OHIO DEPARTMENT OF TRANSPORTATION OFFICE OF REAL ESTATE. Changes and Updates to the Real Estate Manual

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1 OHIO DEPARTMENT OF TRANSPORTATION OFFICE OF REAL ESTATE DATE: March 10, 2017 TO: FROM: RE: Users of the Real Estate Manual James J. Viau, Manager, Relocation Section Changes and Updates to the Real Estate Manual The only current and accurate source of ODOT s Real Estate Manual is on the Office of Real Estate s website. This site is located at: Desired information can be accessed by scrolling down the left-hand column and selecting Manuals. Specific information can be selected by clicking on the desired manual section. The Real Estate Manual is ever evolving, as procedures are subject to revision and change. Individuals or firms providing relocation services on federal or state funded projects must perform these services in compliance with the most current policies and procedures. Individuals utilizing a hard copy version of the manual, without accessing the website for updates, risk providing non-compliant services to our displacees. Therefore, all users must only use those manual sections contained on our website. ODOT will provide notice of manual changes on the Design Reference Resource Center (DRRC) web page. Users of the manual can access this page and subscribe to be made aware of manual changes via notification. Then, when changes to the manual occur, ODOT will provide direct notice to the subscriber. This page can be accessed at Scroll down to Real Estate Policies and Procedures Manual and select the desired section for updates, or enter your address to subscribe for changes. It is the user s responsibility to maintain their most current address on the DRRC notification system. The DRRC web site is updated four times annually. The Office of Real Estate may also provide additional guidance to its procedures by Inter-Office Communications (IOC s). These communications will be made a part of the Real Estate Manual and will be found in the Addenda of each section of the manual.

2 Table of Contents 6200 PLANNING AND ADVISORY SERVICES General Relocation Conceptual Study General Timing of the Conceptual Study Who should complete the Conceptual Study Gathering Information for the Conceptual Study Contents of the Conceptual Study Distributing the Conceptual Study Pre-Acquisition Survey General Timing of the Pre-Acquisition Survey Who should complete the Pre-Acquisition Survey? Distribution of the Pre-Acquisition Survey Report Gathering Information for the Pre-Acquisition Survey Report Specific Duties of the person collecting information for the Pre-Acquisition Survey Compiling the Pre-acquisition Survey Report Property Inventory Classification Form (RE-95) The RE-95 Process Realty vs. Personalty Real Property Personal Property Trade Fixtures The Tests for Realty vs. Personalty Advisory Services REV MAR i

3 6200 PLANNING AND ADVISORY SERVICES 6201 General Relocation planning is an essential part of any project that involves displacement. Thorough planning will identify potential problems and provide effective solutions to resolve those issues. Planning helps the Agency meet Right of Way clear dates while also providing the best Relocation Assistance to Displaced Persons, including those with special or unique needs. Planning should be performed in direct relation to the anticipated complexity and nature of the displacement activity. Section of the Ohio Revised Code states: (A)(1) Projects or programs that cause persons to be Displaced Persons shall be planned in a manner that recognizes, at an early stage in the planning of such programs or projects and before the commencement of any actions that will cause displacements, the problems associated with the displacement of individuals, families, businesses, and farm operations, and in a manner that provides for the resolution of such problems in order to minimize adverse impacts on Displaced Persons and to expedite program or project advancement and completion. There are two major elements involved in Relocation Planning. The first element is a Relocation Conceptual Study, which is compiled before the preferred alignment is chosen. The second is the Relocation Pre-Acquisition Survey, which is compiled after identification of specific relocation parcels Relocation Conceptual Study General The Conceptual Study is a formal written report that addressees the relocation scope and complexity of the project. The study must recognize anticipated relocation problems and identify possible solutions. An evaluation of project resources available to carry out timely and orderly relocations shall be included. The Conceptual Study is part of the Environmental Process, thus coordination between the District Real Estate Administrator and Environmental Services is necessary Timing of the Conceptual Study The study should be completed after potential alignments are identified and before the preferred alignment is selected. The study should separately address each potential alignment. On less complex projects there may only be one feasible alternative identified. REV MAR

4 Who should complete the Conceptual Study The study should be completed by an ODOT employee who is competent in the discipline of relocation. A person employed by an LPA or a consultant who is on ODOT s pre-approved list for relocation may also complete the report Gathering Information for the Conceptual Study Data for the study should be collected by visual inspection of the project using project maps and/or plans. Occupants of structures and potential Displaced Persons should not be interviewed or disrupted. Additional information should be gathered by using secondary resources such as interviews with elected officials, community leaders, real estate professionals, etc Contents of the Conceptual Study A complete Conceptual Study must address all of the items listed below: A. A general description of the project, including a discussion about each of the proposed alignments. A map of the proposed alignments should be included. B. An estimate of the number of households to be displaced, including the family characteristics (e.g. income levels, tenure, the elderly, large families, etc.) for each alignment. Examples of visual evidence which would help identify family characteristics would be handicapped ramps, swing sets or children s toys in yard, multiple utility meters and observing neighborhood activity. In addition, interviews with local officials may also provide information as to family characteristics. C. An estimate of the number of comparable replacement dwellings in the area (including price ranges and rental rates) that are expected to be available to fulfill the needs of the displaced households. When an adequate supply of comparable housing is not expected to be available, a description of actions proposed to remedy insufficient housing should be included. This may include the use of less than three comps and/or last resort housing provisions (see Section 6607). D. Estimate of the number of businesses, farms and non-profit organizations to be displaced. This information will include the size of business, type of business, and estimated number of employees for each displacement REV MAR 17

5 E. 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 that 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 along with possible solutions. F. Discussion regarding divisive or disruptive effects on the community, such as separation of residences from community facilities. Community facilities include, but are not limited to, churches, schools, hospitals, recreation facilities, parks and senior centers. G. Results of consultation with local officials, social agencies and/or community groups regarding the impacts on the affected community. H. An estimate of the amount of time needed to clear the project for construction. This time frame should be from acquisition authorization to when all displaced residences, businesses, farms and non-profits have been successfully moved from the project Distributing the Conceptual Study Upon District s completion of the study, a copy shall be submitted to the Office of Environmental Services, and a copy shall be retained in the district s master project file Pre-Acquisition Survey General A pre-acquisition survey is a requirement for all projects that will cause displacement. The purpose of the pre-acquisition survey is to gather information necessary for the relocation process and to identify those parcels that have specific challenges which may demand significant time in the relocation process. The information compiled from this survey is summarized in a formal report entitled the Relocation Assistance Pre-Acquisition Survey Report Timing of the Pre-Acquisition Survey The Pre-Acquisition Survey shall begin when final right of way plans are adequately complete so relocation parcels can be clearly identified. Because the report provides a vast amount of data that is useful to the appraisal process, the report should be completed, whenever possible, prior to beginning appraisal activity. The information useful for appraisal includes property owner names, contact information and the RE-95 s (Property Inventory Classification Forms) that delineate real vs. personal property and owner vs. tenant improvements. REV MAR

6 Who should complete the Pre-Acquisition Survey? Due to the vast amount of relocation information to be collected during this process, the Pre- Acquisition Survey should be completed by a person who is knowledgeable in the relocation process. This will generally be a district Relocation Agent. If this report is completed by an LPA or a consultant, the person who performs this function must be on ODOT s list of pre-approved relocation consultants or LPA s. For consistency purposes, it is recommended that the Relocation Agent who performs the pre-acquisition survey interview be the same agent who is assigned the relocation parcel Distribution of the Pre-Acquisition Survey Report Pre-Acquisition Survey Report information shall remain in the district s master project file with a copy forwarded to the Project s Relocation Reviewer(s). Pre-Acquisition survey information should be shared with District appraisal staff to aid in problem analysis and scoping Gathering Information for the Pre-Acquisition Survey Report Information for the Pre-Acquisition Survey is gathered by personally inspecting each property and interviewing the Displaced Persons. The pre-acquisition survey is generally the first face-to-face contact between the Agency and the Displaced Person, other than what may have occurred at public meetings. This first contact is important as it sets the stage for future communications and rapport between the Agency and the Displaced Person. All Pre-Acquisition Surveys must be conducted inperson at the displacement site, unless the District Real Estate Administrator waives this requirement in writing because the owners are out of state and cannot participate in-person. In addition, the local Real Estate market should be researched to ascertain the availability of replacement housing and business sites as necessary Specific Duties of the person collecting information for the Pre-Acquisition Survey The occupant(s) of each parcel shall be interviewed using the appropriate Site Occupant Interview form. On a residential parcel, the head(s) of household shall be interviewed. The owner of the business or representative with decision making authority shall be interviewed on nonresidential parcels. If the parcel is occupied by a tenant, the owner and the tenant should both be interviewed. There is a separate form for residential parcels and non-residential parcels. All site occupant(s) shall be treated with utmost respect and courtesy. Care should be taken to obtain required information without alienating the person(s) being interviewed. The applicable relocation brochure (see Section 6302) shall be given to each Displaced Person interviewed. The brochure shall be explained in detail. The Relocation Agent must ensure that the person being interviewed understands the contents of the brochure. The interviewer shall clearly write their name and phone number, or affix their business card to the inside back cover of every 62-4 REV MAR 17

7 brochure. The relocation brochure serves as the general information notice as required by 49 CFR , therefore the person interviewed must sign a receipt (Form RE-BRO) documenting that they have received the brochure. During the survey, any potential hardship or difficult relocation parcel(s), such as the indigent, the elderly, large families, unique homes, businesses, etc., should be identified. These parcels will likely need the most amount of time to complete; therefore the appraisal process should begin on these parcels first. Parcels that may require a carve-out should be identified during the Pre-Acquisition Survey. Since this requires carving out certain structures, improvements or land values, coordination with the appraiser is necessary. Parcels with multiple fee owners or life estates should be identified. In most every instance, subject to the Project Manager s discretion, the RE-95 will be completed for each parcel (see section 6204) during the Pre-Acquisition Survey. The interviewer must carefully explain relocation eligibility as it pertains to each individual interviewed. Specifically it should be explained that relocation eligibility does not begin until an offer is made to purchase the property and that if the person moves before an offer is made to purchase the property they may jeopardize all relocation benefits Compiling the Pre-acquisition Survey Report The Pre-Acquisition Survey Report is essentially a relocation plan that will assist the Project Manager in timely delivery of the project. The information contained within the report shall be organized and include the following: A. A brief description of the project with basic information such as number of residential owner parcels, tenant parcels, business parcels, farm parcels and nonprofit parcels. B. A list of potential relocation and hardship issues and plans to resolve these issues. This information can be useful to the Project Manager in scheduling appraisal and acquisition functions to maximize the time available for dealing with potentially time consuming relocation parcels. In addition, the Pre-Acquisition Survey should identify any ownership issues such as multiple fee owners or life estates. C. A list of parcels that will require a carve-out (see Section 6605) with an explanation of any items that should be excluded from the Typical Home Site Computation (THSC). REV MAR

8 D. A statement describing the availability of replacement housing for rent or purchase in the project area and any market trends that might have an impact on the Agency s ability to provide adequate Relocation Assistance. E. An estimate of the time required to clear the project. F. Any additional information that would aid in the identification and/or timely resolution of project delaying relocation issues. G. A copy of all completed Site Occupant Interview forms and RE-95 s Property Inventory Classification Form (RE-95) The RE-95 Process The RE-95 is an ODOT form that is used to help make project management decisions. This form is integral to the appraisal and relocation functions and also protects the Agency from possible duplication of payments. A. The RE-95 form identifies improvements in the take area and identifies the ownership of these improvements. Classification of improvements situated in take areas and ownership of these improvements assists Project Managers to: 1. Identify the rightful owners to ensure offers are made to the right person. 2. Ensure that FMVE is properly allocated. 3. Ensure that people eligible to receive relocation benefits are identified. 4. Determine what is personal property vs. real property. This avoids duplication of payments by ensuring that an item is not moved as a relocation benefit and also valued and paid for in the appraisal and acquisition process. 5. Provide agreement between owners, tenants and the Agency which helps to avoid problems during the negotiation process. B. This information is important because: 1. Improvements classified as real property are valued in the appraisal process and the Department then makes an offer to buy them in the acquisition process REV MAR 17

9 2. Improvements classified as personal property are not considered in the appraisal process, and are moved as part of the relocation process. C. When is the RE-95 done and who prepares the RE-95? 1. If the acquisition parcel includes relocation, the Relocation Agent is to complete the RE-95 during the pre-acquisition survey, or sooner when applicable. The Relocation Agent shall pay particular attention to those items of personal property that could be mistakenly classified as real property. It is imperative that these items be identified on the RE-95 form. This information must be passed along to the District Manager who oversees the appraisal process so they can ensure that the appraiser does not value the item or the acquisition agent does not offer to purchase an item that will be moved as part of the relocation process. 2. If the acquisition parcel does not include relocation, the RE-95 can be completed during development of the project work plan. However, it may not be possible to have the owner (or occupant) sign the RE-95 as prearrangements may not have been made with the owner. Therefore, the District may scope the appraiser to verify the information on the RE-95 and to secure signatures from the owner(s) when they accompany the appraiser during the inspection of the property. The District must ensure the appraiser is scoped to list all items of real property included in the compensation estimate. This itemization is useful in resolving conflicts should an owner demand that something be moved, when in fact it was a part of the compensation estimate. 3. In any event, it is the responsibility of the District Real Estate Administrator to ensure that an RE-95 is completed and that any real property in the take area is not moved as a relocation benefit. D. It is ODOT procedure that whenever there is a man-made structure in the take area, there must be a RE-95 for the parcel. Common examples to be included on the RE-95 are: Signs, Buildings, Sheds, Garages, Pole Barns, Barns, Hot Tubs, Pools (both above-ground and in-ground). 1. Generally, horticultural landscaping items are not included on the RE-95 as they are a part of the earth. These things include: Trees, Shrubs, Grasses and Ponds. 2. In addition, things which are obviously a part of the site that are owned by the fee owner and considered real property are not included on the RE95. These items include: Drives, Patios, Decks, Sidewalks, Septic Systems and/or Leach Fields. REV MAR

10 3. The RE-95 shall not list property inventory within a structure (e.g., chairs, furniture, clothing, etc.), although a blanket statement regarding the personal contents of a structure or site is acceptable (e.g., personal property contents of the residence, garage, etc. ). E. The following information is needed on the RE-95: 1. Original signatures from the ODOT agent, the fee owner and the tenant owner of any improvements within the acquisition area. 2. An inventory of all fee owned and/or tenant-owned real property improvements. 3. Classification by the ODOT agent as to whether an improvement in the take area is real property or personal property. 4. As the RE-95 is prepared in the presence of the owner, it is one of the few forms where it is acceptable to have hand written information. However, care must be taken so that the form is legible. Signatures that are not legible must also include the printed name of the person signing the form. F. When the owner or occupant of the property refuses to sign the RE-95: 1. The ODOT agent shall fill out the RE-95 form to the best of their ability, and if known, insert comments onto the second page of the form regarding the owner s reasons for refusing to sign. 2. The ODOT agent must sign the form and note the date they physically inspected the property. G. Updating the RE If the RE-95 needs to be updated, a new RE-95 is to be created with new signatures and dates. 2. If there is only a minor change, the change can be added to the original RE-95; however, all parties are then required to place their initials and the date next to the change. H. Additional References to the RE-95 Process 1. The RE-95 process is further described in ODOT s policies and procedures manual at Sections (O), (F)(6) and REV MAR 17

11 6205 Realty vs. Personalty The Relocation Assistance Program reimburses the actual, reasonable, and necessary costs to move personal property. The appraisal and the RE-95 must be checked to determine those items that will be moved vs. those that will be acquired with the property Real Property A. REAL PROPERTY - is generally defined as whatever is erected, growing upon or affixed to the land. B. FIXTURES are defined as: An article that was once personal property, but has since been installed in or attached to the land or building in a rather permanent manner so that it is regarded in law as part of the Real Estate (Black's Law Dictionary, Fourth Edition). 1. If an item is identified as a fixture, it is part of the real estate and should be appraised and paid for in the acquisition process Personal Property In a broad sense, personal property is everything that is subject to ownership and which is not real property. The term is generally applied to property of a personal or moveable nature. Generally, items remain personal property if they can be removed without serious injury to the real estate or the item itself. Personal property is not appraised by the Agency and it is not part of the acquisition process. The Relocation Assistance program reimburses the owner of personal property for the actual, necessary and reasonable costs to move the property Trade Fixtures Trade fixtures are equipment or personal property which a tenant installs for business purposes. A tenant is allowed to remove trade fixtures before a lease ends (unless a written document such as the lease expressly forbids it). A. Depending on the standard tests for realty vs. personalty, trade fixtures may be classified as real property or personal property. If they are classified as real property they are treated as tenant owned improvements and are purchased as real estate. If trade fixtures are classified as personal property the owner of the trade fixture will be reimbursed for the actual, reasonable, and necessary costs to move the item. REV MAR

12 B. It is very important, that all trade fixtures are identified as either real or personal property and individually listed on the RE-95 prior to the appraisal process The Tests for Realty vs. Personalty Following are the standard tests for classifying property as real vs. personal. All of these tests must be considered when deciding how to classify property. It is sometimes difficult to determine if an item is real vs. personal property. However, to avoid duplication of payments, it is critical that the appraiser and Relocation Agent are aware which items are to be included in the value reflected on the appraisal as real property and which items are to be moved as personal property. The following criteria will help guide the agent when completing the RE-95: A. The nature of the property. A house, by its nature, is real property. Trees and shrubs are real property. B. The manner of annexation. If an item is attached permanently to the real estate it becomes real property. If an item is attached in such a way that it can be removed with little effort it is most likely personal property. C. The purpose for which the annexation is made. Light fixtures are installed to light the real property and therefore become part of the real property. D. The intention of the annexing party to make the property part of the real estate. Judging the intention of a person can be subjective. If a homeowner installs a hot tub and then constructs a permanent wood deck around the hot tub, the owners intention was most likely to never to move the tub. Therefore, it becomes real estate. However a tenant may place a hot tub on a concrete porch and not hard wire or add permanent plumbing with the intent of moving the hot tub when the tenant s lease expires. In this situation the hot tub would be classified as personal property. E. The degree in difficulty and the extent of any loss involved in removing the property from the realty. If removing the item would leave substantial damage to the real property, such as removing a built in display case leaving a large hole in the wall, then the item should be classified as real property. If an item can be removed without damaging the real estate it would most likely be personal property. F. The damage to the severed property which removal would cause. If a wood deck is removed from a property, the deck would most likely be damaged to the extent that it cannot be "reinstalled" without extensive carpentry labor. Therefore, the deck would be classified as real property REV MAR 17

13 6206 Advisory Services Relocation advisory services are a key component to any successful relocation parcel and project. The ultimate goal of a relocation project is to clear the right of way in order for project construction to proceed on schedule. With good advisory services this goal is better achieved. Individuals, families, businesses and farms are being required to move according to the project s schedule. They are unfamiliar with the policies and procedures that govern Relocation Assistance. Without the Relocation Agent s support, guidance, advice and counsel the Displaced Person cannot be expected to navigate through these complex relocation procedures in order to become established in a suitable replacement location, and to receive all the benefits for which they are eligible under the Relocation Assistance Program. Advisory Services must include the following: A. A personal interview with each Displaced Person. The purpose of this interview is to determine the Displaced Person s relocation needs and preferences, to explain relocation payments and other assistance for which the Displaced Person may be eligible, and to explain eligibility requirements and procedures for obtaining assistance. B. Current information on the availability, listing prices and/or rental costs of comparable replacement dwellings. The Relocation Agent must explain that the Displaced Person cannot be required to move unless at least one comparable replacement dwelling is made available. Every effort should be made to offer referrals which meet the Displaced Person s desires. If a Displaced Person does not wish to receive referrals, the parcel file should be documented as such. C. A thorough explanation of how the replacement housing offer and price differential is computed. The Displaced Person must be informed in writing of the specific comparable property and the price or rent used in establishing the maximum replacement housing price offer. It must also be explained to the Displaced Person how they would qualify for the replacement housing differential, and that all replacement housing shall be inspected prior to rent or purchase to ensure that it meets applicable DS&S standards. D. An offer of transportation to the Displacees to inspect referral housing. E. Information that whenever possible, minority persons shall be given reasonable opportunities to relocate to decent, safe, and sanitary replacement dwellings, not located in an area of minority concentration, that are within their financial means. This policy, however, does not require an Agency to provide a person a larger payment than is necessary to enable a person to relocate to a comparable replacement dwelling. REV MAR

14 F. Current and continuing information on the availability, listing prices and/or rental costs of suitable commercial and farm properties. Every effort should be made to offer referrals which meet the Displaced Business s desires. If a Displaced Business does not wish to receive referrals, the parcel file should be documented as such. G. Assistance to those displaced from businesses or farm operations in obtaining and becoming established in a replacement location. This may include contacting local government officials to help with zoning requirements or occupancy permits. H. Information to Displaced Persons in an attempt to minimize hardships in adjusting to relocation by providing counseling and information about the following: 1. Federal and State housing programs and/or disaster loans; and, 2. Other programs administered by the Small Business Administration; and, 3. Other Federal, State, or Local programs offering assistance and technical help. I. Guidance to any Displaced Person that may be eligible for government housing assistance at the replacement dwelling of any requirements of such government housing assistance program that would limit the size of the replacement dwelling, as well as of the long term nature of such rent subsidy vs. the limited (42 month) duration of the relocation rental assistance payment. J. Information to all Displaced Persons that payments received under the Relocation Assistance Program, with the exception of Loss of Goodwill Payments, are not considered income for the purposes of Federal or State Income Tax, or for determining a person s eligibility for assistance under the Social Security Act. K. Assistance to all Displaced Persons in completing and filing claims for payment. The agent must clearly inform all Displaced Persons in advance of the documentation that is needed to process a claim. L. Advisory services proportionate to a Displaced Person's needs. The agent must, when applicable, provide guidance and assistance in the appeal process REV MAR 17