Department of the Army, Dod § 644.70

Department of the Army, DoD § 644.70

(8) The usual tax receipts, mortgage (v) Two true copies of the offer as- releases, judgment satisfactions, etc., sembly or deed executed by the vendor, will be obtained for each monetary en- if offer form has not been utilized. cumbrance which has been discharged. (2) The following statement, appro- These instruments will be placed with priately modified, signed by the Chief, the title papers, unless the landowner Real Estate Division, may be transmit- wishes to retain them. ted in lieu of the above listed certifi- (9) Separate receipts on ENG Form cates: 1571, Receipt for Payment Under Power I certify that the check requested hereby is of Attorney, must be obtained for each to pay an obligation of the United States as disbursement made under the power of reflected on the attached (Offer to Sell) attorney and order to disburse, includ- (easement or deed). I further certify that the ing a receipt for the balance of the pur- parties signatory to this document and chase price paid to the landowner. One shown on the voucher as payees are the same copy of such receipt will be placed in parties reflected in a preliminary certificate of title issued by the ————— Title Com- the project files. pany in the possession of the Real Estate Di- (10) The Closing Officer will prepare vision of this office. The completion of the an original and two copies of ENG transaction will be in accordance with exist- Form 1570, Report of Disbursement ing regulations pertaining to the closing of Under Power of Attorney, showing the real estate acquisitions. exact amount of each disbursement The landowner’s signature on a vouch- made under the power of attorney and er is not necessary. On payments in- order to disburse. The Closing Officer volving civil funds, paragraph 3–7g, ER will prepare an original and two copies 37–2–10, will be followed. of appropriate certification thereon. (p) Procedure After Payment. When the The original and two copies will be above closing requirements have been signed by the landowner, who will re- met, the Closing Officer will: tain one copy. The Closing Officer will (1) Immediately order a final con- place one copy in the files of the tinuation of the type of title evidence project office and will place the origi- which has been contracted for. The nal with the title papers. The separate final title evidence must be dated as of receipts on ENG Form 1571 for each dis- the date of recordation of the deed to bursement made will be attached to the United States, or a subsequent the original ENG Form 1570. date, to show a valid title vested in the (o) Procurement of Check. (1) After ac- United States of America subject only ceptance and distribution of the offer to those title defects which have been assembly and the acquisition is ready administratively waived or to those for closing, the following instruments liens and encumbrances for which suffi- and supporting data will be transmit- cient funds were withheld from the ted to the Finance and Accounting Of- purchase price to satisfy and discharge ficer for scheduling of SF 1166, Voucher them. and Schedule of Payments, and issu- (2) Check carefully ENG Form 1566, ance of check: Payment and Closing Sheet and Re- (i) Two true copies of the preliminary ceipt for United States Treasurer’s opinion of the Attorney General, where Check, to see that funds have been required; or properly disbursed. (ii) Two true copies of a preliminary (3) Review the continued abstract, certificate of title or title guarantee final certificate of title, or title insur- policy where the preliminary opinion ance policy, as soon as they are pre- of the Attorney General is not re- pared and determine that the proper quired; or preliminary and final title evidence (iii) Two copies of ENG Form 909, At- and related papers on the case have torney’s Preliminary Certificate of been completed in proper order. There- Title, in easements acquisition which upon a Final Title Opinion will be pre- cost less than $1,000; and pared. (iv) Two true copies of other support- (4) Transmit as the Final Title As- ing data evidencing amount due and sembly to HQDA (DAEN–REA–P) payable, such as statement of closing WASH DC 20314, the Final Title Opin- attorney; and ion, title evidence and related papers.

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This Final Title Assembly must be Reserve Project Management Office, chronologically arranged and securely 900 Commerce Road East, New Orleans, fastened for permanent filing, and Louisiana 70123. should include the following: (b) Division/District Files. True copies (i) Abstract of title, properly contin- will be retained for Division or District ued through time of closing; or pre- files. liminary, intermediate, and original of final certificate of title; or interim § 644.72 Transfer to Condemnation. binder and original of the Title Guar- (a) Transfer of Tracts from Purchase to antee (Insurance) Policy. Condemnation. If at any time, in the (ii) Curative instruments and mate- course of acquisition by purchase, it rial pertaining to title defects appear- becomes apparent that title clearance ing in the abstract, the final certificate and closing cannot be completed within of title, or the title guarantee or insur- 60 days of the offer to sell, action will ance policy. immediately be taken to acquire the (iii) Deed to the United States, exe- land by condemnation in order to make cuted, stamped, acknowledged, and re- funds available to the landowner. corded. (b) Contents of Letter of Submittal. In (iv) Copy of the accepted offer to sell such cases the letter of submittal will (ENG Form 42 or ENG Form 2970). contain or be accompanied by: (v) Completed ENG Form 798. (1) All title evidence. (vi) Completed ENG Form 1566. (2) An analysis of the title defects (vii) Statement regarding payment of and a statement of the attempts which taxes or amount withheld to pay the have been made to cure the defects. taxes. (3) A statement of the attempts to (viii) Where required, completed ENG have the title infirmities waived by the Form 1290. title company and the reasons for re- (ix) If the power of attorney proce- fusal; or dure is followed, power of attorney on (4) The curative material which has proper Department of the Treasury been obtained to remedy the infir- Form and completed ENG Forms 1569 mities; and and 1571. (5) Two copies of the offer to sell (x) Certified copy of any waiver letter from the apparent owners. or certificate. (xi) Any other papers relating to the ACQUISITION BY PURCHASE, DONATION, title or closing of the case. AND TRANSFER (xii) An additional copy of the deed and the Attorney’s Final Title Opinion § 644.81 General. for review by the Attorney General. Sections 644.81 through 644.88 de- (5) A copy of the executed and re- scribe the procedures of the Corps of corded deed will be retained by the Di- Engineers relating to the acquisition of vision or District Engineer for the proj- land and interests therein for both ect files. military and civil works projects by (6) Similar action will be taken by purchase, donation and transfer. the Closing Officer in acquisition of (a) Applicability. These sections are easements costing not in excess of applicable to all Division and District $1,000. Engineers having real estate respon- sibilities. § 644.71 Final Title Assembly. (b) Acquisition Authority—(1) Limita- (a) Disposition of Final Title Assem- tion. Acquisition of land for use by the blies. The final title opinion and related United States requires express author- papers will be forwarded to HQDA ization (10 U.S.C. 2676, 41 U.S.C. 14). (DAEN–REA–P) WASH DC 20314 for re- (2) Military. Title 10 U.S.C. 2571 au- view and disposition. In addition, cop- thorizes transfer of real property be- ies of deeds and related papers in acqui- tween Defense elements without com- sitions for the Strategic Petroleum Re- pensation if the Secretaries approve. serve Program of the Department of Title 10 U.S.C. 2662 provides that acqui- Energy will be forwarded to: Depart- sition of fee title or transfer of real ment of Energy, Strategic Petroleum property owned by the United States to

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another Federal agency, military de- § 644.82 Prerequisites to acquisition. partment or a state must be reported (a) Authority to Begin Acquisition. Ac- to the Committees on Armed Services tion to acquire a tract of land will not of the Senate and House of Representa- be initiated until the Real Estate De- tives if the estimated value is more sign Memorandum (for all projects ex- than $50,000 and the transaction may cept military) or Real Estate Planning not be consummated until after 30 days Report (for Army, other than Civil have expired from the date the report Works, and Air Force projects) is ap- is submitted to the Committees. Title proved and specific authorization of 10 U.S.C. 2663 provides for acquisition the Chief of Engineers, or the appro- by the Secretary of a military depart- priate Air Force Regional Civil Engi- ment during time of war or when war is neer (AFRCE), to proceed with the ac- imminent of any interest in land, in- quisition of the project is received by cluding temporary use, required for a the Division and District Engineer and Defense installation, munitions plant funds have been made available. Upon or power plant for production of muni- such approval, the Division or District tions, through negotiation and pur- Engineer is authorized to initiate ac- chase, by condemnation or by gift. tion for the acquisition of the estate Title 10 U.S.C. 2672 provides that the approved for the particular project in Secretary of a military department accordance with the procedures herein- after set forth. may acquire any interest in land, in- (b) Tract Description. Authority to cluding temporary use, by gift, pur- initiate engineering planning of a proj- chase, exchange of United States ect will state the mapping procedures owned land or otherwise, that he or his provided for in Chapter 3, ER 405–1–12. designee determines is needed in the It is necessary that land requirements interest of national defense and does be determined, that the various tracts not cost more than $50,000 exclusive of be identified by ownership, and that ac- administrative costs or the amounts of curate tract descriptions be developed. deficiency judgments. Tract ownership data may be developed (3) Civil Works. Acquisition of real by Division or District personnel from property for civil works projects for the local land records or procured by which provision has been made by law contract from a qualified local Govern- is authorized in 33 U.S.C. 591–595a and ment official, abstractor or title com- 701. As in the case of military projects, pany representative. the Secretary of the Army is also au- (c) Title Evidence. With approval to thorized to accept donations of lands proceed with acquisition, title evidence and materials required for civil works contracts can be initiated. The proce- projects. dures for obtaining title evidence are (c) Rights-of-Entry. Rights-of-entry covered in §§ 644.61 through 644.72. Pre- for construction may be obtained by liminary title evidence to confirm own- the Division or District Engineer, after ership and status of the title is pre- requisite to negotiating for acquisition he has been authorized by the Chief of of the land or interests therein. Engineers to acquire the land, pending (d) Appraisals. Concurrently with the completion of acquisition by purchase procurement of title evidence, the ap- or the filing of condemnation proceed- praisal of the land should begin. The ings with declaration of taking. In the appraisal, when approved, forms the event the landowner will not volun- basis for the determination of fair mar- tarily grant a right-of-entry, an ap- ket value which will not be less than praisal of the required interest should the approved appraised value. The ap- be made and negotiations conducted on praisal procedures are covered in Sub- the basis thereof. If the negotiations part B. Normally, one appraisal per are not successful, a declaration of tak- tract (ownership) will be obtained; ing should be submitted to acquire the however, in unusual cases such as necessary rights. The same procedure those which involve novel, unique or will be used for acquiring rights-of- controversial appraisal concepts, there entry for other purposes, such as sur- is no objection to obtaining more than vey and exploration. one appraisal covering the same tract

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if considered advisable by the Division is readily determinable that the impact or District Engineer. When fee tracts would not be significant; however, negative are acquired by eminent domain proce- declarations must be supported by written dures, where the value of the property environmental assessments which generally is between $50,000 and $100,000, only one meet the EIS format requirements.) appraisal need be provided to the De- partment of Justice so long as it is a * * * * * contract appraisal; two appraisals will 3. Real estate acquisition, disposal and be provided for values exceeding outgrants. $100,000. Easement tracts acquired by eminent domain procedures, in excess * * * * * of $50,000, will require two appraisals. At least one of the two appraisals must § 644.83 Negotiations. be made by a contract appraiser. Gen- erally, in these cases, the second ap- (a) Acquisition Objectives. The objec- praisal is procured only after negotia- tive of a land acquisition program is to tions indicate that agreement on price acquire land at a price that will afford cannot be reached and that acquisition each landowner his constitutional by condemnation will be required. The guarantee of ‘‘just compensation’’ as second appraisal will be procured in that term has been defined by Federal order that the Corps can take advan- judicial decisions. The Government tage of any negotiating flexibility that must never pay less than just com- the second appraisal may afford in pensation unless a gift is intended. In order to preclude court action. It is eminent domain proceedings, the just also necessary that the appraisals be compensation due a landowner is deter- relatively current in point of time (not mined judicially by court award or by to exceed six months) since dependent settlement prior to trial; in a purchase upon the real estate activity and de- case, it is determined by negotiations gree of stability of the local economy, leading to a satisfactory price and significant changes may take place in agreement with the landowner. While relatively short periods of time. it is recognized that an appraisal is (e) Environmental Considerations. only an informed opinion and does not Paragraph D3, Attachment 1 to Enclo- establish or determine just compensa- sure 1, DOD Directive 6050.1, dated tion, it is also recognized that, in nego- March 19, 1974, subject: ‘‘Environ- tiating for the purchase of land, an ap- mental Considerations in DOD Ac- praisal is the best and sometimes the tions,’’ requires close environmental only reliable opinion of the market scrutiny of real estate acquisitions, value of the land which is supported by disposals and outgrants to determine if a thorough, acceptable analysis of mar- said actions constitute a ‘‘Major Ac- ket conditions at the time of purchase. tion Significantly Affecting the Qual- Therefore, in the negotiation for the ity of the Human Environment purchase of land, an approved current (MASAQHE).’’ If the action is deter- appraisal shall establish the minimum mined to be a MASAQHE, then an envi- price to be paid for the land being ac- ronmental impact statement is required by the Corps of Engineers. Nego- quired. Paragraph D3 is quoted here for tiations or offers below this price are ready reference: prohibited except where the property is being acquired on a competitive basis D. Certain types of actions require close environmental scrutiny because of the possi- and condemnation is not authorized. bility that they may either affect the qual- (b) Negotiating Objectives. In all cases, ity of the environment or create environ- it is important that the negotiator re- mental controversy. It may be desirable in ceives adequate guidelines and explicit such cases to have a complete presentation instructions. Promptly, after the of the environmental aspects of the proposed amount of the estimated just com- action available for any interested party. pensation is established, the negotiator For these reasons, consideration shall be given to documenting the environmental ef- shall make an initial offer in the full fect of the following types of actions in writ- amount of the fair market value, shall ing: (The written environmental assessment advise the landowner that the land was need not be elaborate for actions in which it appraised for such amount, and shall

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furnish the landowner a written state- information which would help the land- ment of, and summary of the basis for, owner understand what was done to said amount. A concentrated effort will value his property. A statement that be made to acquire the land for that comparable sales of similar properties amount. This written statement will be were examined without more explain the form of a letter which may be nation is not sufficient. Similar infor- delivered personally or by first class mation should be given when any other mail. Such summary will include, as a appraisal technique is used. Unusual minimum, the following items: cases will require a more detailed ex- (1) Definition of the term ‘‘fair mar- planation. ket value.’’ (6) An identification of land classi- (2) An accurate legal description and fication categories (do not show acre- location identification of the real prop- age breakdown). erty and the interest(s) therein to be (7) If only a portion of a property is acquired (legal description and estate to be acquired, an apportionment of may be attached). the total estimated just compansation (3) The amount of the offer and a for the partial acquisition between: statement that such amount: (i) The amount representing the just (i) Is the amount believed by the compensation for the real property to agency to be just compensation for the be acquired; property; (ii) The amount, if any, representing (ii) Is not less than the approved ap- severance damages to the remainder, praisal of the fair market value of the together with a brief narrative descrip- property; tion of the cause thereof; and (iii) Disregards any increase or de- (iii) In the event ‘‘off-setting bene- crease in the fair market value caused fits’’ are involved, these must be by the project for which the property is shown, along with a narrative expla- to be acquired, or by the likelihood nation and the landowner shall be that the property would be acquired for given a ‘‘person-to-person’’ explanation such project, other than that due to by the negotiator. physical deterioration within the rea- (8) If the property contain a dwelling, sonable control of the owner; the value of said dwelling and homesite (iv) Does not reflect any consider- shall be set forth separately, with the ation of or allowance for any reloca- statement that this figure will be used tion assistance and payments which in calculating housing relocation bene- the owner is entitled to receive. fits under title II of Pub. L. 91–646. (4) An inventory identifying the (9) If any building, structure, fixture, buildings, structures, fixtures, and or other improvement, comprising part other improvements, including appur- of the real property, has been identified tenant removable building equipment, as being owned by a tenant who has the which are considered to be part of the right or obligation to remove it at the real property for which the offer of just expiration of his term, the amount of compensation is made. The inventory the value of such building, structure, shall include a statement of the utility fixture, or other improvement, being and condition of said buildings, struc- the greater of: tures, fixtures, and other improve- (i) The amount which the tenant’s ments. improvement contributes to the fair (5) A description of the appraisal market value of the real property to be technique used, i.e., market approach, acquired; or income approach, or cost approach, in (ii) The fair market value of the ten- sufficient detail to explain clearly to ant’s improvement for removal from the landowner the process by which his the real property. The basis of such property was valued. Thus, as an illus- amount shall be included. tration, where the market approach (c) Appraisal reports or the apprais- was used, the explanation should in- er’s analysis (complete breakdown of clude the number of comparable sales principal value elements) will not be used, their general location and type, revealed by the negotiator unless spe- the factors considered in adjusting cifically authorized. Cases involving sales of subject property, and any other property for which the highest and best

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use cannot be definitely established, be prepared and forwarded as set forth and to which the exceptions mentioned in paragraph (d)(1) of this section. in paragraph (a) of this section do not (e) Negotiating Guidelines. (1) The ne- apply, will be reported to HQDA gotiator should be thoroughly familiar (DAEN–REA) WASH DC 20314 for spe- with the Division and District nego- cific instructions. If the land is being tiating guidelines and should study the donated, initial offers are not nec- background data of the project, con- essary, and the appraisal will be sig- sisting of the authorizing act, survey nificant in negotiations only when con- report, project document, design sidering the conditions under which memoranda, etc.; the applicable ap- the donation is made as, for example, praisal reports; tract ownership data; an agreed valuation for tax purposes. preliminary title certificates; and Negotiations will be based on current other related material. He should be market values, which normally means entirely familiar with the project and that last offers will be based on ap- the owner’s individual property before praisals not over six months old. Ex- initiating negotiations. ceptions will be required in instances (2) The owner shall be provided with of rapid escalation of values when the available brochures which explain the appraisal is quickly outdated or in in- project and the Pub. L. 91–646 benefits, stances of a relatively static market or together with the written statement other condition resulting in a minimal and summary required by § 644.83(b). change in property values. In such The negotiator should explain to the landowner the Government’s require- cases an explanation will be necessary. ment for the land, the amount of land (d) Exceptions—(1) Corps Employees. If required, the estate(s) to be acquired, an employee of the Corps of Engineers the terms and conditions of the Gov- has a direct interest in a tract of land ernment’s contract form, and the fact being acquired by the Corps for public that relocation assistance benefits may use, the tract will be acquired by con- be available. He should furnish the demnation. In cases of this nature, ap- landowner a copy of a map indicating praisal reports should be prepared, re- the boundaries of that portion of his viewed and forwarded together with a land to be acquired, where the entire declaration of taking, with the con- ownership is not being acquired or demnation assembly. The negotiator’s where different estates are being ac- report, of course, will not be included. quired in the same ownership, specify- The Department of Justice will be re- ing the estate in each area. quested to handle all further matters (3) Negotiations will be continued in pertaining to settlement or trial of the an effort to obtain acceptance of the case. The Department of Justice has Government’s offer or a reasonable agreed to accept full responsibility for counteroffer from the landowner, or negotiations and approval of settle- until it is definitely determined that ments or awards in such cases, without such a counteroffer will not be forth- contacting any Corps personnel other coming. It is not intended that nego- than the owner of the interests being tiations be continued until an acquired. unacceptable counteroffer is finally ob- (2) Members of Congress. Since, under tained. However, in an effort to obtain 18 U.S.C. 431 and 432, members of Con- a reasonable counteroffer above the gress who hold interests in land that is Government’s estimate, the negotiator required for project purposes cannot will, if necessary, take the initiative in contract for sale of such interests to suggesting a series of prices within a the Government, these interests will range which, in accord with the guide- also be acquired by condemnation. Ne- lines discussed in § 644.84, has been pre- gotiations for acquisition by purchase determined to be reasonable. or for settlement without trial cannot (4) The interest of both owners and be conducted by officers or agents of tenants must be considered and pro- the United States. The determination tected. The tenant is a proper party to of just compensation must be made by the transaction, and every effort must judicial proceedings. Appraisal reports be made to obtain the consent of the and the condemnation assembly should landowner and tenant as to the price to

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be paid to the tenant for his leasehold (9) An appraiser is not, under any cir- interest. This can be accomplished by cumstances, permitted to negotiate for the tenant’s execution of ENG Form the acquisition of a tract of land for 1564, Consent to Offer to Sell Real which he has prepared the appraisal or Property, which shall then accompany reviewed it as reviewing appraiser. the owner’s offer to sell. In cases where (f) Discussions With Landowners. In the tenant executes this form, payment order to avoid the creation of negotiat- for the tenant’s interest can be made ing patterns, and keeping in mind that to him in the closing of the purchase counteroffers must be justified as being transaction. This procedure will be fol- just and reasonable, discussions with lowed whenever possible. An exception landowners should be conducted with- is permitted in those cases where the out disclosing the extent of the delega- landowner and tenant prefer to handle tions and redelegations of authority to the matter as a private transaction be- accept counteroffers. However, during tween themselves. In such cases, it negotiations on individual tracts, the should be determined that a satisfac- landowners must be advised that, in tory agreement has been made by the the event of condemnation, the deposit landowner and tenant. Consideration will be in an amount no less than the should be given to any interest which approved appraised value, since the the tenant may have in growing crops. question of value cannot be resolved by This procedure is also applicable to any negotiations. It must further be made third party having an interest in the clear that this advice is not in the na- property, except through severance of a ture of a threat, but is an explanation subsurface estate. of the statement of policy directed by (5) Negotiations with landowners will the Congress and the law. The nego- be conducted in a fair and courteous tiator will also inform each owner that manner. The negotiator must not, offers and counteroffers made during under any circumstances, resort to co- negotiations are made without preju- ercion or threats of condemnation. dice in the event of condemnation. The negotiator will make a notation on the (6) The negotiator has no authority Negotiator’s Report to the effect that to obligate the Government in any he has so informed the owner. manner beyond the contract form. He (g) Obtaining the Written Counteroffer; must refrain from oral promises or un- Preparation of Negotiator’s Report. If the derstandings and include all terms and negotiator considers that a conditions in the contract form. counteroffer in excess of the approved (7) Although appraisal reports cannot appraised value is in the amount which be made available for inspection by a should be considered for acceptance, landowner, the various elements of the counteroffer will be reduced to value considered by the appraisers writing on ENG Form 42, Offer to Sell may, and should, be discussed with the Real Property, or on ENG Form 2970, landowner to satisfy him that all ele- Offer to Sell Easement, and be properly ments of compensable values and dam- executed by the landowner. In such ages have been considered in arriving cases, a complete written record of ne- at an overall value for the property gotiations with respect to each tract or being acquired. Care will be exercised ownership, as appropriate, will be during any discussion not to reveal maintained by means of ENG Form specific amounts related to any ele- 3423, Negotiator’s Report, Part I. This ments considered in the appraisal, ex- record will state the chronological his- cept the acquisition cost assigned to tory of negotiations, all elements con- the dwelling for purpose of calculating sidered in evaluating the landowner’s replacement housing payment under final counteroffer, and the justification section 203, Pub. L. 91–646. for such recommendation in accord- (8) Any interest in a tract of land ance with § 644.84. The justification will sought to be acquired, or any type of be fully recorded in ENG Form 3423A, relationship with the owner, disquali- Negotiator’s Report, Part II, which is a fies the negotiator from participating separate page of this report, and which in negotiations for the acquisition of will be removed in the Office of the that particular tract. Chief of Engineers prior to submitting

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the counteroffer assembly to higher au- and cost of preparing trial documents thority for approval. Final action on and exhibits. Consideration should also the counteroffer, either by the Sec- be given to prior counteroffers which retary of the Army, the Chief of Engi- have been accepted and settlements ap- neers or under the delegated authority proved prior to trial. ‘‘Liability risks’’ to Division and District Engineers, will of proceeding to trial are the amount be entered on this record as soon as of the anticipated award over and that information is available. above the appraised value, taking into consideration probable testimony on § 644.84 Counteroffers. behalf of the Government and the land- (a) Consideration of Counteroffers. In owners, as well as the history of con- negotiations with landowners, if agree- demnation awards in the Federal court ment cannot be reached with a land- jurisdiction in which the lands are lo- owner as to the purchase price estab- cated, and the amount of interest on a lished by the appraisal, the lowest deficiency judgment which would re- price demanded by the landowner may sult from the anticipated award. Seri- be considered by the Division and Dis- ous consideration of the above factors trict Engineer, and the Chief of the may justify a recommendation for au- Real Estate Division, on the basis of thority to accept a counteroffer which the following factors: otherwise would appear to liberal. (1) Variations in Appraisals. In the (3) Non-Compensable Elements of Value. usual case, the Corps will have the Elements of value based on consequen- opinion of only one appraiser with re- tial damages or speculative values, as spect to the market value of the par- defined by the Federal courts, may not ticular tract of land. It must be recog- be recognized in considering a land- nized that the opinion of a second owner’s counteroffer. However, even equally competent appraiser might be though a landowner’s counteroffer higher or lower than that of the ap- might include non-compensable items praiser who appraised the property. of value, favorable consideration of the Hence in considering counteroffers of counteroffer may be given if it can be landowners, Division and District Engi- justified on the basis of variances in neers should keep in mind that two appraisals, built-in costs, and liability equally competent appraisals may re- risks of proceeding to trial. flect reasonably divergent opinions of (4) Value of Reserved Items. The sal- value as to the same property. In- vage value of improvements and the stances requiring two appraisals are value of crops and/or timber reserved covered in § 644.82(d). by the landowners, as provided in (2) Built-in Costs, Prior Counteroffers, § 644.86 (g), (h), and (i), will not be in- Settlements and Liability Risks of Pro- cluded in the amount of the ceeding to Trial. It is recognized that counteroffer in determining the excess there are certain Government adminis- of counteroffers over appraised values trative costs and liability risks in- when applying the dollar and percent- volved when property is condemned by age limitations in the delegations of the United States and the land value is authority to Division and District En- judicially determined. These items are gineers for acceptance of counteroffers. definite in character but the attendant The determination of the excess will be costs will vary. ‘‘Built-in’’ costs of pro- made on the basis of the appraised ceeding to trial include, but are not value of the interests being acquired limited to, the following items: Sala- (including the value of the reserved ries of all Government personnel par- items) compared to the cash payment ticipating in trial preparation, pre- which will be made to the landowner if trial hearings, and the actual trial; the Government accepts his cost of an additional appraisal(s); wit- counteroffer. However, this method of ness fees of contract appraisers em- analyzing the counteroffer is intended ployed by the Corps of Engineers or the for use only in determining the limita- Department of Justice; travel costs of tions of authority. The overall trans- all Government personnel and consult- action must be in the interest of the ants participating in trial preparation, United States and not afford an unwar- pre-trial hearings, and the actual trial; ranted windfall to the vendor.

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(b) Application and Limits of Delegated of the Division and District Engineer. Authority. The negotiating procedures An analysis should be made of this outlined herein will apply to all acqui- offer as compared with other sitions by the Corps of Engineers for counteroffers accepted for the project, the Army (military and civil), Air as well as with results in condemnation Force, Department of Energy (DOE), cases settled before trial. Signed offers National Aeronautics and Space Ad- will not be forwarded unless they con- ministration (NASA), and other Fed- tain deviations requiring approval by eral agencies which utilize the services the Chief of Engineers. Appraisal re- of the Corps for acquisition of real es- ports are helpful and may be necessary tate. Delegations of authority to Divi- reference for proper consideration of sion and District Engineers and to the the recommendation. In the event the Chiefs of their Real Estate Divisions to appraisal report was approved by accept offers in excess of the appriased HQDA (DAEN–REA), the forwarding valuation have been made. Offers which letter should refer to the approval cor- do not exceed the approved appraised respondence and data. It will not be value may be accepted by authorized necessary to enclose copies of the ap- Division and District personnel regard- praisal report. Where only a portion of less of the amount. Other offers will be an ownership is required, information handled as outlined in the paragraphs should be furnished in the Negotiator’s which follow. Report or in the transmittal cor- (c) Exercise of Delegated Authority. respondence (1) as to whether or not The approval of a counteroffer over the the remainder portion is considered to appraised value, but within the author- be an uneconomic remnant and (2) if ity redelegated to Divisions and Dis- so, as to whether or not an offer was tricts, will be evidenced by the Divi- made to acquire the entire property. sion Engineer, the District Engineer, Further, a statement is required as to the Chief of the Real Estate Division, whether or not it is considered that the or the incumbent of the position to acquisition will have any adverse effect which redelegations have been made, in on the acquisition of the remaining one of the following manners: land required for the project. (1) Manually accepting, on behalf of the United States, the offer to sell, as § 644.85 General negotiation proce- provided in § 644.87; or dures. (2) Manually executing a dated nota- (a) Provisions of Military Construction tion of approval of the purchase price, Appropriation Act. (1) Section 108 of the to be placed in the tract file, preferably Military Construction Appropriation on the original of the Negotiator’s Re- (MCA) Act of 1978 (Pub. L. 95–101) pro- port (§ 644.83(g)). vides that no part of the funds provided (d) Submission of Counteroffers to the in the Act shall be used for purchase of Chief of Engineers. Recommendations land or easements in excess of the for the grant of authority to accept value as determined by the Corps of counteroffers which are considered rea- Engineers, except: sonable, but which cannot be accepted (i) Where there is a determination of by the Division Engineer, the District value by a Federal Court; or Engineer, or the Chief of the Real Es- (ii) Purchases negotiated by the At- tate Division, within the limitations of torney General or his designee; or delegated authority, will be submitted (iii) Where the estimated value is less to HQDA (DAEN–REA) WASH DC 20314 than $25,000; or for consideration. Negotiator’s Re- (iv) As otherwise determined by the ports, prepared in accordance with Secretary of Defense to be in the public § 644.83(g) will accompany this submis- interest. sion; the contents thereof need not be (2) The above wording, except for repeated in the transmittal letter or in paragraph (a)(1)(iv) of this section, con- forwarding indorsements. The assem- stitutes a limitation on accepting or bly will consist of the forwarding cor- submitting a recommendation for ap- respondence and the Negotiator’s Re- proval of a counteroffer in excess of the port, with any additional material appraised value. Paragraph (a)(1)(iv) needed to support the recommendation brings military acquisition within the

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general acquisition policy required a declaration of taking, in order to under Pub. L. 91–646. Future MCA Acts make funds available to the landowner should be carefully examined to deter- and to maintain the project acquisition mine if any limitations on acquisition schedule. The landowner should be ad- have been restored. vised in writing, sufficiently in ad- (b) Local Cooperation Projects. The vance of the submission of the con- participation of a non-Federal agency demnation assembly to the Chief of En- in a federally-assisted project will be in gineers, that condemnation proceed- accord with section 221 of Pub. L. 91–611 ings will be recommended and the rea- and subpart J (to be published). Acqui- son therefor. Condemnation assemblies sition of real property by a non-Federal will include copies of the Negotiator’s agency will be in accord with sections Reports or other written records of ne- 210 and 305 of Pub. L. 91–646 and this gotiations. The estimated compensa- chapter. tion to be deposited in the registry of (c) Negotiations on the Basis of Owner- the Federal District Court with the fil- ship; ‘‘Package-Deal’’ Negotiations. (1) ing of a declaration of taking will be in Normally, negotiations for all interests the amount of the approved appraisal. in all tracts which are being acquired from one parent ownership will be ne- § 644.86 Exceptions and reservations. gotiated at one time. These tracts will usually consist of all those to which (a) General. Prior to the enactment of the same basic tract number has been Pub. L. 91–646, the Corps encompassed a assigned. Exceptions may be made only very generous policy of priority leasing where negotiations for some of the with respect to former owners and ten- tracts in a series must be accomplished ants, in order to ease the burden of to obtain possession, or for other criti- people who had to relocate because of cal reasons. Piecemeal acquisition the Corps’ projects. Recognizing the in- must be avoided if at all possible. adequacies of the well-intentioned at- (2) When more than one tract is oper- tempts by acquiring agencies to make ated by the owner as a unit, negotia- whole the former landowner or tenant, tions should take place on the two or the Congress enacted Pub. L. 91–646 more tracts or groups of tracts, wheth- which was approved on January 2, 1971. er or not they bear the same basic It would appear that the Congress in- tract number. tended that such law provide for the (3) In cases where an owner insists on fair and equitable treatment of persons a ‘‘package-deal’’ negotiation on all who are displaced, without having to tracts in the same ownership, or hav- rely on interim measures, such as pri- ing at least one common owner, the ne- ority leasing, to ease the inevitable re- gotiations will be considered as one location. In House Report 91–1656, the transaction. Committee on Public Works of the (4) Tracts which are in the same own- House of Representatives noted the ership, but which are not operated as a likelihood that adequate housing may unit, should, unless the owner desires not be available readily and indicated otherwise, be negotiated separately, on the basis of the separate appraisals this as its reason for including the pro- which would be prepared in this type of vision in the law that satisfactory re- case. placement housing must be available (5) Under paragraphs (c)(1), (2), and before displacement. In view of this, it (3) of this section, the limitations of is incumbent on the District Engineer authority to accept counteroffers will to be opportune in seeking out replace- be applied to the entire transaction. ment housing and to be judicious in the (d) Acquisition by Condemnation if Ne- early relocation of owners and tenants gotiations Fail. As soon as it is deter- before market changes eliminate any mined that a satisfactory agreement available supply of replacement homes. cannot be reached after full consider- It is also essential that the District ation of all reasonable counteroffers Engineer be diligent in providing the received, action will be promptly taken required relocation assistance advisory to acquire the property by condemna- services and benefits authorized by the tion proceedings, including the filing of law.

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(b) Possession by Government. It will (i) Property which the vendor is ex- be the objective of the District Engi- cepting or rights which he is reserving neer to have the premises vacated and and which are created for the first to cause unneeded improvements to be time; and removed at the earliest practicable (ii) Rights which third parties have date and conform to the Congressional acquired in the past, generally referred intention expressed above. In addition to as outstanding rights in third par- to the above, reasons for this objective ties. are: (2) Exceptions or reservations of (1) To provide for the expeditious rights which the vendor may retain, payment of benefits to former owners without interfering with the construc- and tenants; tion or operation of the project, will be (2) To complete administration of the set forth in the offer and deed by a actual relocation of owners and ten- clause following the description, begin- ants in a timely manner; ning with the words: ‘‘Excepting ** *’’ (3) To avoid maintenance and secu- or ‘‘Reserving * * *.’’ Any other out- rity problems with respect to acquired standing rights, subject to which the improvements; United States is acquiring title, held (4) To prevent vandalism, trespassing by third parties will be set forth in the and poaching with respect to acquired offer and deed by a clause, following improvements; the description, beginning with words, (5) To avoid any implication that ‘‘Said premises are conveyed subject former owners or tenants may be per- to * * *.’’ Negotiations with the sur- mitted to remain indefinitely on the face owner will include the owner’s in- federally acquired property; terest in the subsurface, unless acquisi- (6) To cause land to be leased on the tion of a lesser interest has been au- basis of the most practicable size and thorized by directive or specific ap- configuration rather than on the basis provals. These negotiations will not in- of the size of the units acquired; clude interest severed and outstanding (7) To permit the general public to in third parties by purchase or lease, bid for the lease of federally owned unless the surface owner agrees to re- land rather than restricting the privi- move the outstanding interest or lege of leasing to the former owner or agrees to obtain a subordination from tenant; and the holder of the outstanding interest (8) To avoid a backlog of incomplete if that is consistent with the acquisi- actions when construction or flooding tion plan. If negotiations with the sur- is imminent or the land is otherwise face owner are successful, an Offer to required. Sell will be obtained, reciting the out- (c) Possession Reserved to Former Own- standing interest in the ‘‘Subject to’’ ers and Tenants. It is considered that paragraph of the form, unless the sur- the policy of granting priority leases to face owner has agreed to remove the former owners and tenants has been outstanding interest (or obtain a sub- overridden by the enactment of Pub. L. ordination, if appropriate), in which 91–646. Accordingly, this policy is being case the Offer to Sell must recite spe- phased out, and where applicable, the cifically that the surface owner is as- acquisition agreement will set forth suming this obligation. In order to the dates agreed upon for the vacation carry out the requirements of this of the premises by the owner and ten- paragraph, the title evidence must be ant without commitments, express or examined prior to negotiations or, in implied, as to the leasing of the prem- any event, prior to acceptance of the ises after such dates. Procedure for Offer to Sell. providing for vendor’s continued pos- (e) Right to Repurchase Prohibited. In session after the Government’s acquisi- no case will an offer be obtained in tion is covered in paragraph (l) of this which the vendor reserves the right to section. repurchase the property. Such a res- (d) Outstanding Rights. (1) When the ervation would be contrary to the Fed- United States is acquiring title subject eral Property and Administrative Serv- to outstanding rights, the offer will dif- ices Act of June 30, 1949, 63 Stat. 377, 40 ferentiate between: U.S.C. 471, et seq.

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(f) General Reservation Guidelines. (1) part of the block would require the as- Reservations of the right to remove sessment of severance damage, even if crops, timber, buildings, and improve- the value of the interest or the amount ments during a specified period will of the severance damage would be in a not be permitted without express ap- nominal amount. On this basis, sub- proval of the Division or District Engi- surface or other interests need not be neer on civil works projects, the Army contiguous to constitute a block own- or Air Force using service on military ership. Block ownership interests will projects, or the Federal agency, if not be acquired (or subordinated) other than the Army or Air Force, for piecemeal. which the land is being acquired. (5) Acquisition of the required inter- (2) At the time of the approval of the ests, including subordination, held in acquisition by the Chief of Engineers, a block ownership should be started as determination will generally have been soon as the extent of an operational made as to whether subsurface rights unit is determined. As stated in para- and/or water rights will be acquired or graph (f)(4) of this section, all interests left outstanding. Acquisition will be on in a tract of land should be acquired at the basis of such determination and as one time or as close in time as possible. outlined below. Lands will be acquired Dual acquisitions of entire areas, one subject to minerals, oil and gas rights for surface rights and then for sub- or other similar interests severed and surface interests, should be avoided outstanding in third parties by pur- and acquisition of separate interests chase or lease and as approved by the should be scheduled to coincide. Chief of Engineers. (g) Reservation of Buildings and Im- (3) Where it is not possible to acquire provements. The reservation by vendors or subordinate an outstanding interest of the right to remove buildings and by negotiation and the interest will improvements will be permitted under not interfere with the operation of the the following conditions: project, consideration may be given to (1) Where the Division or District En- obtaining a waiver from the Office of gineer, in civil works projects, the the Chief of Engineers on the basis of using service in Army and Air Force taking a calculated risk rather than re- projects, or the Federal agency, if sorting to condemnation (paragraph (k) other than the Army or Air Force, for of this section). Waivers will be consid- which the land is being acquired, has ered on a tract-by-tract basis or on a determined that they will not be need- project segment basis. Since such waived for the purpose of the project; ers involve several elements of the Of- (2) The consideration to the Govern- fice of the Chief of Engineers (Civil ment for the reservation will be an Works or Military Construction as well amount negotiated at not less than the as Real Estate), the basis for the cal- appraised salvage value of the building culated risk must be fully explained. and improvements which are reserved, (4) Concurrently with the negotia- and such amount will be deducted from tions to acquire from the surface the negotiated price at the time of ne- owner, negotiations should be opened gotiation prior to execution of the with the owner of the subsurface rights offer; or other interests severed and out- (3) Where a reservation is permitted, standing in third parties by purchase the following clause will be inserted in or lease and required for the project, the offer, following the description of unless these interests are held in the land: ‘‘block ownership.’’ Block ownership Excepting and reserving to the Vendor the exists where a person, corporation, or right to remove (enter description of build- other entity owns subsurface or other ings) on or before ——— 19 —, which the Ven- interests in connection with more than dor agrees not to relocate on other land to be one surface tract and in sufficient acquired for the project; provided, however, amount for the entire interest holding that, in the event that the said buildings and improvements are not completely removed to have added value, for operational or on or before said date, the right of removal other reasons, because it is in a block shall terminate automatically, and the Unit- ownership. In other words, block owned States shall have a good and indefeasible ership exists when the acquisition of a title to said buildings and improvements

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which remain without notice to the Vendor; chase price at the time of preparation and provided further that, in the event said and execution of the offer. buildings and improvements are relocated on (4) Where a tenant has an interest in other land to be acquired for the project, the growing crops, the value of his interest United States shall have good and indefeasible title to said buildings and improvements must be fixed by use of ENG Form 1564, without notice or further compensation to Consent to Offer to Sell Real Property, the Vendor. which provides that the value of the tenant’s interest, as agreed upon by The date on which the buildings or im- the landowner and tenant, will be paid provements must be removed must be from the purchase price for the land. fixed so that there is no interference The use of this form not only protects with contruction or carrying out the the tenant but, in addition, provides a mission of the project. The date for the simple method for extinguishing rights removal should allow a reasonable which the United States is legally time for removal of the improvements, bound to recognize. Where a tenant usually not more than 90 days, except wishes to reserve the right to remove that for valid reasons the Division or crops, it must be done in the name of District Engineer may grant an exten- the landowner, and in like manner. To sion of time for removal. The right to accomplish the foregoing, any other remove such buildings cannot be pro- form is satisfactory, in lieu of ENG longed indefinitely and certainly such Form 1564, as long as closing require- right cannot survive the limited right ments are satisfied. of possession reserved to former owners (i) Reservation of Timber. (1) The res- and tenants as provided in paragraph ervation of the right to remove timber (c) of this section. by vendors will be permitted only with (h) Reservation of Growing Crops. (1) the express approval of the Division or The reservation by the owners of the District Engineer, with the concur- right to harvest and remove growing rence of the using service in cases crops should be encouraged in order to other than civil works projects of the conserve land acquisition funds and to Corps of Engineers. avoid the costs incident to disposal of (2) Reservation of the right to re- crops by the Government, whenever move timber will be handled in sub- there is a probability that possession of stantially the same manner as that de- the land will not be required prior to scribed for the reservation of buildings the harvest season. and improvements. If owned by a third (2) Where a reservation is permitted, party, ENG Form 1564 will be used in the following clause will be inserted in the same manner as for crops unless the offer, following the description of the timber interests are held in block the land: ownerships. The consideration to the Reserving to the vendor the right to har- Government for the reservation will be vest all of the growing crops located on the an amount not less than the appraised above described land on or before ——— 19— value of the timber, giving full weight . In the event the crops are not harvested on to any unusual difficulty in harvesting or before said date, the right of removal and transporting which are caused by shall terminate automatically, and the Unit- the size, shape and location of the ed States shall have a good and indefeasible stand reserved, time limitations for re- title to said crops, without notice to the ven- moval, clearing requirements over the dor. above those normally involved in pru- The date on which the crops must be dent harvesting, and similar factors. If removed must be fixed so that there is necessary, the stand reserved will be no interference with construction or re-appraised on this basis. An amount carrying out the mission of the project. not less than this appraised value will (3) The consideration to the Govern- be deducted from the purchase price at ment for the reservation will be an the time of preparation and execution amount not less than the appraised of the offer. value of the crops as of the date of sur- (3) Where a reservation is permitted, render of possession as disclosed by an the following clause will be inserted in approved appraisal report, and such the offer following the description of amount will be deducted from the pur- the land:

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Reserving to the vendor the right to cut (2) If the owners of the surface and and remove on or before ——— 19—, all trees subsurface rights are agreeable, the in excess of ——— inches in diameter at separate interests can be acquired in a breast height (DBH) located on the above-de- single transaction by use of ENG Form scribed land. In the event the timber is not removed on or before said date, the right of 1564, Consent to Offer to Sell Real removal shall terminate automatically, and Property. This method is the most de- the United States shall have a good and inde- sirable one, and, if used, the purchase feasible title to said timber, without notice price in the offer will cover both the to the vendor. surface and subsurface interests and the offer will not be taken ‘‘subject to’’ (j) Coal, Oil, Gas or Other Minerals. the subsurface rights. Acquisition of land or interests therein (3) Subordination of the subsurface for project purposes will usually in- interest based upon the value of the clude the subsurface as well as the sur- minerals in place and which will allow face, except in areas where minerals continued production by the mineral have more than a nominal value. When owner or lessee must be pursuant to the mineral, oil and gas rights have an such terms as will safeguard the Gov- identifiable value or are the subject of ernment’s interest and preclude a separate estates in the land, such min- windfall to the mineral owner or lessee. eral, oil and gas rights will not be ac- Value of the minerals in place will not quired except where the development exceed the recoverable portion of said thereof would interfere with project minerals using agreed upon production purposes, but mineral rights not ac- methods. See Subpart A for detailed quired will be subordinated to the Gov- treatment in the section pertaining ernment’s right to regulate their devel- primarily to Real Estate Design Memo- opment in a manner that will not randa. interfere with the primary purposes of (4) When the third-party owner of the project, including public access, subsurface rights refuses to enter into and not be inimicable to the environ- an agreement as contemplated in para- ment. This is covered in more detail in graph (j)(2) of this section, the title to subpart A. It is essential, however, in the surface estate may be acquired sep- many acquisitions that the subsurface arately, and the subsurface rights out- rights be acquired. In others, where standing in third parties acquired as a these rights need not be extinguished, separate transaction. The offer for the provision must be made in the offer the acquisition of the surface estate will deed to subordinate such rights to provide for the conveyance of all inter- project requirements, by excluding the ests of the surface owner in and to the owners of such rights from the area, or subsurface estate, as well as all surface limiting exercise of such rights so that rights, and provide for taking ‘‘subject they will not interfere with the pri- to’’ the subsurface rights outstanding mary purposes of the project, including in third parties. In such cases, the ne- public access. The following guidelines gotiations described in § 644.83 will be are applicable in these cases: conducted on the basis of the approved (1) Where it has been determined that appraisal, less the appraised value of subsurface rights in the vendor, or out- the outstanding subsurface rights. standing in third parties, must be ac- (5) Where it has been determined that quired, extinguished or subordinated, the subsurface rights and interests such arrangements will be made in the therein need not be acquired, but the course of obtaining an offer for the sur- owners of such rights must be excluded face or subsurface interests. Where the from the area, and the owner of the negotiations for acquisition, extin- surface is the owner of the subsurface guishment or subordination of sub- estate, the offer will contain a clause surface rights will be delayed, and it is providing that he relinquish, for the considered advisable to proceed with period that title to the tract is vested surface acquisition to keep pace with in the Government, all rights to enter project requirements, appropriate rec- upon the lands covered by the offer or ommendations and justification will be that he will limit entry and explo- submitted to HQDA (DAEN–REA) ration in a named manner so as not to WASH DC 20314 for approval. interfere with the operation of the

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project. If third parties own subsurface whether any of these exceptions should rights or interests, a similar waiver of be eliminated is the responsibility of the exercise of such rights must be pro- the Division or District Engineer, after cured from all third parties having any coordination with the using service if interest in the subsurface estate, other than the Department of the whether as lessees or assignees. The Army. If such interests are to be left waiver by third parties must be ob- outstanding, they should be included in tained at the time the offer is procured the ‘‘subject to’’ clause of the Offer to for the surface estate, unless these sub- Sell. surface interests are held in block own- (4) Offers to Sell may be accepted ership. subject to subsurface mineral interests (k) Title Exceptions—Administrative owned by third parties in accordance Waivers. (1) A distinction should be with § 644.86(d). In such case, the ‘‘sub- made between those title defects, ob- ject to’’ clause of the Offer to Sell jections, liens or encumbrances which, should recite the specific interest if not eliminated, might possibly de- which is being left outstanding. Where feat or adversely affect the Govern- it is not possible to acquire or subordi- ment’s title, and those interests in the nate an outstanding subsurface inter- property owned by parties other than est by negotiations and the outstand- the grantor. All encumbrances, defects, ing interest will not interfere with con- and outstanding interests which can- struction, operation or maintenance of not be waived under paragraphs (k) (2), the project, consideration may be given (3), and (4) of this section must be to obtaining a waiver from HQDA eliminated or a waiver of the defect se- (DAEN–REA) WASH DC 20314 on the cured from the Attorney General. basis of taking a calculated risk rather (2) Title may be taken subject to an than resorting to condemnation. Such outstanding third party interest which waivers may be considered on a tract- has been administratively waived. Re- by-tract, segment-by-segment, or quests for administrative waivers shall project basis. Where a number of small be submitted to HQDA (DAEN–REA) mineral interests in a project are to be WASH DC 20314 for consideration, to- recommended for waiver, it is pref- gether with recommendations from Di- erable that the recommendation be vision and District Engineers. The rec- submitted on an entire project or group ommendation for waiver should be co- of segments at one time. Such a rec- ordinated with the using agency, if ommendation should specifically iden- other than Department of the Army tify the subsurface mineral interests land (military or civil works), and which are to be left outstanding, to- should be accompanied by a certificate gether with the estimated value of signed by the Chief, Real Estate Divi- each interest, and should be accom- sion or the Chief Appraiser, certifying panied by a map(s) on which the areas that the outstanding interest has no affected by the outstanding interests contributory value to the estate being have been outlined. The basis for the acquired and will not interfere with the calculated risk should be explained purpose for which the property is being fully. acquired. (l) Possession Reserved to Vendor. (1) (3) It has previously been administra- The objective in acquisition is to ob- tively determined that all lands for De- tain possession for project purposes at partment of the Army (military or the earliest practicable time. It is rec- civil works) or Air Force projects may ognized, however, that there are occa- be acquired ‘‘subject to existing ease- sions when possession by the Govern- ments for public roads, public high- ment may be delayed and provision ways, public utilities, railroads and must be made for continued possession pipelines,’’ and ‘‘to the reservations, by the former owner in order to meet exceptions and any other outstanding the requirements of the Government’s rights contained in or referred to in acquisition policy and to further soften patents issued by the United States,’’ the impact of the Government’s acqui- and also ‘‘to water rights, claims or sition. The retention of possession will title to water, if any, or other similar enable the owner-occupant of farm title exceptions.’’ A decision as to land, or residential property, to receive

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his purchase money and remove im- growing crops, and to avoid abrupt dis- provements reserved by him, and per- locations. The period of possession re- mit occupants who may be former own- served in the offer, or for which request ers or tenants the privilege of harvest- for the order of the court is deferred in ing growing crops and sufficient time declaration of taking cases, should gen- to relocate to other locations. Accord- erally be co-extensive with the crop ingly, the Division or District Engineer season or the date that, by custom in may make provision for the former the community, leases of such prop- owner, occupant, and/or his tenant(s) erties ordinarily expire: Provided, how- to remain in possession of the land ever, That such period does not exceed under the terms and conditions as fol- 12 months from the date title vests in lows: the Government. Reservation of posses- (i) If the tract is to be acquired by di- sion or delay in entry of order of pos- rect purchase, the provision for reten- session that will interfere with the tion will be written into the offer (ENG Government’s requirements for use of Form 42, ENG Form 2970, or ENG Form the land will not be allowed. 1564) and will read substantially as fol- (iv) In the case of owner-occupied lows: residential property other than farm residences, possession may be per- Notwithstanding the provisions of paragraph —— of this offer, (and/or consent to mitted for a sufficient time to allow option) the occupant (vendor and/or his ten- orderly relocation, but no longer than ant) now in possession of the property, in 12 months after title vests in the Gov- consideration of the protection and mainte- ernment. nance of the land, buildings, and structures, (v) In connection with the acquisi- and protection of the property against loss tion of commercial, industrial, tenant- by fire, waste, or other causes, to which the occupied residential property other occupant hereby agrees, reserves the right to than residences occupied by farm ten- occupy the property until —————. Such occupancy is subject to revocation by the ants, and special use properties, ordi- (Division) (District) Engineer at any time by narily the procedures of reserving pos- giving —— days notice in writing to the oc- session to the vendor by a clause in the cupant if possession of the property is re- offer, or deferring the right to posses- quired by the United States; and provided sion under a declaration of taking pro- further that the vendor-occupant or his ten- ceeding, should not be utilized. In such ant will remove no improvements or timber cases, after title vests in the United unless otherwise provided herein. States, the continued possession of the (ii) When the tract is to be acquired property by vendor or tenant should be by condemnation, the circumstances of formalized by an outlease from the the right to remain in possession, Government. However, if in the opinion which has been established as herein- of the Division and District Engineer a after set forth, will be fully described reservation for possession in the offer in the correspondence forwarding the or deferral of order of possession is de- condemnation assembly to HQDA sirable in certain instances from a pub- (DAEN–REA–C) WASH DC 20314. The lic relations standpoint or for other retention of possession without pay- compelling reasons, such cases will be ment of rent is directed to the benefit forwarded to HQDA (DAEN–REA) of the occupant of the property with WASH DC 20314 for consideration. some property maintenance consider- (vi) The reservation of use and occu- ation to the Government. This proce- pancy in the vendor and/or tenant dure will not be used to permit non-oc- under the terms of the offer or cupant owners a means of retaining deferment of possession must be based possession without payment of rent on adequate consideration to the Gov- and at the same time collect cash rents ernment. It is anticipated, however, or unreserved crop rents from tenants. that items such as the vendor’s main- (iii) When the land being acquired is tenance of the land, buildings, and utilized by the owner and/or tenant for structures, his protection of the prop- agricultural or related purposes, a pe- erty against loss by fire, waste, or riod of possession may be allowed, if other causes, and the fact that his pos- consistent with project requirements, session can be revoked within a short to permit the crop owner to harvest period of time, will, in most instances,

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offset any rental for the period of the (3) The District Engineer, through reserved occupancy or deferred posses- channels, may request the Chief of En- sion which might otherwise be due. gineers to grant exceptions to this pol- However, if possession is reserved by icy where unusual circumstances war- the vendor in the acquisition of com- rant such consideration. In keeping mercial, industrial, and special use with the intent of this action, it is properties, or other type of property hoped that such cases will be minimal having a potentially high income fac- in number. tor, the fair rental value for the period (4) The following will apply with re- of reserved use or deferred possession spect to advance land acquisition proj- must be deducted from the agreed pur- ects. Former owners and tenants whose chase price. properties were acquired prior to August (vii) Special provisions for protection 1, 1972 will be allowed to remain on the of the Government, such as those ap- property by lease on a year-to-year pearing in ENG Form 1366, Department basis until the establishment of a land of the Army Lease—River and Harbor management use plan and thereafter, if or Flood Control Property, will be the property is available for leasing, added to the reservation clause in the for a single five-year term. Former owners and tenants whose properties offer in cases where, in the opinion of are acquired after August 1, 1972 will be the Division or District Engineer, they allowed to remain on the property by are necessary or desirable. If the case lease on a year-to-year basis until con- is not to be closed by direct purchase, struction commences: Provided, The the letter to the vendor notifying him property is available for leasing. After of the Goverment’s intention to file a construction commences, if the prop- declaration of taking will set forth the erty is not immediately required for fact that possession is to be deferred project purposes, such former owners and for what period, and will contain a or tenants will be allowed to remain on statement as to the Government’s ex- the property by lease for an additional pectation that the vendor will properly two years. Continued possession of maintain and protect the premises, and properties acquired after the date con- perform such other acts (or refrain struction commences will be governed from such acts) as deemed advisable by by the procedure outlined in paragraph the Division or District Engineer. Both (l)(1) of this section. the letter of notice and the reservation (m) Schools, Cemeteries, and Facilities clause in the offer will provide that the of State and Local Governments. ER 1180– right to possession may be revoked on 1–1, Section 73, provides for the discre- 30 days notice to the vendor. tionary relocation by the Chief of Engi- (2) It is recognized that farmers may neers of schools and other local govern- experience difficulty in finding sub- mental facilities, and acquisition of stitute farms needed for their liveli- the sites under section 111 of Pub. L. hood within one year, and other owners 85–500. Section 73 will be followed in and tenants may encounter difficulty the acquisition and relocation of ceme- in relocating within one year. There- teries. Where the school was formerly a fore, the District Engineer, as an ex- part of an abutting tract, offers for the ception to the procedure in paragraph abutting tracts will contain a clause (l)(1) of this section may lease prop- whereby the vendor or vendors agree to erties to former owners or tenants at quitclaim all right, title, and interest the fair market rental value for up to whether vested or reversionary, in and one additional year where the cir- to the school site in executing the deed cumstances justify such action, and, in to the United States. such event, the record will contain the (n) Reservations Prior to Completion of reasons justifying the action. Any oc- Offer. Where immediate possession of cupancy by the former owner or tenant areas is necessary and is obtained by beyond 12 months from the date the right-of-entry or the filing of con- property was acquired by the Govern- demnation proceedings, owners often ment will be covered by a lease and wish to move, taking with them build- will provide payment of the fair mar- ings and improvements, or wish to har- ket rental value of the property leased. vest timber or crops, prior to any offer

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