Acquiring Real Estate
Third Party Procurement
Frequently Asked Questions
Q = Question; A = Answer
Q. We are in the process of planning a subway improvement project that will be financed by a grant from the FTA. This project involves acquiring private real estate. Are we required to have completed the acquisition of the RE before we can procure and or award a contract for this subway improvement if we are receiving FTA funds.
A. There is no statutory or regulatory requirement that you complete the acquisition of real estate prior to contracting for the construction. However, it would be prudent to attempt to minimize compensable delays to the construction contractor, caused by real estate acquisition problems, for which you would be responsible. (Reviewed: September 2010)
Q. Please direct me to the circular or regulation detailing the process for a subrecipient to procure an existing structure for use as a transit facility.
A. Real property must be acquired, managed, and used in accordance with the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, 42 U.S.C. §§ 4601-4655 and 49 C.F.R. part 24, the implementing regulation. Real property is defined in 49 C.F.R. § 18.3 as "land, including land improvements, structures and appurtenances thereto, excluding movable machinery and equipment." The acquisition of easements and rights of way are also considered real estate acquisitions.
Real property acquisition, use and disposal is covered by FTA Circular 5010.1D, Chapter IV; 49 C.F.R. part 18.31; 49 C.F.R. part 24, subpart B; and by the FTA Master Agreement, Section 19.1. It is important that the grantee be familiar with the requirements established by FTA in Circular 5010.1D, Chapter IV. This circular establishes procedures to be followed by grantees in the following areas:
- The conduct of Hazardous Waste Site Assessments before acquiring real property.
- The conduct of an independent appraisal by a certified appraiser.
- The requirement for a review appraisal of the initial appraisal.
- FTA review and concurrence requirements related to the grantee's offer to buy the property.
- Disposition of excess real property by sale, transfer to other programs, etc.
- The requirement to prepare an excess property utilization plan for all real property no longer used for its original purpose. (Revised: September 2010)
Q. Can you provide a reference regarding the use of land as an in-kind local match for federal funds? Specifically, where is it stated that a grantee must use federal procedures to purchase land with local funds if it intends to use the land value as an in-kind match for the future?
A. The Common Grant Rule at 49 C.F.R. § 18.24 "Matching or Cost Sharing" authorizes grantees to use land as an in-kind local match for Federal funds. FTA's administration of this authority is in FTA Circular 5010.1D, "Grant Management Requirements," Chapter IV.
The Uniform Relocation Assistance and Real Property Acquisition Policies Act, at 42 U.S.C. § 4627, establishes the requirement that a grantee must use federal procedures to purchase land with local funds if it intends to use the land value as an in-kind match. The DOTís implementing regulations are found in 49 C.F.R. part 24. (Revised: September 2010)
Q. By Federal law, is the Transit Agency required to get two appraisals regarding real estate acquisition?
A. Federal law and regulations do not require two appraisals. FTA requires one appraisal and an independent review of that appraisal.
Q. By Federal Law, does the Transit Agency have to show the Property Owner both appraisals?
A. There is no Federal requirement to make an Agency's appraisal available to a property owner. This is controlled by State law or Agency preference.
Q. By Federal Law, does the Transit Agency have to offer the higher of the two bids?
A. The term "bids" is not clear. If you mean "appraisals,Ē there is no such requirement.
Q. Is it against Federal Law for a Transit Agency to pay one Property Owner substantially more for similar property than to a property owner literally across street? If so, I'd like to read the regulations.
A. The offer made to a property owner may not be less than the approved appraisal. There can be differences in valuation based on that approved appraisal. See §24.102. (Posted: December, 2011)
Q. We need additional rights from a property owner where there is already a voluntary P&U in place for offer. Do we need to: 1. rescind 1st offer and remake entirely new offer? 2. send revised offer letter for additional rights only? Key question in my mind - is the voluntary P&U in place for first offer impacted by asking for additional rights?
A. Concerning whether a new purchase (price) offer needs to be submitted to the property owner when you need "additional rights" after an initial offer has already been made:
The applicable Federal rules that might address your situation are found in the regulations issued under the federal Uniform Assistance and Real Property Relocation Act, 49 CFR Part 24. Under the Uniform Act, you must offer "just compensation" (i.e., fair market value supported by an appraisal and review appraisal) to the property owner. Also, pursuant to 49 CFR Section 24.102(h), if there is any "material" change in either the character or condition of the property, a new appraisal must be conducted and a new offer of "just compensation" must be made.
In your case, if the "additional rights" are a material change to the property or property rights sought to be acquired, a new appraisal (and review appraisal) must be conducted and a new offer made to the property owner. (Posted: January, 2012)
Q. My question has to do with locating bus shelters on City r-o-w and private property or just private property. Our Legal Division recommended entering into a private agreement versus requesting an easement to locate the bus shelter on property not owned by the City of Galesburg. A bus shelter will only be located on private property if the owner enters into an agreement with the City donating the use of the land for a bus shelter and concrete area. The grant will pay for the construction of the bus shelter and concrete area. Are you aware of any Federal regulations regarding locating a bus shelter on private property that need to be followed i.e. does the Uniform Relocation Act pertain to donated use of property or is there any other type of federal regulation that needs to be followed?
A. You should contact your regional FTA office for assistance with this question. (Posted: August, 2013)