Welcome to the
International Right of Way
Association
Course 100
Principles of
Land Acquisition
1
100-PPT – Revision 2 – 02.27.2015.USA
Introductions
Who we are…
What we do…
Where we do it…
How long we’ve been doing it…
Our goals for the course...
2
Objectives (1)
At the conclusion of the four days,
you will be able to...
•
Define real property law terms and concepts.
Apply the terms and concepts to right of way
acquisition
• Discuss the effects of a public project on the
3
environment. Recognize some of the major U.S.
environmental acts. Explain the types of
environmental studies
Objectives (2)
At the conclusion of the four days,
you will be able to...
• Describe and demonstrate the three view
concept of engineering plans. Understand and
discuss the significance of property
descriptions and the difference types used
• Demonstrate a basic understanding of the
valuation process and the role of the appraiser
in the acquisition process
4
Objectives (3)
At the conclusion of the four days,
you will be able to...
• Discuss right of way negotiation, including its
various components from preparation to closing
• Express a basic understanding of the federal
laws related to the relocation of residential and
business occupants
• Express a basic understanding of property
management concepts
5
Housekeeping
6
Schedule
Day One and Day Two
7
(1)
8:00 - 8:30
Introductions, Etc.
8:30 - 12:00
Property Law Concepts
1:00 - 4:45
Environmental Concerns
8:15 - 12:00
Property Descriptions
1:00 - 4:45
Appraisal
Schedule
Day Three and Day Four
8:30 - 10:15
10:30 - 12:00
1:00 - 4:45
8:15 - 12:00
1:00 - 2:45
3:30 - 5:00
8
(2)
Appraisal
Negotiation
Negotiation
Relocation Assistance
Property Management
Exam
Property Law Concepts
9
Objectives
Property Law Concepts
• Define real property law terms
and concepts.
• Apply the terms and concepts to
right of way acquisition
10
Types of Laws
Civil law based on written codes or laws
Common law evolved from early
court decisions
11
Real Estate
Real estate is the physical land and
the objects that are permanently
affixed to the land.
12
Real Property (1)
Real property is all the rights,
interests and benefits inherent
in the ownership of the real estate.
It is the bundle of rights.
13
Real Property (2)
Real property is all
the rights, interests
and benefits
inherent in the
ownership of the
real estate. It is the
bundle of rights.
14
Personal Property
and Fixtures
Personal property is the items that are
not affixed to the real estate.
Fixtures are items that were once personal
property but have since been permanently
attached to the real estate.
15
Types of Ownership
Owners in Severalty
Concurrent Ownerships
Joint Tenancy
Tenancy by the Entirety
Tenancy in Common
Community Property
16
Contract (1)
A contract is an agreement
between parties, creating an
obligation for which the law
provides a remedy for breach.
17
Contract (2)
•
•
•
•
18
Mutual consent or agreement
Competent parties
Lawful consideration
Lawful subject matter
Estates
Fee simple estate
Life estate
Lease interests
(leased fee and leasehold)
Easements
19
Easement
An easement is a non-possessory
interest one has in the
property of another for a
specific purpose.
20
Easement Appurtenant
Easement Appurtenant
is an easement for the
benefit of another real
estate parcel.
“Runs with the land.”
21
Easement In Gross (1)
Easement In Gross
benefits a person
or entity, rather
than another real
estate parcel.
It may be personal
or commercial.
22
Transfer of Title
Deed or Grant
Descent and Distribution
(intestate succession)
Devise (will)
Eminent Domain
Occupancy/Adverse Possession
23
Usual Descent
1.
2.
3.
4.
5.
6.
7.
8.
24
Surviving spouse and children
Brothers and sisters
Parents
Aunts and uncles and nieces and nephews
Grandparents
Cousins
Second cousins, etc.
Escheat
Other “Rights”
Rights of Way
Profits a Prendre
Licenses/Permits
25
Environmental Concerns
26
Objectives
Environmental Concerns
• Discuss the effects of a public project
on the environment
• Recognize some of the major U.S.
environmental acts
27
• Explain the types of environmental
studies and what each type hopes
to achieve
Environment
Environment is the combination
of conditions that affect and
influence the growth, development
and survival of living things.
28
Environmental Legislation (1)
Rivers and Harbors Act
Clean Air Act
National Historic Preservation Act
National Environmental Policy Act
The Clean Air Act
Federal Water Pollution
Control Act Amendments
Endangered Species Act
29
Environmental Legislation (2)
Safe Drinking Water Act
Toxic Substance Control Act
Resource Conservation and Recovery Act
Federal Water Pollution Control Act
Comprehensive Environmental Response,
Compensation and Liability Act
Superfund Amendments and Reauthorization Act
Clean Water Act
30
Environmental Review
Assessment Processes
The environmental review is a review and
decision process for evaluating the impact
that actions will have on the environment.
An environmental assessment is an action to
determine and manage risks associated with
the acquisition of property that may
be environmentally impacted.
31
Day One Recap
Today we...
• Defined real property law terms and concepts.
Applied the terms and concepts to right of way
acquisition
• Discussed the effects of a public project on the
environment. Recognized some of the major
U.S. environmental acts. Explained the types of
environmental studies
32
Day Two
We will...
• Describe and demonstrate the three view
concept of engineering plans. Understand and
discuss the significance of property descriptions
and the difference types used
33
• Start to demonstrate a basic understanding of
the valuation process and the role of the
appraiser in the acquisition process
Property Descriptions
34
Objectives
Property Descriptions
• Describe and demonstrate the three
view concept of engineering plans.
• Understand and discuss the
significance of property descriptions
and the difference types used.
35
Three View Concept
Plan View
Profile View
Cross section View
36
Plan View (1)
37
Plan View (2)
38
Profile View
39
Cross Section View
40
Mason and Dixon
41
Public Land Survey System (1)
42
Public Land Survey System (2)
43
Public Land Survey System
44
(3)
Public Land Survey System (4)
45
Metes and Bounds
46
Bearings
2
1
4
47
3
Lot and Block
48
Centerline
49
Point
50
Appraisal
51
Objectives
Appraisal
• Demonstrate a basic understanding
of the valuation process and the role
of the appraiser in the acquisition
process
52
Appraisal
An appraisal is the act or process of developing
an opinion of value. An opinion of value.
An appraisal is a written statement … setting
forth an opinion of value … supported by the
presentation and analysis of relevant market
information.
53
D.U.S.T.
(Factors that create value)
Demand: The desire or need
for real estate.
Utility: Usefulness.
Scarcity: The supply of real estate
in relation to demand.
Transferability: Title must be able to pass.
54
Market Value
Market value is a type of value,
stated as an opinion, that presumes
the transfer of a property … as of
a certain date, under specific
conditions (… relationship, knowledge,
motivation, terms of sale, conditions of sale).
55
Value Principles
(Principle of Substitution)
When several similar goods
or services are available,
the one with the lowest
price will attract
the greatest demand.
56
Value Principles
(Principle of Supply and Demand)
The price of a good or service
varies directly with demand and
inversely with supply.
57
Value Principles
(Principle of Anticipation)
Present value is created by the
expectation of future benefits.
58
Value Principles
(Principle of Contribution)
The value of a particular component
is measured by its contributory value
to the property or the amount
of its absence detracts
from the whole.
59
Valuation Process
Appraisal Problem Definition
Scope of Work
Data Collection and Analysis
Land Value Opinion
Three Approaches to Value
Reconciliation and
Final Value Opinion
Defined Value Opinion Report
60
Highest and Best Use
The reasonably probable and legal use that is
physically possible, appropriately supported,
and financially feasible, and that results
in the highest value.
• Physically possible?
• Legally permissible?
• Financially feasible?
• Maximally productive?
61
Three Approaches to Value
• Cost Approach
• Sales Comparison
• Income Capitalization Approach
62
Cost Approach
• Develop a value opinion for the land
• Estimate the cost new of the improvement
• Deduct depreciation
• Add land value opinion to the depreciated
improvement value
63
Sales Comparison Approach
• Research the market for comparable data
• Develop relevant units of comparison
• Compare the sales to the subject and
adjust for dissimilarities
• Reconcile the value indications into
a final value opinion
64
Day Two
Today we...
• Described and demonstrated the three view
concept of engineering plans. Understood
better and discussed the significance of
property descriptions and the difference
types used.
• Started to demonstrate a basic understanding
of the valuation process and the role of the
appraiser in the acquisition process
65
Day Three
Today, we will...
• Finish discussing the valuation process
and the role of the appraiser in the
acquisition process
• Discuss right of way negotiation,
including its various components
from preparation to closing
66
Valuation Process
Appraisal Problem Definition
Scope of Work
Data Collection and Analysis
Land Value Opinion
Three Approaches to Value
Reconciliation and
Final Value Opinion
Defined Value Opinion Report
67
Income Capitalization Approach
The conversion of income into
value through a rate or a ratio.
• Gross rent multipliers
• Direct capitalization
68
Income Capitalization Approach
Gross Rent Multipliers
Gross Rent Multiplier = Sale Price
Gross Rent
69
Income Capitalization Approach
• Estimate the subject’s annual potential gross income
• Determine a vacancy and collection loss
• Subtract the vacancy and collection loss from the potential
gross income
• Estimate annual property expenses and subtract the
expenses from the effective gross income to arrive
at the net operating income
• Develop a capitalization rate
• Convert the net operating income into value
70
Income Capitalization Approach
Direct Capitalization
Value = Net Operating Income
Capitalization Rate
71
or Vo = NOI
Ro
Valuation Process
Appraisal Problem Definition
Scope of Work
Data Collection and Analysis
Land Value Opinion
Three Approaches to Value
Reconciliation and
Final Value Opinion
Defined Value Opinion Report
72
Partial Acquisitions (1)
Larger parcel is the total property
before the taking.
• Contiguity
• Title
• Use
Value of the part taken is determined by
multiplying the quantity taken times
the before unit value of the item
73
Partial Acquisitions (2)
Damages to the remainder property represent
the loss in value to the remainder property
as a result of a partial acquisition
Benefits to the remainder property represent
the increase in value to the remainder
property as a result of a partial acquisition
74
Partial Acquisitions (3)
Federal (Before and After) Rule is the
difference between the value before the
acquisition and the value after the acquisition
State (Summation) Rule is the value of the part
taken plus (damages to the remainder property
minus benefits to the remainder property
[the damages minus the benefits cannot
be less than zero dollars])
75
Negotiation
76
Objectives
Negotiation
Discuss right of way negotiation,
including its various components
from preparation to closing
77
Negotiation
… the process by which two
or more people resolve differences to
reach a mutually acceptable agreement.
78
Conditions Necessary...
Issues must be negotiable
Parties must be willing to negotiate
Parties must trust each other
79
Trust
Placing confidence in another,
based on that person’s character,
ability, strength or truthfulness
80
Roles
Agency
Property Owner
Taxpayer/Ratepayer
Acquisition Team
Problem Solver
Facilitator
Closer
81
Other
Types of Negotiation
Integrative
Bargaining
Attitudinal
Intra-agency
82
Integrative
“Win-Win”
Mutually beneficial outcomes
Inquiry
Collaborative
83
Bargaining
“Win-Lose”
“Zero-Sum”
Advocates positions
Compromise
84
Attitudinal
Trust
Common ground
Shared frame of reference
85
Intra-agency
Intra-organization
86
Characteristics (1)
Credibility
Expertness
Trustworthiness
Power/Dynamism
87
Power
88
Legitimate
Reward
Coercive
Reverent
Charismatic
Expertise
Situation
Information
Characteristics (2)
Courage
Empathy
Integrity/Ethics
Patience
89
The Funnel Technique
I. Information Getting
II. Information Giving
III. Problem Census
IV. Problem Solving
V. Closing
90
A Plan
Analyze
Develop
Optimize
Incorporate
“Rules”
BATNA
91
Day Three
Today we...
• Finished discussing the valuation
process and the role of the appraiser
in the acquisition process
• Discussed right of way negotiation,
including its various components from
preparation to closing
92
Day Four
Today, we will...
• Express a basic understanding of the
federal laws related to the relocation
of residential and business occupants
• Express a basic understanding of
property management concepts
• Review the course and take an exam
93
Relocation Assistance
94
Objectives
Relocation Assistance
• Express a basic understanding of the
federal laws related to the relocation
of residential and business occupants
95
Uniform Act Objectives
• Advisory assistance in locating
replacement housing and replacement
business sites
• Financial assistance to pay the cost of
relocating personal property and to help
those displaced to secure comparable
replacement housing
96
Residential Relocation Assistance
97
Advisory Assistance
Interview
Information
Inspection
Transportation
98
Timely written notice
Residential Relocation Assistance
99
Moving Expenses
Schedule Method
Actual Cost
Combination
100
Payment Options (1)
101
Payment Options (2)
102
Payment Options (3)
103
Payment Options (4)
104
Payment Options (5)
105
Payment Options (6)
106
Business Relocation Assistance
107
Advisory Assistance
Interview
Information
Assistance
Timely written notice
108
Business Relocation Assistance
109
Property Management
110
Objectives
Property Management
• Express a basic understanding
of property management concepts
111
Property Management
… the process of maintaining and
creating value in real property
consistent with the owner’s objectives.
112
Asset Management
Involves…
Fiscal Management
Physical Management
Administrative Management
113
Property/Asset
Management Goals
Meet agency expectations
Ensure performance
Improve capacity
Reduce vacancy
Increase revenue
Enhance value
Provide flexibility
114
Increase social/community benefits
Inventories
Complete Property Listing
General Information
Property Classifications
115
Objectives (1)
At this point, you are able to...
• Define real property law terms and concepts.
Apply the terms and concepts to right of way
acquisition
• Discuss the effects of a public project on the
environment. Recognize some of the major
U.S. environmental acts. Explain the types of
environmental studies
116
Objectives (2)
At this point, you are able to...
• Describe and demonstrate the three view
concept of engineering plans. Understand and
discuss the significance of property
descriptions and the difference types used
• Demonstrate a basic understanding of the
valuation process and the role of the appraiser
in the acquisition process
117
Objectives (3)
At this point, you are able to...
• Discuss right of way negotiation, including its
various components from preparation to closing
• Express a basic understanding of the federal
laws related to the relocation of residential and
business occupants
• Express a basic understanding of property
management concepts
118
Thank you!
119
100-PPT – Revision 2 – 04.15.2013.USA