Property Acquisition: Five Signs of Trouble Ahead

by Best Best & Krieger LLP

As much as public agencies want infrastructure projects to go smoothly, they rarely do. Even when a project is seemingly rolling along through right of way acquisition, there are still hurdles that inevitably impact budgets and project delivery schedules. Below are a few tell-tale signs that your project’s right of way acquisition is headed for some unexpected bumps on the road.

1. Unclear Rights

Problems arise for public agencies when the scope of the easement they seek to acquire is unclear. Vague language impacts the remainder property and can lead to larger severance damages because appraisers and courts look at the most injurious use possible based on the easement language. For instance, if an agency seeks a subsurface easement that is carelessly worded, the property owner may not have any use of the surface in the after condition. For the benefit of the project, it is best to carefully review the rights being acquired on a parcel-by-parcel basis to reduce unnecessary severance damages.

2. Temporary Construction Easements

Multi-year projects often involve temporary construction easements that last only a portion of the project’s construction timeframe. TCEs need clear trigger mechanisms for the commencement and conclusion of the TCE period that can be easily checked and communicated between contractors and property owners. Without these trigger mechanisms, public agencies run the risk of creating confusion between right of way and construction teams and increasing the risk of inverse condemnation actions.

3. Misunderstood Mitigation Costs

Partial acquisitions of property often come with the need to “mitigate” the damage to the remainder property. For instance, if the project removes an on-site advertising sign, it may be appropriate for the condemning agency to pay for a new pole sign. It is imperative to get a solid, well-founded estimate for the cost of a new sign during the appraisal process. Too often, the agency assumes signs can be relocated with minimal costs. In reality, new design standards require signs be re-built to meet stricter standards at a much higher cost. The failure to get proper estimates for mitigation work can lead to large, unexpected cost increases.

4. Inflexible Project Engineers

Once in a while, an appraiser, attorney or property owner will recognize that a minor design change will lessen the impact on a property owner, potentially saving big dollars down the line. It is important that reasonable suggestions be evaluated by project engineers and not rejected outright. Ensuring that reasonable design changes are evaluated engenders goodwill with property owners and businesses impacted by the project and can lessen the amount of severance damages later.

5. Displacees Aren’t Relocating

When a project causes a resident or business to relocate, that person is entitled to relocation assistance. Ensuring that the displaced person finds a new site is key to success. When businesses have trouble relocating, the project suffers in two ways: 1.) it can increase the chance that the business will suffer a loss of business goodwill, which may be compensable and 2.) it increases the chance that the project will be delayed. To avoid this pitfall, work with your relocation agents to ensure smooth relocations.

This list doesn’t capture every problem. There are numerous ways that projects can go sideways. Recognizing and remedying these five issues will help your project get from start to finish.

Originally published on on Feb. 21, 2017. Republished with permission.

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