpayment assistance that exceeds
the computed rental assistance payment, up to the $5,250 statutory
maximum. This does not mean, however, that such Agency discretion
may be exercised in a selective or discriminatory fashion. The
displacing Agency should develop a policy that affords equal
treatment for displaced persons in like circumstances and this
policy should be applied uniformly throughout the Agency's programs
or projects.
For the purpose of this section, should the amount of the rental
assistance payment exceed the purchase price of the replacement
dwelling, the payment would be limited to the cost of the
dwelling.
Section 24.404 Replacement Housing of Last Resort.
Section 24.404(b) Basic rights of persons to be
displaced. This paragraph affirms the right of a 180-day
homeowner-occupant, who is eligible for a replacement housing
payment under § 24.401, to a reasonable opportunity to purchase a
comparable replacement dwelling. However, it should be read in
conjunction with the definition of “owner of a dwelling” at §
24.2(a)(20). The Agency is not required to provide persons owning
only a fractional interest in the displacement dwelling a greater
level of assistance to purchase a replacement dwelling than the
Agency would be required to provide such persons if they owned fee
simple title to the displacement dwelling. If such assistance is
not sufficient to buy a replacement dwelling, the Agency may
provide additional purchase assistance or rental assistance.
Section 24.404(c) Methods of providing comparable replacement
housing. This Section emphasizes the use of cost effective
means of providing comparable replacement housing. The term
“reasonable cost” is used to highlight the fact that while
innovative means to provide housing are encouraged, they should be
cost-effective. Section 24.404(c)(2) permits the use of last resort
housing, in special cases, which may involve variations from the
usual methods of obtaining comparability. However, such variation
should never result in a lowering of housing standards nor should
it ever result in a lower quality of living style for the displaced
person. The physical characteristics of the comparable replacement
dwelling may be dissimilar to those of the displacement dwelling
but they may never be inferior.
One example might be the use of a new mobile home to replace a
very substandard conventional dwelling in an area where comparable
conventional dwellings are not available.
Another example could be the use of a superior, but smaller,
decent, safe and sanitary dwelling to replace a large, old
substandard dwelling, only a portion of which is being used as
living quarters by the occupants and no other large comparable
dwellings are available in the area.
[70 FR 611, Jan. 4, 2005, as amended at 70 FR 22611, May 2, 2005]