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Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970

Summary Report - Final Rule amending 49 CFR Part 24 January 4, 2005

Background

The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended (Uniform Act) is the standard for Federal and federally funded real property acquisition programs. The Uniform Act is contained in Title 42 U.S.C. 4601-4655. The regulations implementing the law are contained in 49 CFR Part 24. Since 1989, when the regulation was last updated, there have been only a few small amendments made to the rule.

On January 4, 2005, an update of 49 CFR Part 24 was issued to clarify and more effectively implement Uniform Act requirements based on experience gained by the 18 Federal Agencies operating subject to the rule. Although most of the existing rule content remained unchanged there were sections reworded for clarity and reorganization of Subparts to make the content more readable and easier to understand. Based on current needs and changes in Federal programs some sections were added and some references removed.

The regulation in 49 CFR 24 is organized into seven subparts, with 2 appendices. This report summarizes the key changes made within each subpart and the appendices, and presents the background and rationale for the each key change. Where major reorganization of a subpart was made it will be mentioned but the numerous minor revisions to wording, or phrasing made throughout the regulation will not be included. Only subpart G is not covered by this report as it received only minor edits and reorganization.

Appendix A was expanded to provide additional explanations and examples. Appendix B was revised to simplify the reporting form used to gather statistical information from Agencies related to their acquisition and relocation activities. The appendices are an integral part of the regulation, providing supplemental information necessary to apply the provisions in the rule appropriately.

The new rule became effective on February 3, 2005.

TEXT BOX KEY

There are two types of text boxes used in this report to provide excerpts from the regulation. The three-part boxes are used to present extracts from the rule. The upper portion of each text box contains the 49 CFR Part 24 section references. The middle portion contains the wording extract from that section. The bottom portion contains references where additional information regarding the section is available.

49 CFR Part 24 Section Reference
Text extract from the above section
References for additional information

The two part boxes contain extracts from appendix A.

Appendix A

Text extract from appendix A


Table of Contents

Subpart A -- General

This subpart contains the purpose, definitions and administrative procedures required to implement the Uniform Act. The purpose (Sec. 24.1) and administrative procedures portion (Sec. 24.3 to 24.10) of the subpart did not change except for some minor legislative reference additions and some revised phrasing for clarity.

The main changes to this Subpart were in Sec. 24.2 Definitions. This section was changed in title and format by adding a numbering system to better identify the definitions and their components. The section now contains 33 definitions, four of which are new. New definitions for the terms "Dwelling Site", "Household Income", "Mobile Home" and "Waiver valuation" were added. A list of 13 acronyms was also added at the end of the section to enhance the understanding of the persons and Agencies that use this unified regulation.

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New Definitions

§ 24.2(a)(11) Dwelling site
The term dwelling site means a land area that is typical in size for similar dwellings located in the same neighborhood or rural area.
appendix A, § 24.2(a)(11)

The term "dwelling site,'' is defined as a typically sized land area for similar dwellings in the neighborhood where the dwelling to be acquired is located. This definition helps ensure more accurate computation of replacement housing payments when a dwelling is located on a larger than normal site or when mixed-use or multi-family properties are involved, and reflects current practice. Specific examples were provided in appendix A to illustrate when its use is appropriate.

Appendix A 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.
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§ 24.2(a)(14) Household Income

The term household income means total gross income received for a 12 month period from all sources (earned and unearned) including, but not limited to wages, salary, child support, alimony, unemployment benefits, workers compensation, social security, or the net income from a business. It does not include income received or earned by dependent children and full time students under 18 years of age.

See appendix A, § 24.2(a)(14) for examples of exclusions to income, or access a list of federally Mandated Exclusions to Income at http://www.fhwa.dot.gov/real_estate/practitioners/uniform_act/relocation/exclusions.cfm

Household income generally includes average monthly income from all sources, but excludes income from dependent children and full time students under 18 years of age, and certain government assistance referenced in appendix A. The list of federally Mandated Exclusions to Income changes periodically based on congressional action and the FHWA will update the website when necessary.

Appendix A 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. ... If there is a question on whether or not to include income from a specific program contact the Federal Agency administering the program.

Because the sources of household income constantly change and vary by household, the rule does not provide a more definitive list of income sources. Based on the experience of other Federal Agencies that use definitions of income, such definitions can never be totally comprehensive or timely, and could render the regulations outdated within a short period of time. Displacing Agencies need to determine income for each individual or family based on whatever financial resources are available (earned, unearned, benefits, etc.). When a question arises as to whether something should be considered as income, the Federal Agency administering the program should be contacted for its assistance.

Each acquiring Agency is responsible for verifying income. It is suggested that if the income changes before the relocation offer is made, that an adjustment be made based upon verification of the change in income. In any event, the replacement housing benefits for a 90 day occupant are based on the income stream in existence at the time of the relocation offer. The amount of a displaced tenant's replacement housing payment should not be adjusted if the tenant's income later changes. The Uniform Act envisions a rental assistance payment that is determined once, and which is not affected by subsequent events. Replacement Housing Payments under the Uniform Act are not to be confused with rental or homeownership subsidy programs. There is no statutory provision for adjusting relocation claims or payments based on changes in income after the eligibility determination has been made.

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§ 24.2(a)(17) Mobile home
The term mobile home includes manufactured homes and recreational vehicles used as residences.
appendix A, § 24.2(a)(17)

The new definition of the term "mobile home" now includes both manufactured homes and recreational vehicles when used as residences. Appendix A explains that "mobile homes" and "manufactured homes" are recognized as synonymous by HUD for that Agency's programs and for purposes of this regulation will be considered the same. Appendix A also includes further guidance concerning the use of recreational vehicles as replacement housing. (Subpart F continues to include an explanation of the different methods of computing replacement housing payments when a mobile home has been determined to be real property. Subpart D includes the eligible moving cost options should the mobile home be determined to be personal property and capable of being moved.)

Appendix A has been supplemented to provide guidance and discuss both of the two housing types added to the term "mobile home" and how they can be found acceptable as comparable replacement dwellings for persons displaced from a mobile home. Guidance in the appendix points out that to consider a recreational vehicle as a replacement dwelling a number of conditions must be met. In particular, the regulations of the local jurisdiction must permit the consideration of these vehicles as decent, safe and sanitary dwellings. In cases where the local codes do not, the recreational vehicle will not qualify as a replacement dwelling.

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§ 24.2(a)(33) Waiver valuation
The term waiver valuation means the valuation process used and the product produced when the Agency determines that an appraisal is not required, pursuant to § 24.102(c)(2) appraisal waiver provisions.
appendix A § 102(c)(2)(ii)

The new term "waiver valuation" is linked to Section 102(c)(2)(ii) in Subpart B and is defined in Section 24.2 for clarity and consistency.

Appendix A

102(c)(2)(ii) 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).

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Revised Definitions

In addition to the four new definitions added to the regulations, components of several other definitions received new or revised provisions. For all of the major new provisions, explanation or examples were added to appendix A.

§ 24.2(a)(6)(ii) Functionally equivalent to the displacement dwelling.
The term "functionally equivalent" means that it performs the same function, and provides the same utility. While a comparable replacement dwelling need not possess every feature of the displacement dwelling, the principal features must be present.
phrase " and is capable of contributing to a comparable style of living " removed
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§ 24.2(a)(6) Comparable Replacement Dwelling Within the revised definition in subparagraph (ii) the phrase "style of living'' was removed. The phrase has sometimes been misused and has proven to be confusing. Occasionally, it has been used out of context and interpreted to require identical unique features found in acquired dwellings such as, cherry cabinets, gold fixtures, and other specialized items to be in comparable replacement dwellings. When applied in this way the standard for replacement housing has been raised to a level above ``comparable.'' This interpretation can make it nearly impossible to find appropriate replacement housing and could result in replacement housing payments greater than those intended by Congress. As noted in the conference report accompanying the 1987 amendments, ``The Conferees recognize that strict and absolute adherence to an exhaustive, detailed, feature-by-feature comparison can result in rigidities. These can constitute a substantial economic burden and can lead to excessive cost if the law requires, or is interpreted to require, the replacement dwelling to possess every feature of the acquired dwelling as an absolute minimum. (See H.R. Conf. Rep. No. 100-27, at 247 (1987))

The Congress realized the difficulty in finding comparable replacement dwellings and intended there to be some flexibility in the definition. Removing the phrase ``style of living'' will not erode any protections provided to the displaced person. Other criteria under the definition of comparability would adequately cover the factors covered by ``style of living.''

In another paragraph related to the definition of the term Comparable Replacement Dwelling, a sentence that had been in the paragraph that is now in Section 24.2(a)(6)(vii) was deleted. Deleting the sentence removes the subsidized housing provision from the paragraph and emphasizes that a comparable replacement dwelling must be available on the private market.

§ 24.2(a)(6)(vii)
Currently available to the displaced person on the private market except as provided in paragraph (a)(6)(ix) of this section

appendix A

§ 24.2(a)(6)(vii)

The exception reference to paragraph (a)(6)(ix) points to where the subsidized housing provision is now covered within the current definition. The revised provisions in paragraph (ix) are applied only when a person is displaced from government subsidized housing, and accepts an offer of government housing assistance at the replacement dwelling. In such a case the requirements of the government housing program relating to the number of rooms or living space of the replacement dwelling apply.

§ 24.2(a)(6)(ix)
For a person receiving government housing assistance before displacement, a dwelling that my reflect similar government housing assistance any requirement of the government housing assistance program relating to the size of the replacement dwelling shall apply.

appendix A

§ 24.2(a)(6)(ix)

The information in the appendix related to these two paragraphs emphasize the point that subsidized housing can qualify as a comparable replacement dwelling only if the person is displaced from a similarly subsidized unit or public housing. (If a person accepts assistance under a government housing assistance program, the rules of that program govern the size of the replacement dwelling, and the rental assistance payment under Section 24.402 would be computed on the basis of the person's actual out-of-pocket cost for the replacement housing.) The acquiring Agency is obligated to inform the person of his or her options when considering subsidized housing as a replacement dwelling.

The Decent, safe, and sanitary dwelling definition received minor rewording, additional guidance in appendix A, and creation of two paragraphs from the content formerly in old paragraph (4).

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§ 24.2(a)(8) Decent, safe, and sanitary dwelling
(iv) persons occupying each habitable room used for sleeping purposes shall not exceed that permitted by local housing codes or, in the absence of local codes, the policies of the displacing Agency. In addition, the displacing Agency shall follow the requirements for separate bedrooms for children of the opposite gender included in local housing codes or in the absence of local codes, the policies of such Agencies;

appendix A

§ 24.2(a)(8)(ii)

Lead Based Paint

§ 24.2(a)(8)(vii)

Persons with a Disability

The primary focus of the revisions was to clarify that the local housing code is the primary guide in identifying an acceptable replacement dwelling. The revised wording in (iv) addresses the maximum number of persons permitted to occupy a room used for sleeping purposes and any requirement for separate bedrooms for children of the opposite gender which can occupy rooms used for sleeping purposes. When local housing code requirements are not present or do not address considerations covered by the definition, the written policy of the Agency would govern.

The appendix adds two additional considerations relating to decent, safe, and sanitary considerations. Section 24.2(a)(8)(ii) recommends considering as a matter of public policy the abatement of deteriorating paint, including lead-based paint and lead-based paint dust, in protecting the public health and safety if the local codes or ordinances do not provide such standards. Section 24.2(a)(8)(vii) addresses the need to provide reasonable accommodation for a displaced person with a physical impairment that substantially limits one or more of the major life activities. This was a change to address physical disabilities beyond those associated with a wheelchair.

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§ 24.2(a)(9)(ii) Persons Not Displaced The nonexclusive list in this section was supplemented to conform to recent program or law changes and the appendix revised to provide that persons remaining in a temporary location for a period exceeding one year must be offered all permanent relocation assistance.

§ 24.2(a)(9)(ii) Persons Not Displaced
(D) A person who is not required to relocate permanently ...
appendix A

§ 24.2(a)(9)(ii)(D)

In 1987, the Uniform Act was amended to cover displacement from Federal and federally-assisted programs or projects as a direct result of rehabilitation. To counter the disincentive this might create for a tenant temporarily displaced from a residence while that residence is being rehabilitated, the regulation considered such a person not to be displaced, if, and only if, certain stringent protections are applied. These included covering moving expenses to and from the temporary location, payment of increased housing costs during the period of relocation, the guarantee of a return to the same unit, or to another suitable unit in the same building or complex, and a limitation on a rental increase at the rehabilitated replacement unit. It is expected that temporary relocations will be rare, and, for HUD funded projects, clearly planned for in the development of the project, and used only where a tenant is guaranteed a replacement unit in the project or unit from which they were displaced.

§ 24.2(a)(9)(ii) Persons Not Displaced
(K) ... advisory assistance may be provided to unlawful occupants at the option of the Agency ...
§ 24.206 Eviction for cause

This interpretation of the law, to create an exception to its general applicability, must be limited and strictly applied, in order to meet the intent of Congress. Accordingly, the appendix specifies that the displacement of a tenant for a period exceeding 12 months must ordinarily be considered significant enough to fall within the general rule pertaining to displacement as a direct result of a program or project, and not to come within the limited exception to the definition of "displaced person" which the law establishes.

Three other minor revisions were made to paragraphs identifying "persons not displaced." In paragraph (K) a clarification was added to give Agencies the option of providing advisory assistance. This parallels a provision in the definition of the term "unlawful occupant" in Section 24.2(a)(29).

§ 24.2(a)(9)(ii) Persons Not Displaced
(L) ... not lawfully present in the United States and ... ineligible for relocation assistance ...
§ 24.208 Aliens not lawfully present in the United States.

In paragraph (L) a new provision was added to relate to the February 1999, amended portion of the rule included in Section 24.208 of the regulations. That Section was added to the common rule based on Pub. L. 105-117, 111 Stat. 2384 which amended the Uniform Act to provide that an alien not lawfully present in the United States was ineligible for relocation assistance.

§ 24.2(a)(9)(ii) Persons Not Displaced
(M) Tenants required to move as a result of the sale of their dwelling to a person using downpayment assistance provided under the American Dream Downpayment Initiative (ADDI) ...
§ 102 Pub. L. 108-186

42 U.S.C. 12821

The other new paragraph added to nonexclusive list of persons not displaced was added in (M) to reflect a recent law and cover situations that might arise where Federal assistance is used to acquire tenant occupied property resulting in the tenant having to move.

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§ 24.2(a)(15) Initiation of negotiations The definition in this section includes a new paragraph (iv) to provide that, in the case of acquisitions of real property based on an amicable agreement with the owner (without recourse to the power of eminent domain), a qualified tenant's eligibility for relocation benefits would become effective when the Agency and the owner reach agreement to purchase the real property.

§ 24.2(a)(15) Initiation of negotiations
(iv) In the case of permanent relocation of a tenant ... the initiation of negotiations ... does not become effective, for purposes of establishing eligibility for relocation assistance ... until there is a written agreement between the Agency and the owner to purchase the real property.
appendix A, § 24.2(a)(15)(iv)

Initiation of negotiations in these cases does not become effective for purposes of establishing relocation eligibility until there is a written agreement between the Agency and the owner to purchase the property. This would establish the potential relocation entitlement of tenants at the time negotiations begin, but would not provide relocation benefits in the event no agreement was reached to acquire the property. Such tenants should be fully informed of their potential eligibility.

The definition of ``salvage value'' was reworded to clarify that the value of an item is to be based on the item being removed at the buyer's expense.

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§ 24.2(a)(23) Salvage Value
The term salvage value means the probable sale price of an item offered for sale to knowledgeable buyers with the requirement that it be removed from the property at a buyer's expense (i.e., not eligible for relocation assistance). This includes items for re-use as well as items with components that can be re-used or recycled when there is no reasonable prospect for sale except on this basis.
 

rded to clarify that the value of an item is to be based on the item being removed at the buyer's expense.

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§ 24.2(a)(29) Unlawful Occupant
A person who occupies without property right, title or payment of rent or a person legally evicted, with no legal rights to occupy a property under State law. An Agency, at its discretion, may consider such person to be in lawful occupancy.

§ 24.2(a)(9)(ii)(K)

The term "unlawful occupancy" was changed to "unlawful occupant" so that the definition can be stated more clearly. The wording changes simplify the definition without changing its meaning.

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§ 24.2(a)(30) Utility costs
The term utility costs means expenses for electricity, gas, other heating and cooking fuels, water and sewer.
 

Based on comments received during formulation of the rule the definition of utility costs was revised by replacing the reference to heat and light with a reference to electricity, gas, and other heating and cooking fuels.

The only other change, except for some updating of legal references, that is pertinent to this Subpart was the simplification of the reporting form in Appendix B that is referenced in § 24.9 (c) Reports. The form included in Appendix B was redesigned to be less burdensome and to enable the requested information to be reported electronically. No change was made in the reporting frequency. It is left to the Federal funding Agency to determine the frequency for compiling the report.

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Subpart B --Real Property Acquisition

§ 24.101 Applicability of acquisition requirements was restructured to extend the application of subpart B to all Direct Federal acquisitions, except those undertaken by the Tennessee Valley Authority or the Rural Utilities Service.

§ 24.101 (a)(1)
The requirements of this subpart apply to any acquisition of real property for a direct Federal program or project, except acquisition for a program or project that is undertaken by the Tennessee Valley Authority or the Rural Utilities Service
appendix A, § 24.101(a)

This change was made because Federal Agencies advised that the voluntary transaction provisions were being used to a significant extent and suggested that these exceptions should no longer apply to direct acquisitions by Federal Agencies. The proposal to eliminate this provision for Federal Agencies' direct purchases is consistent with Section 305(b)(2) of 42 U.S.C. 4655(b)(2) of the Uniform Act. This provision of the Uniform Act allows these exceptions for recipients of Federal financial assistance, but provides no such exceptions for Federal Agencies.

These exceptions for federally-assisted programs to the requirements of Subpart B remain conceptually the same as they were previously. Several technical changes dealing with implementation were (i.e., voluntary transactions and acquisitions where the Agency does not have the power of eminent domain) made and are discussed in detail in appendix A, 24.101(b)(1)(iv) and (2)(ii).

Subpart B contains the regulatory procedures implementing the acquisition practices mandated by the Uniform Act. The regulations establish a sequence for appraisal preparation, appraisal review, establishment of just compensation, and making offers to property owners. The process of negotiation assures that just compensation and fair and equitable treatment is provided to each owner whose property is needed for a Federal or federally funded project. The latest rule modification simplified procedures, provided acquiring Agencies tools to streamline practices and included additional guidance on appraisal methodology, and acquisition practice.

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§ 24.102 (c)(2) An appraisal is not required

(ii) The Agency determines that an appraisal is unnecessary because the valuation problem is uncomplicated and the anticipated value of the proposed acquisition is estimated at $10,000 or less, based on a review of available data.

(A) When an appraisal is determined to be unnecessary, the Agency shall prepare a waiver valuation.

(B) The person performing the waiver valuation must have sufficient understanding of the local real estate market to be qualified to make the waiver valuation.

(C) The Federal Agency funding the project may approve exceeding the $10,000 threshold, up to a maximum of $25,000, if the Agency acquiring the real property offers the property owner the option of having the Agency appraise the property. If the property owner elects to have the Agency appraise the property, the Agency shall obtain an appraisal and not use procedures described in this paragraph.

appendix A, § 24.102(c)(2).

A key Agency option, appraisal waiver, available to streamline the acquisition process for low value parcels is included in § 24.102 Basic acquisition policies where the former $2500 threshold on waiver of appraisal was raised to $10,000, with a conditioned option available to set a higher limit.

The Uniform Act provides that the requirement for an appraisal may be waived in cases involving the acquisition of property with a low fair market value. That value had been defined in the regulation as $2500 or less. Increased appraisal costs and escalating prices have over time made it apparent the former limit was too low.

For situations where an Agency determines low value properties are to be valued using appraisal waiver procedures, new paragraph (ii) provides the Agency must prepare a "waiver valuation." (See term defined in Sec. 24.2(a)(33).) Even more flexibility is provided in paragraph (C) where the Federal funding Agency can approve raising the threshold beyond $10,000 up to a maximum of $25,000, provided that the Agency acquiring the real property offers the property owner the option of having an appraisal performed.

The new rule also contains provisions in paragraph (ii)(B) to assure that a person preparing the waiver valuation be sufficiently qualified to do so. This provision is similar to the rule modifications clarifying qualifications and responsibilities of appraisers, and review appraisers in § 24.103(d).

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§ 24.102(n) Conflict of Interest provisions were revised and expanded. As indicated in the appendix the "...overall objective is to minimize the risk of fraud while allowing Agencies to operate as efficiently as possible. Paragraph (1) in this section extends equal conflict of interest standards to all individuals valuing real property, whether their work involves waiver valuations, appraisal, or appraisal review.

The second provision adds a new provision specifying that any person functioning as a negotiator shall not supervise or formally evaluate the appraiser, review appraiser or person making waiver valuations. As stated in the appendix the " intent of this provision is to ensure appraisal/valuation independence and to prevent inappropriate influence. The requirement can be waived if the provision creates a hardship for the Agency. The exemption is not based on financial considerations, but rather on recognition that some small Agencies, especially Federal-assistance recipients such as local public Agencies, do not have the staffing levels that are needed to support the separation of functions required by this paragraph.

§ 24.102(n) Conflict of Interest
2. No person shall attempt to unduly influence or coerce an appraiser, review appraiser, or waiver valuation preparer regarding any valuation or other aspect of an appraisal, review or waiver valuation. Persons functioning as negotiators may not supervise or formally evaluate the performance of any appraiser or review appraiser performing appraisal or appraisal review work, except that, for a program or project receiving Federal financial assistance, the Federal funding Agency may waive this requirement if it determines it would create a hardship for the Agency.

3. An appraiser, review appraiser, or waiver valuation preparer making an appraisal, appraisal review or waiver valuation may be authorized by the Agency to act as a negotiator for real property for which that person has made an appraisal, appraisal review or waiver valuation if the offer to acquire the property is $10,000, or less.
appendix A, § 24.102(n).

The third provision seeks to minimize situations where administrative costs exceed acquisition costs. For low value acquisitions, defined as those where valuation is $10,000 or less, the same person may prepare a valuation estimate (including an appraisal) and negotiate that acquisition. The appendix related to this section advises this exception is not mandatory but an option available to streamline acquisition activities.

§24.103 Criteria for Appraisals in the Uniform Act regulation had not been changed since the Appraisal Foundation published the Uniform Standards of Professional Appraisal Practice (USPAP). The appraisal standards and appraiser licensure established by USPAP prompted the rule modifications and clarifications included in § 24.103. Confusion and misunderstanding as to the applicability of USPAP provisions to Uniform Act real property acquisitions have existed ever since USPAP was published. The Uniform Act and 49 CFR Part 24 set the requirements for appraisal and appraisal review in support of Federal and federally-assisted acquisition of real property for government projects.

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§ 24.103 Criteria for appraisals

(a) Appraisals are to be prepared according to these requirements, which are intended to be consistent with the Uniform Standards of Professional Appraisal Practice (USPAP). The Agency may have appraisal requirements that supplement these requirements, including, to the extent appropriate, the Uniform Appraisal Standards for Federal Land Acquisition (UASFLA).

(1) The Agency acquiring real property has a legitimate role in developing the scope of work and defining the appraisal problem. The scope of work and development of an appraisal under these requirements depends on the complexity of the appraisal problem.

(2) The Agency has the responsibility to assure that the appraisals it obtains as a minimum, complies with the definition of appraisal in § 24.2(a)(3) and the five following requirements: (See appendix A, §§ 24.103 and 24.103(a).)

appendix A, §§ 24.103, 24.103(a), 24.103(a)(1) & (2)

Appraisers who are committed to adhere to USPAP by virtue of State appraisal licensing or certification should look to the provisions of USPAP, including the scope of work, the Jurisdictional Exception Rule and the Supplemental Standards provisions, and their State Appraisers' board for guidance on how they can remain in compliance with USPAP and perform appraisals for Agencies following Uniform Act and 49 CFR Part 24 requirements.

Many of the new provisions in § 24.103 are intended to assist the appraiser, the Agency and others in understanding Uniform Act requirements in light of USPAP. The terminology throughout the section was changed from "standards" to "requirements" to avoid confusion with USPAP standards rules. The type of appraisal practice the section applies to was also clearly stated to be for "Federal and federally-assisted programs" to differentiate it from private sector; especially mortgage lending, appraisal practice.

The main improvement to the rule is the addition of the requirement for a scope of work statement in each appraisal. The scope of work replaces the former appraisal problem statement. It also renders obsolete the former "minimum standards" and "detailed" appraisals, replacing them with an infinitely variable standard driven by the circumstances of each acquisition. In appendix A, a discussion on preparing the scope of work was added.

The five requirements for an appraisal referenced in Section 24.103(a)(2) are almost identical to those included in the previous regulation.

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§ 24.103(d) Qualifications of appraisers and review appraisers
(1) The Agency shall establish criteria for determining the minimum qualifications and competency of appraisers and review appraisers. Qualifications shall be consistent with the scope of work for the assignment. The Agency shall review the experience, education, training, certification/licensing, designation(s) and other qualifications of appraisers, and review appraisers, and use only those determined by the Agency to be qualified.
appendix A, § 24.103(d)(1)

The appraiser qualifications provision in § 24.103(d) has been reworded and updated specifically by adding "review appraisers" and linking their activities to assignments consistent with the "scope of work" involved in the appraisal. The rule and the appendix emphasize that appraisers and review appraisers be qualified and competent, and that State licensing or certification and professional society designations can help provide an indication of an appraiser's abilities.

The rule in § 24.103(d)(2) also requires that when contract (fee) appraisers are hired they be State licensed or certified.

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§ 24.104 Review of appraisals in the rule and in appendix A provides an expanded discussion on the role and responsibilities of the review appraiser. The rule specifically states that the review appraiser's examination of the appraisal must include examination of the presentation and analysis of market information. While this may not be a change from what Agencies, as a matter of practice, now expect of review appraisers, we believe the language avoids misunderstanding and confusion. Also, the rule states clearly that the review appraiser is to ensure that appraisal performance complies with appraisal requirements and other applicable requirements, and supports the appraiser's opinion of value.

§ 24.104 Review of Appraisals
(a) A qualified review appraiser (see § 24.103(d)(1) and appendix A, § 24.104) shall examine the presentation and analysis of market information in all appraisals to assure that they meet the definition of appraisal found in 49 CFR 24.2(a)(3), appraisal requirements found in 49 CFR 24.103 and other applicable requirements, including, to the extent appropriate, the UASFLA, and support the appraiser's opinion of value. The level of review analysis depends on the complexity of the appraisal problem. As needed, the review appraiser shall, prior to acceptance, seek necessary corrections or revisions. The review appraiser shall identify each appraisal report as recommended (as the basis for the establishment of the amount believed to be just compensation), accepted (meets all requirements, but not selected as recommended or approved), or not accepted. If authorized by the Agency to do so, the staff review appraiser shall also approve the appraisal (as the basis for the establishment of the amount believed to be just compensation), and, if also authorized to do so, develop and report the amount believed to be just compensation.
appendix A, § 24.104(a)

§ 24.104(b)
If the review appraiser is unable to recommend (or approve) an appraisal as an adequate basis for the establishment of the offer of just compensation, and it is determined by the acquiring Agency that it is not practical to obtain an additional appraisal, the review appraiser may, as part of the review, present and analyze market information in conformance with § 24.103 to support a recommended (or approved) value.
appendix A, § 24.104(b)

The second paragraph in this section makes clear that the review appraiser may develop independent valuation information as part of the appraisal review process.

Section 24.104(c) requires a written report that identifies the appraisal report(s) reviewed, documents the findings and conclusions arrived at during the review of the appraisal(s), and provides a certification of the approved value.

The reports reviewed are to be identified as either:

Identification of each appraisal report is proposed as a method of avoiding confusion as to the status of each reviewed appraisal. The written report must include a signed certification setting forth the approved value and the parameters of the review. For "staff" review appraisers, the Agency can authorize them to recommend or approve just compensation based on their review of the appraisals.

Each of the three paragraphs in the expanded section dealing with the review appraiser's responsibilities included in appendix A provides additional information amplifying the functions and duties appropriate to this function required by the Uniform Act.

Appendix A §24.104(a) ... 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 ... or establish the amount the Agency believes is just compensation, she/he must be specifically authorized by the Agency to do so.

(b) ... When a review appraiser develops an independent value ... 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.

(c)... At the Agency's discretion, for a low value property requiring only a simple appraisal process, the review appraiser's recommendation ... may be determined to satisfy the requirement for the review appraiser's signed report and certification.

The other revisions made to this subpart were primarily to improve the language or clarify intent for activities included in the acquisition process. One notable clarification is the requirement that in contacting and informing the owner the offers or notices must now be made " in writing." This requirement is applicable to all acquisitions including voluntary transactions and acquisitions in which the Agency does not have the power of eminent domain. The written offer requirement and the addition of one word in § 24.102(f) that the Agency shall make "all" reasonable effort when attempting to contact the owner to discuss an offer provides an indication of how this latest revision focused on encouraging an open dialogue between the Agency and the owner.

The Agency's responsibility to establish just compensation, to offer the full amount so established and to negotiate in good faith with the owner is amplified by additions in the appendix. The appendix item relating to support for administrative settlements was revised by deleting the specific suggestions for items that could be considered in favor of requesting ``what available information, including trial risks, supports the settlement.''

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Subpart C -- General Relocation Requirements

Subpart C, as the title indicates contains the general requirements related to providing relocation assistance and payments. The primary change made in this subpart was to enhance assistance available to displaced businesses, farms & non-profit organizations. The actions taken reflect the recommendations provided in the National Business Relocation Study prepared for FHWA in 2002. (http://www.fhwa.dot.gov/real_estate/practitioners/archives/nbrs_2002/) Some minor realignment of content and rewording of paragraphs for clarity were also included in the rule changes made in this subpart.

The other changes to this subpart involve primarily improved wording to emphasize intent or minor reorganization to consolidate similar items within the regulation. One such relocated item is the Notice of intent to acquire provisions previously addressed in Subpart A under the Definitions, but now located in § 24.203(d) along with the other relocation notices. Unlike the other notices described in § 24.203, a notice of intent to acquire is not mandatory. As was noted when the 1989 final rule was issued (54 FR 8916), its purpose "is to clearly establish a displaced person's eligibility for relocation benefits. However, it should be understood that the absence of such a notice does not deprive the person of eligibility for relocation benefits."

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§ 24.203(d) Notice of intent to acquire

A notice of intent to acquire is a displacing Agency's written communication that is provided to a person to be displaced, including those to be displaced by rehabilitation or demolition activities from property acquired prior to the commitment of Federal financial assistance to the activity, which clearly sets forth that the Agency intends to acquire the property. A notice of intent to acquire establishes eligibility for relocation assistance prior to the initiation of negotiations and/or prior to the commitment of Federal financial assistance.

§ 24.2(a)(9)(i)(A).

A notice of intent to acquire may be used to establish a person's eligibility for relocation assistance prior to the initiation of negotiations and sometimes prior to commitment of Federal-financial assistance. A notice of intent to acquire is a means by which displacing Agencies may establish a person's relocation eligibility in advance of the typical acquisition and relocation process in order to conduct orderly relocation, minimize adverse impacts on displaced persons and to expedite project advancement and completion.

§ 24.205(a)(4)
An estimate of the availability of replacement business sites. When an adequate supply of replacement business sites is not expected to be available, the impacts of displacing the businesses should be considered and addressed. Planning for displaced businesses which are reasonably expected to involve complex or lengthy moving processes or small businesses with limited financial resources and/or few alternative relocation sites should include an analysis of business moving problems.
 
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§ 24.205 Relocation planning, advisory services, and coordination provides increased attention to the needs of businesses and other non-residential displacements. These new provisions drew on findings reported in the National Study referenced above. The Study found that relocation assistance advisory services for businesses were generally considered fair to poor. The changes made to this section address the impacts caused by displacement on businesses, and provide additional assistance to increase businesses' viability after displacement. The focus of the relocation planning activities is to recognize potential problems and develop solutions.

While the prior rule permitted the development of an estimate of the number, type and size of non-residential displacements it did not require, as it did for residential displacements an inquiry into the supply of replacement properties. The new paragraph highlighted above encourages Agencies to assess the availability of replacement building sites and develop an analysis of potential business move problems.

The relocation interview required by the former rule is also expanded to specifically address the need for additional information to analyze potential business move problems. The new interview requirements for non-residential displacements under § 24.205(c)(2)(i) (A) through (F) sets a minimum requirement for what should be included.

This list of interview essentials was developed from the National Study and testimony received during five national listening sessions, that the FHWA conducted in 2002. Many comments pointed to a need to provide guidance and direction on information the Agency should obtain when making personal interviews with businesses. Testimony from States and Local Public Agencies of actual cases where good interviewing and early planning is credited with preventing business closures contributed to the items included in the revised rule.

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§ 24.205(c)(2)(i) Interview Essentials for Non-residential Displacements
(A) The business's replacement site requirements, current lease terms and other contractual obligations and the financial capacity of the business to accomplish the move.

(B) Determination of the need for outside specialists in accordance with Sec. 24.301(g)(12) that will be required to assist in planning the move, assistance in the actual move, and in the reinstallation of machinery and/or other personal property.

(C) For businesses, an identification and resolution of personalty/realty issues. Every effort must be made to identify and resolve realty/personalty issues prior to, or at the time of, the appraisal of the property.

(D) An estimate of the time required for the business to vacate the site.

(E) An estimate of the anticipated difficulty in locating a replacement property.

(F) An identification of any advance relocation payments required for the move, and the Agency's legal capacity to provide them.
See 2002 National Relocation Business Study

www.fhwa.dot.gov/real_estate/practitioners/archives/nbrs_2002/

§ 24.205(c) Relocation assistance advisory services for residential displacements under the former regulations was considered to be more fully understood by displacing Agencies, and did not require as much attention. However, one clarification and a new requirement need to be mentioned.

In § 24.205(c)(2)(ii)(E) the rule requires all persons be offered transportation to inspect replacement housing. This revision eliminated the specific reference to the elderly and handicapped in the former regulation. The minor clarification was made to emphasize that all displaced persons are entitled to such transportation. Experience has indicated that most people will provide their own transportation. If an Agency has concerns regarding its liability it can utilize other means of available transportation, such as a taxicab or rental car, to provide equal treatment to all displaced persons.

§ 24.205(c)(2)(ii)(F)
Any displaced person that may be eligible for government housing assistance at the replacement dwelling shall be advised of any requirements of such government housing assistance program that would limit the size of the replacement dwelling (see Sec. 24.2(a)(6)(ix)), as well as of the long term nature of such rent subsidy, and the limited (42 month) duration of the relocation rental assistance payment.
Related to § 24.2(a)(6)(ix)

In paragraph (F) under the same section a new advisory service requirement is added to the regulation. This item is related to the revised paragraph added to the definition of a Comparable Replacement Dwelling in Subpart A. The provision requires Agency personnel to stay current regarding the occupancy requirements of local housing programs and be able to explain the financial considerations that apply to conventional rental assistance and rent subsidy program. Any displaced person that may be eligible for a government housing assistance program must be advised of the requirement of each program, and how occupying such housing would affect their relocation.

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§ 24.206 Eviction for Cause had been proposed for repositioning to subpart A, but the move was not adopted and the rule changed little from the prior language. An addition to appendix A related to this section was made and warrants mention as it clarifies that evictions due to non-compliance with project related requirements (being stubborn or uncooperative during the relocation process) shall not negate the person's entitlement to relocation payments or other assistance.

§ 24.207 General requirements - claims for relocation payments contain some new requirements to offer more protection to displaced persons. This section complements §§ 24.205(c) and 24.203(a), (b) and (c) which describe the information and notices that must be provided to persons prior to displacement. Since the Uniform Act imposes requirements on displacing Agencies to provide relocation assistance, an agency cannot propose or request a person to be displaced to waive his or her relocation assistance and benefits.

§ 24.207(f) No waiver of relocation assistance
A displacing Agency shall not propose or request that a displaced person waive his or her rights or entitlements to relocation assistance and benefits provided by the Uniform Act and this regulation.
appendix A § 24.207(f)

The supplementary language in the appendix provides that a person, after they have been fully advised of all relocation payments and assistance to which they are entitled, may, in a written statement, choose not to accept some or all of such benefits. In the unlikely event that a person simply refuses to accept some or all payments and assistance, and refuses to provide any written statement to that affect, the Agency should document such refusal in writing.

Another new provision added at § 24.207(g) Expenditure of Payments expresses a longstanding practice and understanding that relocation payments provided to a displaced person are not to be considered as "Federal financial assistance". Therefore, their expenditure is not subject to the Uniform Act.

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Subpart D -- Payments for Moving and Related Expenses

This subpart discusses moving payment options, and identifies eligible and ineligible moving expenses incurred by residential and non-residential owners and tenants who have to relocate their personal property due to Agency acquisition. The subpart was extensively reorganized to be more readable. The lists of eligible and ineligible items were moved into the same section for ease of reference. The appendix was expanded to provide examples and clarify how certain actual costs are to be calculated. Several items, formerly considered part of reestablishment expenses for non-residential moves were reclassified as items eligible for reimbursement as actual reasonable moving expenses.

§ 24.301(b) Moves from a dwelling
(Eligible expenses for moves from a dwelling include the expenses described in paragraphs (g)(1) through (g)(7) of this section. Self-moves based on the lower of two bids or estimates are not eligible for reimbursement under this section.)

See Also § 24.301(c)

Moves from a mobile home

The reorganization makes it easier to find information relevant to residential and non-residential moves. For residential moves, the basic eligible expenses did not change from the former rule. However, in §§ 24.301(b) & 24.301(c) a clarification of policy is stated that expressly prohibits using bids or estimates to support a residential self move payment. A residential self move may only be reimbursed on the basis of the Fixed Residential Moving Cost Schedule or the actual cost incurred. . Actual cost moves can be accomplished by a commercial mover of by a self move. The self move will be administered in such a way that the actual costs reimbursed for labor and equipment rental will not exceed costs normally paid by commercial movers for similar labor and equipment rental.

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§ 24.301(e) Personal Property Only
Eligible expenses for a person who is required to move personal property from real property but is not required to move from a dwelling (including a mobile home), business, farm or nonprofit organization include those expenses described in paragraphs (g)(1) through (g)(7) and (g)(18) of this section.
appendix A, § 24.301(e).

The rule also added a new paragraph that describes the relocation assistance available to a displaced person for moving personal property from the acquisition area, when the acquisition does not create a displacement from a dwelling (including a mobile home), business, farm or nonprofit organization. Personal property only moves might include moving such things as farm equipment or livestock where the related buildings are not affected. It could also apply to low value/high bulk items when the items are located on a nonresidential acquired area.

The appendix includes examples and guidance related to this new provision.

Appendix A

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.

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§ 24.301(g)(14) Actual direct loss of tangible personal property was reworded and additional language in appendix A added to clarify how to calculate actual direct loss of tangible personal property. The key component is to provide an "as is" valuation of the personal property in both the existing location and when preparing the estimated cost of moving the item. The appendix information reiterates and reinforces the provisions of the rule.

Appendix A 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 (Sec. 24.301(g)(14)(i)) and moving cost estimate (Sec. 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.

The term ``value in place as is for continued use'' means the depreciated value of the item as it is installed at the displacement site as of the date of the acquisition. Generally, an item will be valued based on the current cost of the item as installed at the displacement site, and depreciated to reflect the current condition and estimated remaining useful life. Standard professional personal property appraisal methods would be acceptable. The in-place value in ``as is'' condition may not include costs that reflect code or other requirements that were not actually 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.

The estimated moving cost for an item is also to be limited to the ``as is'' condition of the item at the displacement site. Therefore, estimated reconnect costs may not include costs to meet code or other requirements that would only be necessary to relocate the item to a replacement site. Since the item is claimed as a loss and is not to be relocated, allowable reconnect costs may only reflect an estimate of the cost that would be incurred to install the item as it currently exists at the displacement site. Also the moving cost estimate may not include reconnect costs for an item that is not operable or installed at the displacement site.

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§ 24.301(g)(17) Searching for a replacement location
Searching for a replacement location. A business or farm operation is entitled to reimbursement for actual expenses, not to exceed $2,500, as the Agency determines to be reasonable
appendix A § 24.301(g)(17)

The main changes in this subpart relate to non-residential moves. In particular the searching expense limit was raised from $1,000 in the former rule to $2,500. Searching expenses are intended to provide compensation for the actual time and effort to find a replacement site, which also should include reasonable costs to investigate the site. Such costs may include the cost of obtaining permits, attending zoning hearings or negotiating the purchase or lease of a replacement site. Searching expenses include the actual time and effort required to obtain permits and to attend zoning hearings, not the assessed fees for the permits. They also include the time spent in negotiating the purchase of a replacement business site based on a reasonable salary or earnings rate. Paragraphs (i) through (vi) under this section indicate the type of costs eligible for reimbursement as a searching expense. Additional insight into potential searching expenses that could be eligible for reimbursement are provided in appendix A.

§ 24.301(g)(18) Low value/high bulk is a new paragraph added to provide procedures for calculating eligible moving costs related to certain types of personal property. The former rule did not address situations where low value items of personal property owned by a displaced business were more costly to move than to replace. The new rule provides a procedure in § 24.301(g)(18) to handle situations involving such low value personal property where in the judgment of the displacing Agency, the cost of moving the personal property is disproportionate to its value.

§ 24.301(g)(18) Low Value/High Bulk
When the personal property to be moved is of low value and high bulk, and the cost of moving the property would be disproportionate to its value in the judgment of the displacing Agency, the allowable moving cost payment shall not exceed the lesser of: The amount which would be received if the property were sold at the site or the replacement cost of a comparable quantity delivered to the new business location. Examples of personal property covered by this provision include, but are not limited to, stockpiled sand, gravel, minerals, metals and other similar items of personal property as determined by the Agency.
 
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§ 24.303 Related nonresidential eligible expenses is a new section containing revised actual cost benefits for non-residential moves. The three items in this section had been included under the former rule as part of reestablishment expenses. As reclassified they are now eligible to be reimbursed as actual, reasonable and necessary moving costs, and are not subject to the $10,000 cumulative limit that applies to reestablishment expenses under § 24.304.

The expenses described in this section do not relate specifically to a move of personal property, but are essential costs required to successfully relocate a business. Generally, professional services performed prior to the purchase or lease of a replacement site, to determine it's suitability for the displaced person's business operation, would be eligible for reimbursement; provided the Agency determines that they are actual, reasonable and necessary. Such professional services include, but are not limited to, soil testing, feasibility and marketing studies, and may be based on a pre-approved hourly rate. Fees and commissions directly related to the purchase or lease of the site, such as realtor commissions or finder's fees are ineligible for reimbursement.

§ 24.303 Related non-residential eligible expenses.
The following expenses, in addition to those provided by Sec.24.301 for moving personal property, shall be provided if the Agency determines that they are actual, reasonable and necessary:

(a) Connection to available nearby utilities from the right-of-way to improvements at the replacement site.

(b) Professional services performed prior to the purchase or lease of a replacement site to determine its suitability for the displaced person's business operation including but not limited to, soil testing, feasibility and marketing studies (excluding any fees or commissions directly related to the purchase or lease of such site). At the discretion of the Agency a reasonable pre-approved hourly rate may be established. (See appendix A, Sec. 24.303(b).)

(c) Impact fees or one time assessments for anticipated heavy utility usage, as determined necessary by the Agency.
 

Moving expenses for businesses sometimes include the cost of obtaining outside professional services made necessary only by the relocation. For example, attorneys' fees for representation before zoning authorities, or the cost of obtaining a soil analysis necessary in the preparation of a replacement site are directly related to relocation, and may be considered eligible expenses. By contrast, if these services are provided by regular employees of the displaced business, (such as staff engineers,) or professional contractors ordinarily used by the business for its everyday operations (such as legal counsel on retainer), these services are considered ordinary costs of doing business, and cannot be recognized among eligible moving expenses.

Impact fees and one time assessments incurred as the result of the relocation are also now reimbursable under this category based on reasonable and necessary costs as determined by the agency.

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Subpart E -- Replacement Housing Payments

This subpart provides the eligibility and computation requirements for calculating the residential replacement housing payments required by the Uniform Act. The subpart covers the criteria that apply to computations of housing supplemental payments for eligible displaced owners and tenants. There were only a few minor changes made to this subpart.

§ 24.401(e) Incidental Expense contained one such minor addition in sub paragraph (4) providing reimbursement for a "Professional home inspection". Professional home inspections including electrical systems, plumbing, and HVAC are commonplace and are considered a valid reimbursable incidental expense.

For 180 day homeowner-occupants who elect to rent rather than buy, § 24.401(f) was modified to provide an amount not to exceed the purchase supplement computed under § 24.401(b)(1). This change originated from testimony received during the national listening sessions, and through discussions with the other Federal Agencies. The revision is considered fair, and makes the displaced person whole at no additional cost to the Agency. An example of when this provision could apply would be where an elderly couple who own their home is displaced and want to rent rather than purchase another home

§ 24.401(f) Rental assistance payment for 180-day homeowner
A 180-day homeowner-occupant, who could be eligible for a replacement housing payment under paragraph (a) of this section but elects to rent a replacement dwelling, is eligible for a rental assistance payment. The amount of the rental assistance payment is based on a determination of market rent for the acquired dwelling compared to a comparable rental dwelling available on the market. The difference, if any, is computed in accordance with Sec. 24.402(b)(1), except that the limit of $5,250 does not apply, and disbursed in accordance with Sec. 24.402(b)(3). Under no circumstances would the rental assistance payment exceed the amount that could have been received under Sec. 24.401(b)(1) had the 180-day homeowner elected to purchase and occupy a comparable replacement dwelling.
 

Under the former procedure, the Agency would limit a replacement housing payment to a 180-day owner who elects to rent to the maximum rental supplement amount of $5,250. The revised rule allows the Agency to pay the full amount or any rent supplement supported by the market up to the amount they would have received as a 180-day homeowner to purchase a replacement dwelling.

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§ 24.402(b)(2)(ii) Replacement Housing Payment for 90-Day Occupant involves another change in computation practice involved one of the elements to be considered under § 24.402(b)(2) for calculating the base monthly rent for the displacement dwelling. The refinement of the former rule is based on making the rule more reflective of the statutory requirement that only a low-income displaced person's income shall be taken into consideration when calculating rental assistance payments for a comparable replacement dwelling (42 U.S.C. 4624(a).)

The former rule used 30 percent of a person's average monthly gross household income as the criteria for computing replacement housing payments for all eligible displaced tenants. This often resulted in large payments to existing tenants who are not low income and who elect to pay more than 30 percent of their monthly gross household income for rental housing.

§ 24.402(b)(2)(ii) Replacement Housing Payment for 90-Day Occupant
Thirty (30) percent of the displaced person's average monthly gross household income if the amount is classified as "low income" by the U.S. Department of Housing and Urban Development's Annual Survey of Income Limits for the Public Housing and Section 8 Programs \4\. The base monthly rental shall be established solely on the criteria in paragraph (b)(2)(i) of this section for persons with income exceeding the survey's ``low income'' limits, for persons refusing to provide appropriate evidence of income, and for persons who are dependents. A full time student or resident of an institution may be assumed to be a dependent, unless the person demonstrates otherwise; or, ...
\4\The Section 8 Program Income Limits are updated annually and are available on FHWA's Web site athttp://www.fhwa.dot.gov/real_estate/practitioners/uniform_act/policy_and_guidance/low_income_calculations/

See also appendix A § 24.402(b)(2)

The new rule relies on the U.S. Department of Housing and Urban Development's Annual Survey of Income Limits. A detailed example of how to make the appropriate calculation for potential low income tenants is in appendix A.

§ 24.402(c) Downpayment assistance payment contains a clarification that the entire rental replacement housing eligibility under § Sec. 24.402(b) can be applied toward a downpayment. The change is based on recognition of a disparity among Agencies as to the amount that can be used as the downpayment. Most State and Federal Agencies allowed the full amount of the rent supplement to be applied to the downpayment. Some, on the other hand, followed the guidance in former appendix A which limited the amount of the downpayment to what would ordinarily be required to obtain conventional loan financing for a decent, safe and sanitary dwelling. No such limits are included in the Uniform Act. The rule now allows the displaced person to apply the full amount of the rent supplement to the downpayment on a decent, safe and sanitary dwelling. Appendix A was revised to conform to the change in the rule.

Appendix A

Downpayment assistance. The downpayment assistance provisions in Sec. 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.

As discussed in Subpart A, related to the change in the definition of what constitutes a Comparable Replacement Dwelling, the revised definition needs to be considered when selecting comparable housing to be used in payment calculations.

§ 24.403(a) Determining cost of comparable replacement dwelling removed the provision from sub paragraph (1) that Agencies had to adjust the asking price of selected comparable replacement dwellings when computing replacement housing payments. The prior rule required the Agency, to adjust the asking price of a comparable replacement dwelling to reflect negotiated selling prices based on a survey of the local housing market. That requirement, because it could result in a replacement housing payment computation that was different than the price of a comparable dwelling, was considered burdensome and could force the displaced person to become a negotiator. The revised rule removes this obligation on the displaced person, and relieves the Agency of the administrative burden of conducting a market survey to determine the adjusted sales value. The procedure for determining a comparable dwelling has not changed. The replacement housing payment is to be based on the list price of the comparable dwelling.

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Subpart F -- Mobile Homes

This subpart dealing with the unique relocation issues involved in handling displacements from a Mobile home was reorganized for clarity and ease of use.

The basic content remains unchanged. As indicated under subpart A, the new definition for a mobile home now includes both manufactured housing and recreational vehicles (when local codes consider them to be decent, safe and sanitary).

The rule incorporates the factors that determine whether a mobile home displacement is based on an acquisition of real property or a move of personal property, within Sections 24.502 and 24.503.

Subpart E provides replacement housing payments for an owner occupant or tenant occupant displaced from a conventional dwelling. Subpart F provides similar payments for an owner occupant or tenant that is displaced from an acquired mobile home. However, mobile homes may instead be considered personal property and relocated, rather than purchased, which in turn may lead to the determination that the occupant is not displaced from his/her dwelling. The reorganized subpart consolidated the necessary displacement determination, locating each with the applicable payment eligibility provisions.

The provisions in § 24.502(c) allow a 180-day mobile home owner, that rents or leases land that is acquired, to apply any replacement housing and/or rental assistance payment towards the purchase of a replacement site or to the eligible purchase price of a conventional dwelling or mobile home. This would eliminate the confusion over combining the two payments (for the mobile home and the mobile home site) in the purchase of a conventional dwelling. Therefore, in the case where the mobile home owner buys a conventional dwelling, a rental supplement for the displacement land (site) can be added to a housing supplement. The housing supplement is limited to $22,500 (as an owner of the mobile home) and the land site rental supplement is limited to $5,250, i.e. a total of $27,750. If a comparable conventional dwelling cannot be purchased for $27,750, the provision of last resort can be implemented. The total payment must be used toward the purchase of replacement decent, safe and sanitary housing.

Updated: 04/02/2013
HEP Home Planning Environment Real Estate
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