Fundamentals of Eminent Domain
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This document provides an outline for a course on eminent domain and condemnation law. It covers topics such as the eminent domain process, calculating just compensation, trial practice and strategy, and legal resources. Key points include the constitutional and legislative authority for eminent domain, the requirement that takings be for public use and with just compensation, methods for determining property value, and defenses to the government's right to take property.
![Abandonment of Action
30
• Provided no declaration of taking has been filed, the action may be
unilaterally abandoned by the condemnor
• at any time before, or within 30 days after, the filing of the award of
commissioners;
• or in the event of an appeal from the award, at any time before, or
within 30 days after, the entry of judgment;
• or in the event that a hearing before commissioners is waived, at any
time before, or within 30 days after, judgment has been entered in the
action. [N.J.S.A. 20:3-35]
• Otherwise, condemnee must consent to abandonment
• Entitlement to fees costs and expenses. N.J.S.A.20:3-26(b)
• West Orange v. 769 Associates, LLC, 397 N.J. Super. 244 (App. Div. 2007)](https://image.slidesharecdn.com/halfmooneducation-landlawsseminar2018fundamentalsofeminentdomain-190418151037/85/Fundamentals-of-Eminent-Domain-30-320.jpg)
![Condemnor’s Perspective
54
Obligations of the Condemning Authority
"…the power to take property through eminent domain is one of the most
intrusive aspects of sovereignty“ [State, by Comm'r of Transp. v. D'Onofrio,
235 N.J. Super. 349 (Law Div. 1989)].
"…in the condemnation field, government has an overriding obligation to deal
forthrightly and fairly with property owners…. (i)t may not conduct itself to
achieve or preserve any kind of bargaining or litigational advantage over the
property owner…. Its primary obligation is to comport itself with
compunction and integrity, and in doing so government may have to forgo the
freedom of action that private citizens may employ in dealing with one
another. [F.M.C. Stores, Co. v. Morris Plains, 100 N.J. 418 (1985)].](https://image.slidesharecdn.com/halfmooneducation-landlawsseminar2018fundamentalsofeminentdomain-190418151037/85/Fundamentals-of-Eminent-Domain-54-320.jpg)
Fundamentals of Eminent Domain
- 1. February, 2018 Eminent Domain and Condemnation Law Anthony F. DellaPelle, Esq., CRE Shareholder, McKirdy, Riskin, Olson & DellaPelle, P.C. Morristown, New Jersey
- 2. Course Outline 2 • The Eminent Domain Process • Condemnor vs. Condemnee Perspectives • Challenging the Right to Condemn • Calculating Just Compensation • Trial Practice and Strategy • Environmental Issues • Relocation Assistance
- 3. The Eminent Domain Process 3 • Constitutional and Legislative Grant of Authority • Enabling Legislation – Municipal, County, Special Agency, State and Federal Governments • Public Use Requirement • Requirement for Just Compensation
- 4. • Constitutional and Legislative Grant of Authority • Western Union Tel. Co. v. Penn. R.R. Co., 195 U.S. 540 (1904) • Enabling Legislation – Municipal, County, Special Agency, State and Federal Governments • Cincinnati v. Louisville & N.R. Co., 223 U.S. 390 (1912) • Public Use Requirement • Kohl v. United States, 91 U.S. 367 (1875) • Requirement for Just Compensation • Bauman v. Ross, 167 U.S. 548 (1897) 4 The Power of Eminent Domain
- 5. • The power of eminent domain is not automatic – it must be granted through legislative action • Boom Co. v. Patterson, 98 U.S. 403 (1878) • The legislature may delegate the power to other agencies • Luxton v. North River Bridge Co., 153 U.S. 525 (1894) • Acts concerning the power of eminent domain are generally strictly construed (C.J.S., Eminent Domain, Sec. 2) • Delaware, L & W.R. Co. v. Morristown, 276 U.S. 182 (1928) • The power may only be exercised for the purposes, in the manner and subject to the conditions prescribed by the legislature • Berman v. Parker, 348 U.S. 26 (1954) • Executive Orders cannot authorize eminent domain • Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579 (1952) The Right to Condemn 5
- 6. • What are the legislative actions that can authorize eminent domain? • Statutes • Local agency ordinances • Resolutions? • Federal/State/County/Local/other • Specific government agencies usually have specific eminent domain powers • How the power is exercised may ordinarily be subject to an omnibus procedural eminent statute (e.g., Eminent Domain Act) The Right to Condemn 6
- 7. • Public utilities can exercise eminent domain • Statutory Grant • Natural Gas Act (15 U.S.C. 717F(h) • State statutes • Requires Administrative/Regulatory approval • Limited Authority • Limited to designated area and properties • Subject to restrictions imposed by authorization • Must compensation precede taking/preliminary entry authorized? • Jurisdictional issues for regional, interstate, international projects The Right to Condemn 7
- 8. Just Compensation 8 • "...nor shall private property be taken for public use without just compensation." • U.S. Const. Amend. V • "Private property shall not be taken for public use without just compensation. Individuals or private corporations shall not be authorized to take property for public use without just compensation first made to the owners." • N.J.S.A. Const. Art. 1, Sec. 20
- 9. Just Compensation 9 • Compensation for the property taken • Reduction in value (damages) to any remaining property • Interest • Indemnity for loss • Attorneys’ fees and costs not generally recoverable by condemnee
- 10. Legal Resources 10 • Eminent Domain Act - N.J.S.A.20:3-1 et seq. • Rule 4:73 (Condemnation) • Relocation Assistance Act - N.J.S.A. 20:4-1 et seq., N.J.S.A. 27:7-72, et seq. and regulations - N.J.A.C. 5:11- 1; N.J.A.C. 16:6-1.1 et seq. • Local Redevelopment and Housing Law – N.J.S.A. 40A:12A:-1, et seq.
- 11. Legal Resources (cont’d) 11 21 New Jersey Practice, Skills and Methods, Eminent Domain
- 13. Legal Resources (cont’d) 13 • The Appraisal of Real Estate, 14th Ed. Appraisal Institute • Eaton, Real Estate Valuation in Litigation, 2d Ed., Appraisal Institute • New Jersey Condemnation Law Blog: www.njcondemnationlaw.com
- 14. Eminent Domain Act of 1971 14 • N.J.S.A. 20:3-1 et seq. • Uniform procedure applicable to all proceedings in which the power to condemn is being exercised, except acquisitions by PANYNJ which proceed pursuant to N.J.S.A. 32:1-77, et seq. • Applies to “inverse” actions
- 15. Four-Step Process 15 • Attempt at amicable resolution through bona fide negotiations • Final judgment on authority for and due exercise of power by condemnor • Commissioners’ Hearing • Jury Trial on appeal from Commissioners’ Report on the issue of just compensation
- 16. What Constitutes “Property” 16 • Real vs. Personal Property • As to real estate, “functional unit” test for “fixture” issues • Interplay between functional unit and moving expenses as relocation benefit * N.J.S.A. 20:3-2(d) * State v. Gallant, 42 N.J. 583 (1964)
- 17. Single Issue -Value - Controversy 17 • Fact finder is concerned with just compensation only - Court adjudicates all other issues (e.g., title, proceeds allocation) • One award representing the value of all interests in the property (“unit rule”) • Award must take into account all damages, both present and prospective - no further proceedings or relief
- 18. Date of Value 18 Pursuant to N.J.S.A. 20:3-30, the earliest of the following events: Date possession is taken by the condemnor Complaint date Date on which condemnor substantially affects use and enjoyment of property Declaration of “blight” or “in need of redevelopment” determination, but see N.J.S.A. 20:3-38 * See Kirby Forest Industries v. U.S., 467 U.S. 1 (1984)
- 19. Prelitigation Matters 19 • Prelitigation Entry and Inspection/Evaluation • N.J.S.A. 20:3-16 • Title Searches • Parcel Surveys • Appraisal • Environmental Inspections • Right of Entry
- 20. Bona Fide Negotiations 20 • Notice of appraisal inspection • Written offer by certified mail • Offer not less than approved appraisal • Description of property to be acquired • Disclosure of all appraisals obtained • Minimum 14 days for reply to offer • Must address issues raised by owner
- 21. Litigation - Phase 1 21 • Complaint • Order to Show Cause • Declaration of Taking • Order Permitting Deposit • Notices • Answer • Judgment Appointing Commissioners
- 22. Complaint 22 Must include: • a statement showing the amount of compensation offered by the condemnor; • a reasonable disclosure of the manner in which the amount has been calculated. “Reasonable disclosure” by the condemnor includes furnishing the condemnee with: • the map • a description of land to be acquired • the identity of the improvements to be acquired, if any • a statement of the full fair market value • a description of the appraisal valuation method or methods relied upon (cont’d)
- 23. Complaint (cont’d) 23 • a breakdown of the appraised value allocated to the land to be acquired, and improvements to be acquired, if any; Data concerning comparable sales or leases relied upon in determining the amount of compensation offered which shall include: • names of seller and purchaser or landlord and tenant, • the location of the property by block, lot, street, street number, and municipality, • date of sale or date and duration of lease • the consideration for the sale or amount of rent • the book and page number of the recording of the deed of the comparable sale • any unusual factors concerning the property known to the condemnor which may affect value.
- 24. Parties 24 • Join all parties with an interest in the property, e.g.: • Tenants, holders of easements, occupants • Mortgagees and other lienholders • Municipality (for taxes) • Only those parties who are joined have their interest foreclosed by the proceedings. • Easements are to be condemned separately as a “DE” parcel together with the property which it serves; the area of the easement should be designated on the serviant parcel as “SE” and the appraisal should adjust accordingly.
- 25. Order to Show Cause 25 • Action is brought in a summary manner pursuant to R.4:67. • May be presented to the court ex parte. • No summons, but language is consistent • Served within the state at least 10 days before the return date
- 26. Declaration of Taking 26 • Basically, a “deed” from the condemnor to itself • Fixes the property and rights acquired based on legal description • Recorded in County Clerk/Register’s office
- 27. Order for Deposit 27 • Provides for deposit of estimated compensation (usually the amount of the offer per the appraisal) • May be obtained ex parte
- 28. Deposits into Court 28 • The amount of the initial deposit may not be less than the amount of the prelitigation offer N.J.S.A.20:3-18 which itself may not be less than the amount of the condemnor's approved appraisal. • Deposits into Superior Court are by administered by the Clerk of Superior Court, Trust Fund Unit, which holds the funds in an interest-bearing account.
- 29. Withdrawals from Court 29 • By motion and petition • Request for dismissal of other defendants • Processing withdrawal from Trust Funds Unit • Condemnor’s ability to preserve portion of deposit for site remediation • Consideration of possession issues
- 30. Abandonment of Action 30 • Provided no declaration of taking has been filed, the action may be unilaterally abandoned by the condemnor • at any time before, or within 30 days after, the filing of the award of commissioners; • or in the event of an appeal from the award, at any time before, or within 30 days after, the entry of judgment; • or in the event that a hearing before commissioners is waived, at any time before, or within 30 days after, judgment has been entered in the action. [N.J.S.A. 20:3-35] • Otherwise, condemnee must consent to abandonment • Entitlement to fees costs and expenses. N.J.S.A.20:3-26(b) • West Orange v. 769 Associates, LLC, 397 N.J. Super. 244 (App. Div. 2007)
- 31. Answer 31 • Must raise all defenses to the right to take and manner of exercise of the power of eminent domain. • Failure to deny the authority of the condemnor to condemn in the manner provided for by the rules constitutes a waiver of the defense. • All issues other than those related to value and damages must be determined by the court prior to the appointment of commissioners.
- 32. Answer (cont’d) 32 • Must demand a jury trial if one is desired? • Must be served and filed in accordance with the Rules or pursuant to Order to Show Cause • Non-contesting appearance may be filed in lieu of answer; valuation issues preserved. N.J.S.A. 20:3-12(c).
- 33. Denial of Right to Condemn 33 • When the authority to condemn is denied, all further steps in the action are stayed until the issue of the right to take has been finally determined. • Does “finally determined" mean exhaustion of the appellate process if appellate review is sought? • N.J.S.A. 20:3-11 • Bridgewater Tp. v. Yarnell, 64 N.J. 211 (1974) • County of Sussex v. Merrill Lynch, 351 N.J. Super 1 (App. Div. 2002) • There is no discovery on the issue of the right to condemn except by leave of court. N.J.S.A. 20:3-12(d).
- 34. Some Defenses to Taking 34 • No public purpose – bad faith, pretext • Lack of necessity • Failure to pass requisite authorizations • Indefinite description • Failure to engage in bona fide negotiations. N.J.S.A. 20:3-6
- 35. Return Date of Order to Show Cause - The Right to Take • Condemnor’s Procedural and Substantive Compliance with Eminent Domain Act • Hearing may be required * R. 4:67-5; R. 4:73-1 * Bergen County v. Hackensack, 39 N.J. 377 (1963) 35
- 36. Judgment Appointing Commissioners 36 • Final Judgment as to Right to Take and Due Exercise of Power • Appoints 3 Commissioners • Jurisdiction now with Commissioners • Appealable as of right • Stay of further proceedings upon appeal?
- 37. Litigation - Valuation Proceedings 37 • Valuation (Appraisal) • Commissioner’s Hearing Procedure • Jury or Bench Trial – de novo
- 38. Elements of Fair Market Value 38 • Willing buyer & seller • Neither being under a compulsion to act • Being fully informed of all facts and circumstances about the acquired property (even if not known on date of value) • Owner is not limited to value for the use to which property is currently being put - owner entitled to value for highest and best use. State v. Caoili, 135 N.J. 252 (1994)
- 39. Applying the Approaches to Value • Highest and Best Use must first be determined • The appraiser begins to derive an opinion of property value using one or more of the three approaches to value. • The approaches employed depend on the type of property, the use of the appraisal and the quality and quantity of the data available for analysis.
- 40. 40 The Three Approaches to Value • Sales Comparison or Market Data Approach • Cost Approach • Income Approach
- 41. 41 Sales Comparison Approach • Sales approach is “king” • Based on sales of similar or “comparable” properties • Units of comparison • Sale price per acre/SF • Sale price per “unit” – lot, buildable SF (FAR) • Sales distinguished from: • Offers or Listings • Options • Contracts
- 42. 42 Cost Approach • Value of a property is derived by adding the estimated value of the land to the current cost of constructing a reproduction or replacement for the improvements, and then subtracting the amount of depreciation in the structures from all causes. • Entrepreneurial profit and/or incentive may be included in the value indication. • Land value is derived through a comparable sales/market approach • Source(s) of current cost -- cost estimators, cost manuals, builders and contractors. • Not “replacement value” • Depreciation - physical deterioration, functional obsolescence and external obsolescence • measured through market research and the application of specific procedures. • Cost approach is particularly useful in valuing new or nearly new improvements and “special purpose” properties that are not frequently exchanged in the market.
- 43. 43 Income Capitalization Approach • Based on conversion of income and capitalization into property value • Often summarized as “the present value of future benefits“ • Example: • An asset produces $5,000 of net income per year • What is the value of that asset? • If the rate of return is known to be 5%, then the value is $100,000 • S5,000 income/ 5% = $100,000 • If the rate of return is known to be 10%, then the value is $50,000 • $5,000 income/10% = $50,000
- 44. 44 Reconciliation of Value Indications • If two or more approaches to value are used, the value indications must be reconciled • Are they averaged or weighted? • Do they indicate that more research is required? • What if the indications are disparate? • Will this test the reliability of each approach? • Quality and quantity of data used • Is a “range” an acceptable conclusion?
- 45. “Wide Factual Inquiry” 45 of “all material facts and circumstances – both past and prospective – that would influence a buyer or seller interested in consummating a sale of the property” State of New Jersey by Commissioner of Transportation v. Silver, 92 N.J. 507 (1983) Village of South Orange v. Alden Corporation, 71 N.J. 363 (1976)
- 46. Entire Taking 46 Just compensation determined by “fair market value” of the property as of the date of value
- 47. Partial Taking – Two Methods of Valuation 47 • Before and After method value of entire parcel before taking – value of remainder after taking = just compensation • Per Se method value of land taken + diminution in value (or damages) to remainder = just compensation
- 48. Partial Taking – The Landscape Has Changed 48 Harvey Cedars v. Karan – 214 N.J. 384 (July, 2013): general-benefits doctrine is “at odds with contemporary principles of just-compensation jurisprudence” Jury only permitted to hear “one side” of the story Could result in a “windfall” to the property owners at public expense Just compensation in partial taking must be based upon a consideration of “all relevant, reasonably calculable, and non-conjectural factors that either decrease or increase the value of the remaining property” Court recognizes that the loss of view is compensable, but requires rehearing permitting evidence regarding the impact of the storm protection benefits upon the value of the property as an offset to damages
- 49. Mitigation – Cost to Cure 49 3 Basic Rules: Evidence of cost of restoring remaining property can be no greater than decrease in marked value if left uncured Cannot be speculative (reasonable and certain – previously written existing boundaries of tract) Duty to mitigate by condemnee State of New Jersey v. Sun Oil, 160 N.J.Super. 513 (Law Div. 1978) State of New Jersey by Commissioner of Transportation v. Weiswasser, 149 N.J. 320 (1997)
- 50. • In order to obtain severance damages (from taking a non-contiguous parcel) landowner must show that remaining parcel and parcel taken were parts of a single economic use and under the same ownership. Housing Authority, City of Newark v. Norfolk Realty Co., 71 N.J. 314 (1976) 50 Unity of Use: Taking of Non-Contiguous Parcel
- 51. Commissioners’ Hearing 51 • Non-binding arbitration • Provide reports 15 days in advance • Obtain Award, File Appeal • No appearance = no right to appeal * Borough of Keyport v. Maropakis, 332 N.J. Super. 210 (App. Div. 2000)
- 52. Appeal from Award of Commissioners 52 • File within 20 days of service of award • May be relaxed up to 30 days for good cause • Non-relaxable thereafter • Party may not rely on appeal filed by adversary - Adversary may withdraw * City of Long Branch v. Spanos, A-2936-04T1, 2006 W.L. 1627977 (App. Div. 2006)
- 53. Litigation - Trial “De Novo” 53 • Condemnor proceeds first • No burden of proof • Condemnation trial is an "evidential construction of a hypothetical sale” • Wide discretion in admission and rejection of evidence • Jury view of condemned property. R.4:73-7 • Environmental considerations – valuation as if “remediated”
- 54. Condemnor’s Perspective 54 Obligations of the Condemning Authority "…the power to take property through eminent domain is one of the most intrusive aspects of sovereignty“ [State, by Comm'r of Transp. v. D'Onofrio, 235 N.J. Super. 349 (Law Div. 1989)]. "…in the condemnation field, government has an overriding obligation to deal forthrightly and fairly with property owners…. (i)t may not conduct itself to achieve or preserve any kind of bargaining or litigational advantage over the property owner…. Its primary obligation is to comport itself with compunction and integrity, and in doing so government may have to forgo the freedom of action that private citizens may employ in dealing with one another. [F.M.C. Stores, Co. v. Morris Plains, 100 N.J. 418 (1985)].
- 55. Condemnor’s Perspective (Cont’d) Damnum Absque Injuria Loss of business; franchise, future or current profits, tenants or good will generally non-compensable State v, Comm'r of Transp. v. Hess Realty Corp., 226 N.J. Super. 259 (App. Div. 1988), certif. den. 113 N.J. 229 (1989), cert. den. 493 U.S. 964 (1989) but see State, by Comm'r of Transp. v. Arifee, 2009 N.J. Super. Unpub. LEXIS 2333 55
- 56. Condemnor’s Perspective (cont’d) 56 Damnum Absque Injuria Damages resulting from condemnor's use of land acquired from others (power lines on adjoining property) P.S.E. & G. Co. v. Oldwick Farms, Inc. 125 N.J. Super. 31 (App. Div. 1973), certif. den. 64 N.J. 113 (1973) Loss of visibility resulting from condemnor's use of land acquired from others State, by Comm'r of Transp. v. Weiswasser, 149 N.J. 320 (1997)
- 57. Condemnor’s Perspective (Cont’d) Damnum Absque Injuria (cont’d) Damages attributable to general circuity of travel, changed traffic patterns or erection of barrier • State v. Monmouth Hills, Inc. 140 N.J. Super. 449 (App. Div. 1970), certif. den. 57 N.J. 133 (1970) • State, by Comm'r of Transp. v. Charles Investment Corp., 143 N.J. Super. 541 (Law Div. 1976), aff'd 157 N.J. Super. 14 (App. Div. 1977), aff'd o.b. 76 N.J. 86 (1978) 57
- 58. Condemnor’s Perspective (cont’d) 58 Damnum Absque Injuria (cont’d) Noise and vibration impacts absent proof that there is measurable increase in noise level and/or vibrations caused by taking and proof that such impacts are reflected in the marketplace. State, by Comm'r of Transp. v. Carroll, 123 N.J. 308 (1991)
- 59. • Condemnor may insert in Complaint full reservation of rights with respect to contamination, solid waste, known or unknown; • Future cost recovery actions by a condemnor or related party Will NOT be barred by and doctrines of preclusion; e.g. Res Judicata, Collateral Estoppel, or Entire Controversy Doctrine. • Eminent Domain Act does not mandate a condemnor to conduct a full environmental assessment, but only requires to disclose what is known at the time. • New Jersey Transit Corporation v. Cat in The Hat, L.L.C., 177 N.J. 29 (2003). 59 ENVIRONMENTAL RESERVATION/COST RECOVERY
- 60. Environmental Costs cannot be Deducted from Fair Market Value; Property is to be valued as if “Remediated”. Estimated Cost of Remediation May be Withheld by the Court and Remain on Deposit Pending Filing of a Separate Cost Recovery since it is a “Transactional Cost’. Trial Court Hearing may be Held to Determine Appropriate Amount to Withhold on Deposit. In Appraising Properties as Remediated, Stigma by reason of the Remediated State of the Property can be Considered; recommended to have market support thereof. Housing Authority of the City of New Brunswick v. Suydam, 177 N.J. 2 (2003). 60 ENVIRONMENTAL/REMEDIATION & VALUATION
- 61. Effect upon Highest and Best Use: ◦ In order to develop property to H & B Use, further remediation may have to be conducted; this may in turn present additional extraordinary costs over and above those which may be incurred compared to a property not needing additional or no further remediation. ◦ Cost of further Remediation may not be cost effective and thereby limit H & B Use of property. ◦ Stigma may have impact upon marketability of property or otherwise impact H & B Use of Property. 61 EFFECT OF REMEDIATION ON VALUATION OF A PROPERTY
- 62. • Uniformity • Equality • Provide benefits variety of events, including non-condemnation events • All qualified occupants are entitled to relocation assistance, including tenants, owners, relatives, family members and other qualified occupants. • Require relocation plan (WRAP) prior to acquisitions and relocations. Relocation Assistance
- 63. 63 N.J.S.A. 20:4-1 (Relocation Assistance Act) ◦ The regulations promulgated pursuant to N.J.S.A. 20:4-1, et seq., are found at N.J.A.C. 5:11-1.1, et seq. N.J.S.A. 52:31B-1, et seq. (Relocation Assistance Law of 1967) ◦ The regulations promulgated under N.J.S.A. 27:7-72, et seq., are found at N.J.A.C. 16:6-1.1, et seq. N.J.S.A. 27:7-72, et seq. (Uniform Transportation Replacement Housing & Relocation Act). 42 U.S.C.A. §4601, et seq. (Uniform Relocation Assistance and Real Property Acquisition Polices Act of 1970).
- 64. 64 Relocation Assistance Condemnors must assist the relocatee in finding a new location or dwelling before any attempt at displacement or eviction of the displaced person may occur. N.J.S.A. 20:4-7; N.J.S.A. 27:7-78; N.J.A.C. 16:6-1.3(a); N.J.A.C. 5:11-2.1 and 2.2. Workable Relocation Assistance Plan (“WRAP”) Determine the needs of displacees; Assist displacees in obtaining replacement housing and business locations; Secure the coordination of relocation activities with other displacing agencies; Assist in minimizing hardships to displacees; Determine the extent of the need of each displacee for relocation assistance; Assure the availability of decent, safe, and sanitary housing; Determine the source, amount and availability of funds necessary to complete relocation; and Provide any other information deemed necessary to insure the regulatory provisions are carried out.
- 65. 65 Residential Relocation Payments N.J.A.C. 5:11-3.2: Either the actual reasonable moving expenses incurred or a fixed payment based on the number of rooms in the unit, not to exceed $300.00, and a $200.00 dislocation allowance. Moving expenses for a distance of 50 miles or less. For good cause, a move of more than 50 miles may be deemed reasonable by the displacing agency. See also, N.JS.A. 20-4-4. N.J.A.C. 16:6-2.1: Any displaced owner/occupant or tenant of a dwelling who qualifies is entitled to payment of his or her actual moving and related expenses, as the agency determines to be reasonable and necessary, including expenses for: ◦ Packing, crating, unpacking and uncrating of the personal property; ◦ Disconnecting, dismantling, removing, reassembling and reinstalling relocated household appliances, and other personal property; ◦ Storage of the personal property for a period not to exceed 12 months, unless the agency determines that a longer period is necessary; ◦ Rental Assistance Payments and down payment assistance. N.J.A.C. 5:11-3.5(a); N.J.A.C. 16:6-2.8; N.J.A.C. 5:11-3.6; N.J.A.C. 16:6-2.8(c) ◦ Replacement housing differential payment N.J.A.C. 5:11-3.7 (not to exceed $15,000); N.J.A.C. 16:6-2.7 (not to exceed $22,500)
- 66. 66 Business Relocation Payments Self move agreement versus Actual and Reasonable Moving Expense Payment of actual moving expenses limited to: Actual reasonable and necessary cost: Moving personal property up to 50 miles Inspection and license fees Reconnecting utility service to machinery and equipment For physical changes in or to an existing building to which a business relocates in order to accommodate the machinery and equipment relocated. The owner of a displaced business may elect to replace with a comparable item any item of personal property, including, without limitation, outdoor advertising displays or signs, utilized in its operation which is not to be moved. In such a case, the amount of the moving expense payment shall be the lesser of:
- 67. 67 Business Relocation Payments Actual reasonable and necessary cost: the actual cost of the substitute equipment delivered and installed at the new location less any proceeds form the disposition of the old equipment or, if a bona fide sale cannot be made, less the market value of the old equipment as determined by an independent appraisal; and The estimated cost of relocating the old equipment, as determined by the displacing agency.
- 68. 68 Business Relocation Payments (cont’d) Loss of tangible personal property: A displaced business that elects not to move all or a part of the personal property may receive a payment for actual direct loss of the personal property not moved. Must have prior agency approval The payment for loss of tangible personal property shall be calculated as follows: In the event the items is sold the payment shall be the fair market value less the net sales amount (sales price less cost of sale); In the event the item is not sold the payment shall be the fair market value. The item shall then be the property of the displacing agency.
- 69. 69 Business Relocation Payments (cont.) Professional services necessary for: Planning the move of the personal property; Moving the personal property; and Installing the relocated personal property at the replacement location. Stationery, signs Search fees and time Fees paid to a real estate agent or broker to locate a replacement site, exclusive of any fees or commissions related to the purchase of such site; and
- 70. Successful Handling of Condemnation Case Requires: 70 • Appreciation of Constitutional Magnitude of Issues • Careful Attention to Procedural Details • Careful Attention to Substantive Details • Familiarity with the Property and the Valuation Concepts
- 71. Q&A? Thank you! 71 Anthony F. DellaPelle, Esq., CRE® adellapelle@mckirdyriskin.com www.mckirdyriskin.com