Basic Appraisal Requirements
Agencies contracting with fee appraisers on federal aid projects need to be aware that the appropriate definition of market value must follow 49 CFR 24.2(a)(3) which defines an appraisal as "... a written statement independently and impartially prepared by a qualified appraiser setting forth an opinion of defined value of an adequately described property as of a specific date, supported by the presentation and analysis of relevant market information."
Note that this definition differs from that used in appraisals prepared for lending institutions.
In addition, when arranging for the services of fee appraisers, the scope of services should reference 49 CFR 24.103, Criteria for Appraisers. This section addresses fundamental requirements such as the 5-year sales history of the subject property (not three years as per USPAP), project influence, owner retention of improvements, etc.
Title 49 CFR Part 24 is just a click away:
http://www.fhwa.dot.gov/realestate/49cfr.htm
Scroll down for more "Tips and Advice."
-------------------------------------------------------------------------------
Major Local Agency Project: South Park Bridge replacement
King County obtained federal aid for to replace the South Park Bridge over the Duwamish Waterway. Below, King County executive Dow Constantine and Gov. Christine Gregoire address a good-sized Cinco de Mayo crowd at the May 5, 2011 groundbreaking ceremonies.
--------------------------------------------------------------------------------
Previous topic #1: Review your Approved Right of Way Procedures!
All local agencies needing to acquire property rights to construct projects with federal financial assistance are required to have approved right of way acquisition procedures on file with WSDOT (LAG 25.02). This requirement is intended to assure that the acquisition process conforms with federal law, i.e., the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended (the “Uniform Act”).
Approved Right of Way Procedures are issued with a cover letter which further define the limits of your agency’s authority to acquire. In the majority of cases, agencies are required to contact the Local Agency Coordinator (contact info at left) prior to making first offers to property owners. This is intended to protect agencies from making missteps, as has been the case on more than one occasion in recent months.
Failure to adhere to this requirement will cause delays in the right of way certification process with predictable impacts to project schedule. Please take a moment to review your agency’s Approved Right of Way Procedures with this in mind.
Previous topic #2: The Right of Way Certification letter format has changed!
All right of way certification letters (Cert #1, Cert #2 and Cert #3) must now be submitted in a new, expanded format. The basic letter remains the same, but an addendum sheet has been added which lists additional information about the types of real property acquisitions made for a given project.
See the sample Cert #1 and the Cert #2 letters to view the new format. Contact the Local Agency Coordinator if a Cert #3 is contemplated. A quick review of the samples should make it clear how this additional information is to be submitted. All fields in the addendum sheet must be completed, even when the parcel subtotal is zero.
The examples are in pdf format, and anyone wishing a Word version should contact the Local Agency Coordinator.
Please note: the sample Project Description on the first page was chosen from a real project. It was selected because it is simple, direct and clear.
Previous topic #3: LAG Manual Chapter 25 has been substantially revised!
Earlier this year WSDOT and the FHWA undertook a substantial revision of Chapter 25 of the Local Agency Guidelines (LAG) Manual. The new version is now on line, and a link to it is provided in the sidebar, left. If users have been relying on a printed version of LAG 25, it is now obsolete. Continued use of obsolete versions could lead to problems or delays with right of way certification.
The revisions primarily take two forms: a reorganization (and renumbering) of the various subsections, and expanded definitions, explanations and clarification of existing rules and requirements. Topics such as agency concurrence and diaries formerly contained within larger subsections have been given their own subsections. The goal in undertaking these revisions is to make LAG 25 more accessible to its users so that fewer questions arise when implementing the chapter’s requirements.
Previous topic #4: Title Clearing
Until recently, in certain instances, right of way certification has been accepted by WSDOT and recommended to the FHWA when the funds representing just compensation have been deposited in escrow to await final title clearing action. On advice from WSDOT Headquarters, this practice will no longer be accepted.
When funds have been deposited in escrow, an agency requesting acceptance of their right of way certification must first provide a copy of the escrow disbursement statement before that certification can be accepted. WSDOT realizes that this has the potential to lengthen the overall right of way acquisition process. We recommend that preparatory steps be taken as early as reasonably possible in the overall acquisition process to identify liens and initiate title clearing action.
Agencies also have the option of accepting a degree of risk with regard to title clearing in the event of a partial acquisition. For example, Agency X, in accordance with its internal policies, foregoes title clearing action on partial acquisitions when the dollar amount of compensation is under $5,000. When doing so, the agency should pay particular attention to the principles outlined in the WSDOT Right of Way Manual, Chapter 8; in particular Section 8-3.4. NOTE: the foregoing applies to deeds of trust only. Tax liens, assessments and child support judgments must always be cleared.
Previous topic #5: Approving the Determination of Value
Recommendation: include the dollar amount of just compensation in the concurrence statement.
Why: plan changes and other factors sometimes mean that a parcel file will contain more than one DV. Experience has shown that while this shouldn’t be a problem, it sometimes leads to confusion.
In the pre-certification file review it has occasionally proven impossible to decipher which DV the agency is concurring with. A good diary sometimes makes it possible to sort things out (hint, hint), but not always.
Here’s a sample statement which you are welcome to adopt:
“The [agency official / title] of [name of agency] does hereby indicate concurrence with the above determination and with the recommended compensation in the amount of $_______, and does furthermore authorize action by ___________ to proceed with the acquisition of the property according to established procedures.”