2013 Acquisition 103 Part a Student Training Manual

7/28/2019 2013 Acquisition 103 Part a Student Training Manual

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The Office Of Real Estate

Ohio Department of Transportation

2013 Training CourseAcq. 103

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ACQUISITION 103STUDENTTRAINING MANUAL


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ACQUISITION 103

PART A


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TABLE OF CONTENTS

5300 SPECIAL ACQUISITION PROCEDURESPAGE

5301 Early (Advanced) Acquisition ..................................................................................... 53-15301.01 Procedure to Acquire ............................................................................. 53-1

5301.02 General Considerations for Early Acquisitions...................................... 53-1

5301.03 Federal Reimbursement for Early Acquisitions ..................................... 53-3

5301.04 Early Acquisitions for Protective Buying and Hardships ...................... 53-4

5301.05 Federal Reimbursement When Early Acquisition is by Donation ........ 53-7

5301.06 Early Acquisition of Contaminated Property ......................................... 53-8

5302 Acquisition of Tenant-Owned Improvements that are Real Property . 53-165302.01 Procedures to Acquire Real Property Owned by a Tenant ................... 53-16

5303 Acquisition of Publicly Owned Property ................................................................. 53-325303.01 Offer Used When ODOT Does Not Have

Eminent Domain Authority .................................................................. 53-33

5303.02 Offer Used When ODOT Has Eminent Domain Authority ................. 53-33

5303.06 Acquiring Real Property from State Agencies ..................................... 53-34

5305 The Uneconomic Remnant ........................................................................................ 53-345305.01 Procedure to Determine if a residue is Uneconomic ............................ 53-35

5305.02 Making the Offer to the Owner ............................................................ 53-36

5305.03 The Instrument Used to Purchase the Uneconomic Remnant .............. 53-37

Quiz 1 ................................................................................................. 53-45

5306 Acquisition Procedures for Excess Land Parcels .................................................... 53-47

5306.01 Procedure for Excess Land .................................................................. 53-47

5307 Procedure to Obtain a Right of Entry ...................................................................... 53-485307.01 Procedure to Obtain a Right of Entry from the Owner ........................ 53-48

5407.02 Rights of Entries Required for Emergency Projects ............................ 53-49

5308 Damage Claims ........................................................................................................... 53-57

5308.01 Procedure for Damage Claim Settlements ........................................... 53-575308.02 Procedure to Use the Damage Claim Form - RE 64 ............................ 53-58

5308.03 Reportable IRS Income ........................................................................ 53-59


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5300 SPECIAL ACQUISITION PROCEDURES

5301 Early (Advanced) Acquisition

Early acquisition is defined in Federal regulation 23 CFR 710.105 as: Acquisition of real

property by State or local governments in advance of Federal authorization or agreement.

Further, under the requirements of 23 CFR, Subpart E, Section 710.501: The state may initiate

acquisition of real property at any time it has the legal authority to do so based on program or

project considerations. The State may undertake early acquisition for corridor preservation,

access, or other purposes.

5301.01 Procedure to Acquire

A. Compliance to the Uniform Act

Any early acquisition must comply with the Uniform Act. The negotiation procedures

required by this Act are implemented in Section 5200 of the Real Estate Manual.

B. Form Used to Make the Offer

The District Office shall determine if the Plan Development Process (PDP) has

progressed to the point that ODOT has authority to appropriate the early acquisition

parcel. The District may need to seek guidance from the Ohio Attorney Generals Office

to determine if ODOT can appropriate the property. If ODOT has the authority to

appropriate, the offer will be made on the NIAGFO form. If ODOT does not have the

power to appropriate, the offer will be made on the form entitled Notice of Intent toAcquire and Good Faith Offer for an Early Acquisition.

5301.02 General Considerations for Early Acquisitions

A. FHWA Authorization

1. For Federal funded projects, a requirement of 23 CFR 710.307 is:As a condition of Federal-aid, the STD (State Transportation Department) shall

obtain FHWA authorization in writing or electronically before proceeding with

any real property acquisition including hardship acquisition and protective buying

(see 23 CFR 710.503). The STD must prepare a project agreement in accordancewith 23 CFR part 630, subpart C. The agreement shall be based on an acceptable

estimate for the cost of the acquisition.

Federal authorization obligates Federal money for the project, but ODOT cannot

use Federal funds until the Project Agreement has been executed. The Project

Agreement explains how costs are shared between ODOT and FHWA.


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The District shall request that ODOTs Office of Payroll and Federal Accounting

obtain approval of an Authorization/Project Agreement for the project from

FHWA. Once approved, ODOT has authority to purchase once funds have been

encumbered. The Office of Payroll and Federal Accounting shall mail the

Authorization/Project Agreement to the District Office.

Once the Authorization/Project Agreement is executed, Whole Take Authority

may be granted by FHWA based on preliminary plans. ODOT has 20 years to

purchase the right of way and to let the construction contract or it will forfeit

Federal funding for the right of way. At this point, the Department may make

early acquisitions subject to Federal approval.

ODOT cannot enter into negotiations with affected property owners until the

NEPA document has been approved and there is Federal authorization.

B. Full Takes and Partial TakesIf the acquisition is so early that right of way plans have not been finalized and it is

determined ODOT does not have appropriation authority, the acquisition shall be of the

entire property. Partial acquisitions shall occur when right of way plans have been

finalized and full right of way authorization has been granted by FHWA.

This procedure is established because when plans are not sufficiently final, the take is

not known with certainty. As a result, the residue also cannot be known with certainty.

Therefore, the estimate of compensation cannot be done in compliance with Ohio law.

C. The Environmental Document1. Any acquisition using Federal funds and occurring prior to approval of the

Environmental Document must comply with 23 CFR, Subpart E, and Section

710.501- Early Acquisitions.

2. Any acquisition made prior to the approval of the Environmental Document will

not receive Federal reimbursement. Excepted from this regulation are protective

purchases and hardship acquisitions that are subject to the provisions in 23 CFR

710.503 and that have received prior Federal approval for reimbursement,

However, under the provisions of 23 CFR 710.501, under certain conditions, the

purchase may be used as a credit toward the project.

3. Any early acquisition made prior to the approval of the Environmental Document

cannot influence the selection of an alternative alignment.

4. Early acquisitions of properties cannot be subject to Section 4f. Section 4f

applies only if there is Federal funding in the highway project. The requirements

of Section 4f are found in 23 CFR 771.135 and 49 USC 303. The requirements

under this section generally preclude the use of public land for highway projects if


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the land is utilized for public park, recreation area, or wildlife and waterfowl

refuge or any significant historic site unless there is no feasible or prudent

alternative. However, even if there are no alternatives, there cannot be an early

acquisition of a parcel subject to 4f.

5. Any non-residential property that is to be acquired early must have had adequateenvironmental studies completed prior to the acquisition. These studies are to

include at a minimum an environmental site assessment screening. For additional

information - see the Office of Environmental Services procedures.

5301.03 Federal Reimbursement for Early Acquisitions

Federal reimbursement for the acquisition of real property needed for a highway project can be

divided into 5 areas. The areas and the procedure required to receive reimbursement are as

follows:

A. Hardship and Protective Purchases1. These acquisitions occur prior to the approval of the Environmental Document for

the project and are only done in exceptional circumstances. Because the

Environmental Document is not yet finalized and approved, these acquisitions

must have a property specific environmental clearance. As long as the acquisition

is done in a manner that is compliant with 23 CFR 710.503, Federal

reimbursement is possible for these acquisitions. :

2. Hardship or protective purchases will be total takes.

3. The District does not yet have appropriation authority, so if agreement cannot be

reached, no acquisition will occur until the right of way plans are finalized andFHWA has granted full right of way authorization.

4. See Section 5301.04 of these procedures for more information regarding Hardship

Acquisitions and Protective Purchases.

B. Incidental Authority1. When this type of authority is granted by FHWA, the approval of the

Environmental Document has not yet occurred, but the approval is imminent. 23

CFR 710.203 (a)(3) allows reimbursement for preliminary acquisition including

title searches, appraisal activity and preliminary property map preparation

necessary for the completion of the environmental process. This process should

be used only when NEPA clearance is imminent; otherwise title and appraisal

reports will become outdated and will need to be updated or redone to reflect

changes in title and market conditions. At this point in time, it is possible for the

cost of titles and appraisals to be reimbursed as a preliminary right of way activity.


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Negotiation activities must be deferred until after the NEPA approval, except as

provided for in 23 CFR 710.503 for protective and hardship acquisitions.

C. Whole Take Authority1. When this authority is granted by FHWA, the Environmental Document has been

approved and the project agreement is completed between FHWA and ODOT.The R/W plans are not yet finalized, but there is sufficient information to identify

properties that are totally contained within the right of way limits. The acquisition

process for whole properties can be initiated.

It may be possible to have appropriation authority for these whole/total takings.

However, guidance and direction must be obtained from the Attorney Generals

Office to determine the status of the project relative to the appropriation

regulations in the Ohio Revised Code.

D. Full Right of Way Authorization

1. Full Right of Way authorization is obtained from FHWA at that point in timewhen the Environmental Document has been approved, the project agreement has

been completed and the right of way plans have been finalized. ODOT has

appropriation authority subject to the provisions of the Ohio Revised Code,

Sections 163.05 (H) and 163.59 (B). The District Office can acquire partial take

acquisitions.

E. Credits

1. If the early acquisition occurs prior to the approval of the Environmental

document, ODOT may not receive reimbursement for the purchase from FHWA.

However, so long as certain conditions are met, the purchase may be used as a

credit towards the States share of the project. The conditions to receive credit aredefined in 23 CFR 710.501.

5301.04 Early Acquisitions for Protective Buying and Hardships

A. Requirements Applicable to both Protective Purchases and Hardship Acquisitions

1. Prior to final approval of the Environmental Document for the project and basedon the requirement of 23 CFR, Subpart E, Section 710.503, the District may

request approval from FHWA for early acquisition reimbursement for protective

purchases and/or hardship acquisitions under special and unique circumstances.

In all cases, there must have been an announcement to the public that the District

has recommended a preferred alignment and that appropriate environmental

studies have been completed.

FHWA approval must be secured prior to the obligation of funds and all Federal

requirements must be met. To obtain approval for hardship and protective

acquisition from FHWA, the District Real Estate Administrator (or designee) shall


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fill out the form for REQUEST FOR FEDERAL RIGHT OF WAY

AUTHORIZATION and send the form to the ODOT Office of Accounting. The

Office of Accounting shall package the application and send the package to the

FHWA.

2. Under the requirements of 23 CFR 710.503, the District must make a publicannouncement that the preferred location of the project has been recommended.There is no case to be made for hardship or protective buy unless there is certainty

as to the location of the project.

a. The public announcement may occur at public meetings, newspaperannouncement, et cetera. Larger projects with complex issues generally

require public meetings while small projects that are uncomplicated may

need only newspaper announcements, provided the public is aware of the

preferred location, to satisfy the requirements under 23 CFR 710.503.

bThe Department has complied with applicable public involvement requirementsin 23 CFR parts 450 and 771.

3. An environmental determination of the property must have been completed

subject to 23 USC 138 (4f), and if applicable, the procedures of the Advisory

Council on Historic Preservation are completed for properties subject to 16

U.S.C.470(f) (historic properties) and, clearance from SHPO (State Historic

Preservation Office) if the property is historic. Generally, a Categorical Exclusion

1 for the early acquisition parcel is a sufficient document to fulfill the requirement

of the environmental document.

4. The cumulative effect of several early acquisitions cannot prejudice the alignmentincluding the no build alternate.

5. To qualify for protective buying and hardships acquisitions, the project must be

included in the currently approved STIP (State Transportation Improvement

Program) or there must be a state-wide line item in the currently approved STIP

for hardship or protective buying. Additionally, the project must have advanced

to at least the sufficient stage when there has been public involvement and that

there has been an announcement to the public that a preferred location has been

selected.

6. All properties acquired for any Federal Aid project must be acquired in full

compliance with 49 CFR Part 24 (The Uniform Act), and Title VI of the Civil

Rights Act.

.

7. Subject to these requirements, FHWA can authorize a parcel or a limited number

of parcels, provided that the acquisition will not influence the selection of the

final alignment including the no build alternate. Where applicable and feasible,


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any structures should be maintained and not razed until after final NEPA

clearance.

8. Hardship and protective acquisitions should be confined to total takes of owners

properties lying within the limits of the proposed right of way corridor

B. Requirements for Protective Buying

1. Protective buying is the acquisition of a particular parcel or a limited number of

parcels to prevent imminent development, subdivision assemblage, re-zoning and

significant cost increases on the preferred location. The requirements of 23 CFR

710.503 mandate the District to clearly demonstrate that development of such

property is imminent and, such development would limit future transportation

choices and, the documentation must clearly demonstrate that development of the

land would preclude the use of that alignment and, that such development is

imminent. A significant increase in cost may be considered as an element

justifying a protective purchase to preserve the corridor alignment.

2. State law provides ODOT with the opportunity to purchase rights of way prior to

imminent development or zoning changes. ODOT shall be given notice of any

pending development, re-zoning, subdivision plat prior to their approval by a local

government and, ODOT shall have 120 days from the date of notice to acquire by

purchase or gift. This right based on Section 5511.01of the Ohio Revised Code,

comes after notification to the general community of a project, completion of

public involvement activities and certification of the making of a change in any

existing highway or the establishment of any additional highway by the director to

appropriate local government officials.

a. In order that notice of any proposed zoning change or subdivision plat orof any application for permit for land use or construction of a building may

be required from local government officials, certification of the making of

a change in an existing highway or the establishment of a new highway

must have been made to appropriate local government officials. Section

5511.01 of the Ohio Revised Code states in part:

Any changes made in existing highways by the director or any additional

highways established by the director following the public involvement

activities shall be certified to the following authorities interested therein:

the legislative authority of municipalities, board of county commissioners,

board of township trustees, municipal, county and regional planning

commissions, and the municipal, township or county officer authorized to

issue land use or building permits.

b. The best way to ensure local notification of an impending project is to

send copies of all plans (preliminary and final) to the local government

office(s). Update all plan submissions as new plans become available.


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C. Requirements for Hardship Acquisitions

1. A hardship acquisition is a purchase of a property at the owners request for the

purpose of alleviating a particular hardship to the owner. The owners hardship

must be unique, in contrast to others, because of an inability to sell their property.

The property owner must document on the basis of health, safety, financialreasons, or unique and unusual circumstances that remaining in the property poses

an undue hardship compared to others.

The announcement of a preferred location for a highway alignment may suspend

normal real estate activity within the proposed right of way. This situation may

result in severe hardship to persons who are forced to sell due to circumstances

beyond their control. In the interest of good public relations, all claimed hardship

cases shall be carefully investigated and, if conditions warrant, are to be purchased

within the limits of available funds.

2. Under the regulations in 23 CFR 710.503(c)(2), ODOT may concur in a requestfor hardship acquisition based on a property owners written submission that:

a. Supports the hardship acquisition by providing justification, on the basis

of health, safety or financial reasons, that remaining in the property poses

an undue hardship compared to others; and

b. Documents an inability to sell the property because of the impending

project, at fair market value, within a time period that is typical for

properties not impacted by the impending project.

5301.05 Federal Reimbursement When Early Acquisition is by Donation

A. The District Office must determine if there is any environmental contamination affecting

the property to be donated before it can accept any donation. Donations may be made at

any time during project development provided:

B. Federal requirements include:

1. The owner is advised that they have the right to have their property appraised.

2. When an appraisal is made, the appraiser offers the owner the right to accompany

the appraiser on the inspection of the property.

3. The owner is provided the right to negotiate and to be paid just compensation

prior to being required to surrender possession of its property.

4. For any property that is donated prior to NEPA clearance, the environmental

document must contain the following clauses:


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a All alternatives to a proposed alignment will be studied and considered

pursuant to NEPA.

b. The acquisition of such property will not influence the environmental

analysis of the project including the need to construct the project or the

selection of a specific location; and

c. The property will be re-vested in the grantor or its successors in interest if

such property is not required for the alignment chosen after a public

hearing, if required, and completion of the environmental document. See

Section 5501.331 of the Ohio Revised Code for more information.

C. See section 5310 of this Real Estate Manual for more information regarding acquisition

by donation.

5301.06 Early Acquisition of Contaminated Property

A. Any nonresidential property to be acquired early shall, prior to any purchase, have an

environmental site assessment investigation to determine the extent, if any; of any

contamination that affects the property. To avoid contaminated property affecting the

Districts highway project:

1. The District shall seek guidance from the Office of Environmental Services.

2. Testing of property needed for the project is permitted under Section 163.03 of the

Ohio Revised Code. That section of the law explicitly details the notice

requirements before ODOT can enter upon any owners property.

Acquiring real property that is contaminated presents unique challenges and as a result,

no one policy or procedure will work in every instance. When dealing with contaminated

properties, the most cost effective decisions should occur during the environmental and/or

preliminary plan process. Projects can potentially be designed around contaminated

properties at this stage of a highway project, thus avoiding costly clean ups, appropriation

and litigation for cost recovery.

B. In the event a contaminated property must be acquired for the project, a meeting must

occur so that all known facts can be discussed regarding the unique contamination issues.

Participants of this meeting are to include:

1. From the District:Real Estate Administrator and Environmental Coordinator

2. From Central OfficeAppropriate staff from Office of Environmental Services and Office of

Real Estate

3. Staff from the Transportation Section of the Ohio Attorney Generals Office.


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The purpose of this meeting is to discuss:

1. Ohio Environmental Protection Agency (OEPA) issues and/or United States

Environmental Protection Agency (USEPA) issues.

2. The type and extent of contamination within the take area and outside the takearea.

3. Pertinent information from BUSTR (Bureau of Underground Storage TankRegulation).

4. Environmental audits and the results of these audits.

5. Determine if the contamination would have been found if ODOTs highway

project had not impacted the property.

6. Determine if the owner would be required to clean the site if ODOTs project hadnot impacted the property.

7. Determination of how a property owner would typically clean or remediate the

site. This determination must be made without regard to ODOTs methods for

handling contaminated dirt.

8. Determine the cost to remediate the site.

9. Determine if a lending institution would lend mortgage money to someone to

purchase this property and if so, under what conditions, i.e. type of environmental

audits, interest rate, number of years, down payment, and finance charges.

10. Discuss the appropriation risk for this parcel.

11. Determine if the property is a land fill or USEPA site - if so, there needs to be

special approval.

12. Determine if Federal Highway Administration expects ODOT to seek recovery of

cleanup costs.

C. After the team has discussed these relevant issues and anything else that may be pertinent

to this particular contaminated property, decisions can be made regarding:

1. Determine if the District should acquire the property or avoid the property.

2. Determine the property right to be acquired such as WD or SH.

3. Determine how the property is to be valued such as:


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a. Appraise the property as clean and ignore the known contaminants; or,

b. Appraise the property as it really exists as contaminated; or,

c. Appraise the property as clean and subtract the cost to clean the site.

For more information regarding acquisition of contaminated property procedures, see

Section 5320 of the Real Estate Manual.

The next page is an example of a Notice of Intent to Acquire and Good Faith Offer for an

Early Acquisition.


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5302 Acquisition of Tenant-Owned Improvements that are Real Property

Improvements to real property acquired for a highway project may be owned by a tenant.

Common examples include signage and outdoor advertising devices. The following laws andregulations govern the acquisition of tenant-owned improvements determined to be real property.

1. The Uniform Act, Title III, Sections 302(a) and (b)

2. 49 CFR Part 24, Subpart B, Section 24.105

3. Ohio Revised Code, Section 163.60 (B)

4. The Ohio Administrative Code, Rule E, Section 5501: 2-5-06

These laws and regulations require a separate offer and negotiation with the tenant-owner.

5302.01 Procedure to Acquire Real Property Owned by the Tenant

A. The District Office must determine if the improvement in the area to be acquired is real

property and if so, also determine if the improvement is owned by the fee owner or the

tenant.

1. To make these determinations, the District shall use form RE 95 and comply withthe procedures for the RE 95see section 5201 of the Real Estate Manual

regarding the RE 95.

2. The fee owner and the tenant must agree that the improvement is owned by thetenant. Agreement is documented in writing and by signature on the RE 95.

B. The District Office must scope the appraiser to estimate the contributory value of the

tenant-owned improvement assuming the improvement is owned by the fee owner. The

contributory value of the improvement will be detailed in forms RE 22 and RE 22-1.

C. The District shall next estimate the salvage value of the tenant-owned improvement.

Salvage value is defined in 49 CFR 24.2 (a) (23). The acquisition procedures that further

explain salvage value are found in Section 5311 of the Real Estate Manual. The tenant is

offered the greater of contributory value or salvage value, regardless of the tenants

intention to remove the item or leave the improvement in place to be acquired.

D. There will be two separate negotiations when there are tenant-owned improvements

classified as real estate. One negotiation is with the fee owner of the real estate and the

other negotiation is with the tenant-owner of the improvement. The compensation

estimate (FMVE) is allocated between these ownerships.

1. Each negotiation will have its own file. The tenant owner parcel will be called a

BS parcel (BS means Bill of Sale parcel). There will be another file for the fee


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ownership position. The negotiator will keep adequate records including

Negotiators Notes that sufficiently document the acquisition process to comply

with the Records Keeping provision in 23 CFR 710.201 (f).

2. When the contributory value of the tenant-owned improvement is higher than the

salvage value, the contributory value becomes the offer to the tenant. The feeowners compensation amount is then calculated as follows:

a. Total FMVE( - ) The contributory value of the tenant-owned improvements

Amount offered to the fee owner

3. When the salvage value of the improvements is the higher amount, the salvage

value is the amount offered to the tenant. However, the fee owners offer remains

the same as if the tenants offer were based upon contributory value.

a. When the salvage value is the amount to be offered to the tenant-owner,the total of the offers to the fee owner and tenant-owner will exceed the

total of the FMVE on the RE 22. This overage amount is eligible for

Federal reimbursement.

E. The following conditions are to be met before any payment is made to a tenant-owner for

the acquisition of the real property improvement:

1. The tenant-owner must assign, transfer and release to the agency all of the tenant-

owners right, title and interest in the improvement to be acquired in consideration

for the agencys payment of compensation. To implement this regulation in to

procedure, the tenant-owner shall sign form RE 69 CC (Bill of Sale from Tenant)prior to any disbursement being made to the tenant. By signing this form, the

tenant is conveying all right, title and interest they have in the property to ODOT.

2. The owner of the real property on which the improvement is located is to disclaim

all interest in the improvement. To implement this regulation in to procedure, the

negotiator shall ensure the fee owner signs form RE 56 (Disclaimer form). By

signing this form, the fee owner is disclaiming any interest in the tenant-owned

improvement.

a. This form must be signed by the fee owner prior to any disbursement of

funds being made to the tenant. The form may be signed by a fee owner

when the RE 95 is being prepared.

3. The payment of compensation cannot result in the duplication of any

compensation otherwise authorized by law. To implement this regulation in to

procedure, the District Office must ensure these conditions are met before


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disbursing any funds to any tenant-owner as there can be no duplication of

compensation. The risk of duplication generally can occur by:

a. Paying a tenant-owner for the improvement in the acquisition process andthen relocating the same improvement as a relocation benefit.

b. Paying the fee owner 100% of FMVE and then paying the tenant owner ofthe improvement.

F. As required in 49 CFR 24.105 (e): Nothing in this subpart shall be construed to deprive

the tenant-owner of any right to reject payment under this subpart and to obtain payment

for such property interests in accordance with other applicable law. To implement this

regulation, if the Department and any of the owners cannot agree on price and terms, the

owner and the tenant shall be informed that ODOT will submit the entire parcel for

appropriation and the court shall then determine the division of ownership, the amount of

compensation and the distribution of money.

The next few pages are the forms used when ODOT is acquiring TenantOwned

Improvements of Real Property.

RE 56 Disclaimer

The RE 95

RE 68 Salvage Value Estimate

The Notice of Intent To Acquire and Good Faith offer

RE 69cc Bill of Sale from Tenant

After form RE 69cc (Bill Of Sale) example go to Case Study# 1


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5303 Acquisition Of Publicly Owned Property

Generally, the District Office will acquire areas needed for rights of way when ODOT has

eminent domain authority over the public entity. Examples include cities, counties, schoolboards, townships, et cetera. Central Office Real Estate will acquire areas needed for rights of

way when ODOT does not have eminent domain authority over the public entity. Examples

include state and federal government. In these circumstances, the District is responsible for the

preparations of title reports, title updates, appraisals, appraisal reviews, the establishment of

FMVE and the recording of any documents. Central Office Real estate is responsible for

negotiations and closings.

In unique circumstances and with agreement between the District Office and Central Office Real

Estate, either office may acquire public property typically acquired by the other. Further, if there

are tenant-owned improvements or other third party interests in improvements on the publically

owned property to be acquired, there must be a clear understanding between the District andCentral Office as to who will acquire the fee-owned real estate and who will acquire the other

interests.

The acquisition of real property from public agencies presents unique problems which can

include:

1. The agency may not be able to convey the property right needed for the project.

2. The agency may have their own review process and may not approve of the

ODOT acquisition, project or instrument.

3. The agency may not accept the ODOT environmental document.

4. Agencies have been down-sized and may not be able to process the acquisition as

expediently as ODOT would desire.

5. The agency may refuse to convey the property right needed for the project.

6. ODOT may not have the power of eminent domain.

7. The acquisition of publicly owned real estate may require a long time period asagency jurisdiction may overlap requiring the negotiator to simultaneously deal

with two or more agencies, as well as more than one person in each agency for

one acquisition parcel denoted on the highway plans. The time period to acquire

can vary dramatically from 6 to 12 months up to 2 to 3 years.

8. A local government may require an ordinance or resolution to be passed so that

land or property rights can be transferred.


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9. An acquisition may require a Bill to be passed into law by the Ohio General

Assembly.

For these reasons, the District must include the public agency in the plan development

process to ensure ODOT has adequately considered the agency in the public meetingprocess. Additionally, the District must ensure adequate time is given to the acquisition

process so the property right needed from the agency can be acquired.

5303.01 Offer Used When ODOT Does Not Have Eminent Domain Authority

A. ODOT does not have the power of eminent domain when acquiring real property from

federal agencies, state agencies or from public colleges and universities receiving state

funds. Often these acquisitions occur by a transfer of jurisdiction or some other method

not requiring an offer. However, when circumstances require an offer to be made, the

following procedure can be used.

As ODOT does not have the power of eminent domain for these acquisitions, it will notuse the Notice of Intent to Acquire and Good Faith Offer when making an offer. When

making an offer for these types of acquisitions, the Summary Statement OfferLetter is

to be used.

1. When ODOT does not have the power of eminent domain, the acquisition isregulated by 49 CFR 24.101 (b) (3). This regulation exempts ODOT from

compliance to the standards in 49 CFR Subpart B. However, any tenant displaced

by such an acquisition is considered a displaced person and the relocation

provisions mandated in 49 CFR are applicable to these tenants.

2. The acquisition must comply with the Uniform Act.5303.02 Offer Used When ODOT Has Eminent Domain Authority

A. When ODOT has the power of eminent domain over a public agency that is not a state or

federal agency, then it must use the Notice of Intent to Acquire and Good Faith Offer

when making an offer.

B. The acquisition must comply with the Uniform Act.


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5303.06 Acquiring Real Property From State Agencies

A. The negotiator shall negotiate with the agency having jurisdiction over the property. It is

recommended the negotiator shall first contact the Deputy Director of the agency to

identify that agencys process to transfer real property to the ODOT.

B. The negotiator shall acquire the real property by interagency transfer or other mutually

agreed to format and shall follow the same general procedure described in Acquisition

from a Local Public Agency. ODOT shall, only in rare instances, transfer funds with

other State agencies. Interagency transfers or other agreements are generally coordinated

through the ODOT Office Chief Legal Counsel or the Transportation Section of the Ohio

Attorney Generals Office.

1. Title to these parcels is already in the name of the State and for these acquisitions.

Only jurisdiction is passed to ODOT. Ohio Revised Code, Section 5301.012

requires identification of the agency that acquired the real property and theidentification of the real property interest conveyed.

2. During negotiations, ODOT and the State agency should agree as to whom shall

prepare the instrument of transfer. The proposed instrument shall be submitted

for review and concurrence by Office of Chief Legal Counsel or the

Transportation Section of the Ohio Attorney Generals Office prior to execution

and the disbursement of any funds.

5305 The Uneconomic Remnant

An uneconomic remnant may occur when there is a partial taking leaving a residue property

having little utility to the owner or value to the owner resulting in a burden to the owner.

Determining that such a residue is an uneconomic remnant provides a measure of relief to the

owner.

Laws regulating the procedures for an Uneconomic Remnant include:

1. Uniform Act, Title III, Section 301, No. 9

2. Ohio Revised Code, Section 163.59 (I)

3. Ohio Revised Code, Sections 5501.32

4. 49 CFR Subpart B, Part 24.102 (k)5. Ohio Administrative Code, Section 5501: 2-5-06, Rule B (11)

The definition of an uneconomic remnant as cited in 49 CFR, Subpart A, Section 24.2 (27) is:

The term uneconomic remnant means a parcel of real property in which the owner is left

with an interest after the partial acquisition of the owners property, and which the

Agency has determined has little or no value or utility to the owner.


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5305.01 Procedure to Determine if a Residue is Uneconomic

A. The agency makes the determination if a remnant parcel is uneconomic.

1.

The owner does not make the determination. The appraiser does not make thedetermination. All the appraiser does is estimate the value of the property before

the taking and the value of the property after the taking.

2. The review appraiser does recommend if a residue property is uneconomic and the

recommendation is documented of form RE 22.

3. The agency determination that a residue property is an uneconomic remnant is

made when the RE 22 is signed by a person of authority within the District Office.

This act establishes a remnant as uneconomic.

4. The District is not to determine any nonresidential parcel as uneconomic until ithas coordinated the decision with the District Environmental Coordinator (DEC).

a. Before the District Office purchases any property determined to be

uneconomic, the DEC shall be contacted to determine if the environmental

site assessment that was done for the project included the area occupied by

the uneconomic remnant. This should occur early in the acquisition

process and prior to the appraisal being made. If a remnant did not have

an assessment, additional environmental site assessment(s) will be needed

to determine if the property is contaminated. When a residue property has

been determined to be contaminated, the District Office shall seek

guidance from Chief Legal, the Attorney Generals Office and CentralOffice Real Estate before making an offer for the remnant parcel.

5. The District is not to determine any remnant parcel uneconomic if the property is

valued $50,000 or more without concurrence of the Manager of the Acquisition

Services Section, Office of Real Estate, Division of Engineering.

6. Uneconomic remnant considerations:

Often, it is readily apparent that a residue property is uneconomic. For example,

land locking a property or reducing a vacant property to such a small size that it

no longer can be developed are common scenarios causing a remnant to be

uneconomic to the owner.

However, changes in the highest and best use do not automatically cause residues

to be uneconomic. A diminution in value does not automatically cause an

uneconomic residue. The District Office must analyze each scenario and make

decisions based upon the unique fact patterns that are individual to each property.

Decisions can be based on:


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a. Determine if the owner can reasonable sell the property in the market.b. Determine if the residue can be developed.c. Determine if the residue can continue to be used, even if the use is

different than before.

If the owner of the residue property has the potential to do these things, then the

residue property probably still has utility to the owner.

5305.02 Making the Offer to the Owner

If the acquisition of only a portion of a property would leave the owner with an uneconomic

remnant, the agency shall offer to acquire the uneconomic remnant along with the portion of the

property needed for the project49 CFR Subpart B, 24.102(k).

The following procedures implement this regulation.

A. ODOT will make two offers to the property owner.

1. The first offer is for the property needed for the project. If agreement cannot be

reached, ODOT has the power to appropriate this property.

2. The second offer (made on the same negotiation visit) is for: a) The propertyneeded for the project: plus, b) The remnant parcel which has been determined to

be uneconomic. The sale of an uneconomic remnant is voluntary on the part of

the owner, thus the owner can decline to sell. However, ODOT is mandated by

law to make the offer to acquire the uneconomic remnant.

3. The offer form used is entitled Notice of Intent to Acquire and Good Faith Offerfor an Acquisition Creating an Uneconomic Remnant. The offer is to be

delivered personally or by certified mail.

B. The separate and distinct offer for an uneconomic remnant is to be documented in the

Negotiators Notes.

C. Should appropriation become necessary, the negotiator is to advise the owner that the

uneconomic remnant will not be part of the appropriation. In the event a property owner

does request that an uneconomic remnant be appropriated, the District Office shall seek

advice from the Ohio Attorney Generals Office.


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5305.03The Instrument Used to Purchase the Uneconomic Remnant

A. ODOT purchases the fee simple interest of any uneconomic remnant.

1. Therefore, the District Office must ensure the title report has adequatelyresearched the title of the entire property and not just the take area. This mayrequire a title update.

2. Legal descriptions (the Exhibit As) are typically done during the plandevelopment stage and not at the acquisition stage of a project. As a residue is

generally not determined uneconomic during the plan development stage, it is

unlikely that a legal description of a residue uneconomic remnant has been

created. Therefore, once an offer has been made to the owner and the owner has

agreed to sell the uneconomic remnant to ODOT, the District will need to create

the legal description of the uneconomic remnant parcel.

3. The legal description of the remnant is inserted into the appropriate RX form,generally form RX 310, that describes the property right for a fee simple estate.

This RX form is then attached to the appropriate conveyance form.

The next page is an example of the Notice of Intent to Acquire and Good Faith Offer and

Acquisition of Uneconomic Remnant.


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5306 Acquisition Procedures For Excess Land Parcels

Excess land is owned by ODOT and is outside of the highway right of way or is land desired by

the District Office that is not needed for the highway right of way. Generally, excess land desired

by the District which is not needed for a highway project cannot be acquired by the use ofeminent domain and the acquisition must be by a voluntary sale on the part of the owner. Excess

land is regulated under Chapter 5501 of the Ohio Revised Code and permits ODOT to make a

voluntary decision to purchase. Additionally, excess land is also property owned by ODOT

which is no longer needed for right of way. This type of excess land may be disposed of by

auction, sealed bid or used by ODOT to offset the acquisition cost of a parcel. See the Property

Management section of the manual for more information.

5306.01 Procedure for Excess Land

A. The acquisition procedures for excess land parcels are the same for any other taking and

will comply with the provisions under the Uniform Act.

B The District shall purchase the fee simple property rights of the excess land. The Exhibit

A which is attached to the instrument shall be form RX 310.

C. Excess lands shall be exempted from taxation, the same as other highway lands owned by

ODOT in fee simple, so long as there is no private use of the property. Section 5600 of

this Manual describes the tax remittance procedure to be followed. Lands acquired and

rented to others are not eligible for exemption from taxation.

D. Excess land parcels are identified by the following suffixes:1. E, ER and EL2. Right of way plans may preliminarily identify a residue as an uneconomic remnant

parcel with the suffix letter E. If ODOT declares a residue as uneconomic and

the property owner agrees to sell the remnant to ODOT, the letterR is added to

the E and the new suffix becomes ER for plan, billing and record purposes.

E parcels which are unconverted to ER, or, E parcels where the agency does

not declare the parcel as an uneconomic remnant become inaccurate land

designations and need to be removed from the plans.

3. The suffix letter "EL", in conjunction with the ownership parcel number, indicates

an area that is an excess land parcel. This is land which does not fit the criteria

for an uneconomic remnant and is outside the needed right of way limits. This

land may only be acquired by negotiations.

4. "EL" parcels usually are added to the plan during the acquisition process as theyare approved for purchase by the District.


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5307 Procedures to Obtain a Right of Entry

A right of entry is a voluntary agreement between ODOT and the property owner. A signed

Right of Entry Contract allows the owner to convey to ODOT the right for ODOT to enterupon the owners property for construction purposes. It is a trespass if ODOT is on private

property without the owners permission unless ODOT has appropriated the property.

Permission is documented by the Right of Entry Contract.

ODOT or its agents may also enter upon an owners property for the purpose of making surveys,

soundings, drillings, appraisals and other examinations as are necessary for plan development

and property valuation without a Right of Entry Contract. However, this kind of entry must be

done in a manner compliant with Section 163.03 of the Ohio Revised Code.

The right of entry process does not alleviate project management responsibilities. Ultimately,

the District Office must acquire the property rights per the highway plan. Therefore, negotiationswill continue after the property owner conveys to ODOT the right to enter upon his or her land.

If agreement as to price and terms cannot be worked out, the District Office must forward the

parcel to the Attorney Generals Office to be appropriated.

5307.01 Procedure to Obtain the Right of Entry From the Owner

A. When a right of entry is needed, the agent is to use The Right of Entry Contract, form

RE 222, with the correct Exhibit A and the Exhibit B forms. The Right of Entry

Contract is a form prescribed by the Ohio Attorney Generals Office (AGO) in

compliance with Section 5501.31 of the Ohio Revised Code. Therefore, the Right of

Entry Contract cannot be amended without AGO permission.

1. Exhibit A - Attached to the RE 222 and it describes the area to be occupied byODOT or its agents. The Exhibit A is to be created by the District. An Exhibit

A is attached to any right of entry.

2. Exhibit B - Exhibit B is form RE 222-B and is to be attached to the RE 222.The purpose of the RE 222-B is to describe any improvements in the area to be

occupied that will be removed or not removed, the timing of ODOTs occupation

of the area or anything else that may be unusual or pertinent. An Exhibit B is

attached to any right of entry. If the use of the RE 222-B does not apply, the formmust still be a part of the Right of Entry Contract and the word None is be

inserted onto the form.

B. Money must be paid to the owner to make the right of entry contract enforceable. If more

than a nominal amount is paid for the right of entry, it must be done with knowledge of

mortgage amounts and claims that others may have to the FMVE. If ODOT requests the

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Right of Entry Contract. In this situation, $1.00 is adequate consideration. The owner

must sign a W-9 before payment can be made to any owner.

C. The Right of Entry Contract does not have an expiration date. If the lack of an

expiration date becomes an issue during negotiations, the negotiator may discuss this

issue with the District Real Estate Administrator. Once a date can be established, thenegotiator may insert the date into the Exhibit B and both the owner and ODOT are to

initial the date.

D. The negotiator will create two copies of the Right of Entry Contract with an Exhibit A

and an Exhibit B. The negotiator will obtain the owners signature on both copies and

then is to submit the copies to the District Office for authorized signature. The owner is

to be provided a signed copy and the other copy is maintained in the acquisition parcel

file

E. Recording the Right of Entry Contract

The District Office may record the Right of Entry Contract anytime and for any reason.It is prudent to record executed rights of entries ensuring the right of ODOTs contractor

to be on the property.

F. The right of entry process must be documented in the Negotiators Notes.

5307.02 Rights of Entries Required For Emergency Projects

A. Even in an emergency situation, ODOT only has the right to be within its established

right of way limits. If the District goes outside of these limits and onto private property,

it is a trespass. Therefore, the District must have permission to go onto private property.

B. In an emergency, the title work and appraisal may not have been done. Therefore, the

District must do their best to ascertain the ownership of the property as quickly as

possible. Depending on the extent and the severity of the emergency, determining

ownership can range from a knock on the door to a trip to the courthouse to verify the last

deed of record to a full title report that complies with Section 5100 of the Real Estate

Manual.

C. Once ownership of the property needed for a right of entry is known, the District or

their agent is to request the owner to sign a Right of Entry Contract. This contract

documents the owner has given his/her permission for ODOT to enter upon their

property.

1. The District agent must be prepared to explain the nature of the emergency and

reasons why a right of entry is needed and be ready to answer questions and

concerns that an owner may have about the project or the affect the project will

have on the owners residue.


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2. The District agent is to create Negotiators Notes (RE 60-1) that document the

visit, the conversation and the issues and concerns presented by the owner.

D. The District agent is to create the Right of Entry Contract with the required attachments

which are Exhibits A and B. See Section 5307.03 of these procedures for more detail.

E. In an emergency situation, the District may not have enough time to create a complete

legal description that accurately describes the area of the right of entry. The area to be

occupied by ODOT may be described by any of the following:

1. Legal description; or

2. Aerial photograph with project area detailed on the photograph; or

3. Tax map with project area detailed on the map; or

4. Anything else that would reasonably describe to the property owner the areaencumbered by the Right of Entry Contract.

F. The property owner must be paid money to make the Right of Entry Contract valid and

enforceable. Because the District is contending with an emergency situation, it is unlikely

that the appraisal process has been completed and as a result, FMVE has not been

established. The District has complete discretion to decide the amount of money that is

appropriate to be used to secure a rights of entry for emergency projects. At a

minimum, $1.00 must be offered and paid. The owner must sign a W-9 before payment

can be made to the owner.

G. Ultimately, after the right of entry is secured, the District must create the right of wayplan and the property right needed for the project must be acquired. This acquisition

process must comply with the Uniform Act and with the acquisition procedures of

ODOT.

The next few pages are examples of the form RE 222 Right of Entry


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5308 Damage Claims

Damage claims discussed in this section are claims made against ODOT by property owners who

have suffered damage due to:

1. Entry upon the property for highway project activities for purposes including

making surveys, soundings, drillings, appraisals and other examinations - see

Ohio Revised Code, Section163.03 and 5517.01.

Damage claims arising from or out of highway construction or maintenance activities shall be

referred to the District Construction Department or the Highway Maintenance Administrator.

The Districts may only settle damage claims when there is legal authority authorizing ODOT to

settle. When ODOT doesnt have legal authority to settle a claim, settlement must be effectuated

through the Court of Claims Section, Office of Chief Legal Counsel.

5308.01 Procedure For Damage Claim Settlements

A. The District shall investigate the claim to establish the ODOTs responsibility, if any. If

compensable damage is found, the District may negotiate a settlement and prepare a right

of way bill for payment.

1. Documentation to support the compensable damage determination shall include

itemized cost estimates, drawings, photographs, plans or other appropriate

evidence as supplied by the District. A statement from the negotiator concerning

the original transaction should be included in the record as well as a statement on

the contractor's operation, if applicable to the claim.

2. Where damage is more extensive, an appraisal may be made and approved to

determine the amount due the property owner.

3. Damages caused by the contractor must be fully described and amounts

adequately supported. Common situations are described as follows:

a. Test Holes and Survey Damages

i. The date of entry upon the property must be shown and the

location of the damage referenced to the center line of survey, if

established. A copy of the test hole crew chief's report on thedamage to the property should be attached to the District report.

ii. When the damage claimed was the result of a consultant's crew, the

consultant's contract should be examined for clauses which provide

that the consultant settle the claims for damages by his survey

crew(s). An investigation and report by the District are a

requirement even though the consultant may be liable. Where


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compensable damage occurs and the consultant is liable, he will be

notified by certified mail. Coordination is required with the Office

of Consultant Services and the Office of Chief Legal.

b. Loss of Crops

i. The District shall determine what crop is in the field, the amount ofthe crop area that has been damaged and the cost to harvest the

crop. This information can be obtained from the farmer or U.S.

Agricultural Stabilization and Land Conservation Agency (ASAC)

who maintain lists of contractors who perform harvest services.

ii. The District shall not double compensate for crop damages.

Therefore, the District shall not pay damage claims for areas which

are taken as part of the highway project within the harvest year.

iii. The District shall determine the crop yield from the damage area.

This information can be obtained from the County AgriculturalExtension Office which maintains statistics on average crop yield

per acre. The District shall determine the cash value of the crop at

harvest. This information can be obtained from local grain

elevator businesses. The farmer is due the value of the crop at

harvest minus the cost to bring the harvest to market.

5308.02 Procedure to Use the Damage Claim FormRE 64

A. The form used to settle damage claims is the Special Waiver of Damage form (RE 64).

B. Any RE 64 submitted for payment must contain a description of the alleged damage, itslocation referenced to the center line of survey, if established, any payments previously

made to the property owner (or his predecessor in title), and the recording data of all title

papers, if any.

C. Those having ownership interest are to sign the RE 64. The dower interest is not required

to sign. In cases where persons other than the owner of the land (such as tenant farmers)

have an interest in the amount to be paid, the RE 64 is signed by both and the warrant is

issued jointly. In cases where one of the two parties desires the other party to receive the

entire payment, the District shall create a letter of assignment of compensation to the

other party. This letter is to describe who receives what and all parties shall sign such a

letter. The warrant is then issued to the assigned party.

D. Payment is supported by the signed RE 64 and statements of how the amount was

determined, and other pertinent materials and information.


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5308.03 Reportable IRS Income

A. When an ODOT agent negotiates with a property owner for restitution or reimbursement

for these kinds of damages, the negotiator must inform the property owner that if he/she

accepts the consideration for the restitution, that the consideration may be reported to the

Internal Revenue Service (IRS) as income. However, no representation is made by anODOT agent as to the tax consequences of the payment amount specified.

There are conditions when the consideration shall not be reported to the IRS. These

conditions are:

1. When the owner is reimbursed by ODOT for actual costs of services and

completed by the contractor. ODOT is to pre approve the actual costs prior to the

owner spending any money to avoid any argument of unreasonable or excessive

charges, or

2. The owner may pay a contractor directly utilizing his/her own funds and then seekreimbursement from ODOT by submitting the actual paid invoice from the

contractor. Again, ODOT is to pre approve any costs prior to the owner spending

any money to avoid any argument of unreasonable or excessive charges, or

3. The owner may schedule a contractor to work at an agreed on price and when the

work is completed, submit the bill to ODOT for reimbursement. With this

option, ODOT actually pays the owner after work has been completed. ODOT

must pre approve any contractor cost prior to the owner authorizing any work to

avoid arguments of excessive charges.

When the owner receives consideration for restitution or reimbursement for damages and,the owner retains such consideration and does not pay the amount to a contractor to

rectify the damage, the consideration received by the owner shall be reported as income

on the owners 1099 IRS form in accordance with IRS regulations.

The next page is an example of the form RE 64 Agreement and Waiver of Damages


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