Chapter 13 — Right of Way

42 USC §4601 et seq., 49 CFR 24, and the safeguard purpose

The intent of Ch 13 is to provide LPAs with basic understanding of R/W procedures for locally sponsored Federal-aid transportation projects. LPAs actively involved in R/W acquisition and relocation must comply with the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 as amended in 1987 (the Uniform Act). The law is in Chapter 10 of the Caltrans Right of Way Manual, FHWA Project Development Guide (Appendices A and B), and 49 CFR 24.

Authority comes from the Fifth and Fourteenth Amendments to the U.S. Constitution and Article I of the California Constitution — providing that private property must not be taken without just compensation. The Uniform Act (42 USC §4601 et seq.) provides the rules and processes for exercising that authority on federally-funded projects. Affected property owners and those displaced are entitled to fair, equitable, and consistent treatment and due process to determine compensation.

Additionally, LPAs must comply with all Title VI of the 1964 Civil Rights Act requirements on Federal-aid projects. R/W activities must be administered without regard to race, color, gender, or national origin (FHWA PDG Appendix C-12). See Ch 9 §9.2 for LPA Title VI Implementation.

Note on documentation: All documents and papers related to a project must carry the Federal-aid project number for identification.

The Caltrans Right of Way Manual is used for SHS projects. ~575 forms and exhibits available; 17 chapters of R/W processes. Available to all LPAs at https://dot.ca.gov/programs/right-of-way/right-of-way-manual.

FHWA delegations, Caltrans monitoring, LPA qualification levels

FHWA delegations to Caltrans under 23 USC §106(c) and the FHWA/Caltrans Joint Stewardship and Oversight Agreement (S&O). Caltrans has passed these delegations to LPAs to the greatest extent possible.

FHWA Role (§13.2.1)

FHWA is responsible for:

• Obligation of federal funds
• Approval of E-76 for R/W activities and utilities under the Alternate Procedure
• Approval of Early Acquisition, Protective Buying, or Hardship Acquisition
• Approval of all R/W Certification Level 3/3W projects

Caltrans Role (§13.2.2)

Caltrans monitors LPA procedures for R/W appraisal, acquisition, relocation assistance, property management, excess land disposal, and utility relocations. Monitoring done by District R/W Local Programs Coordinator. Spot-check monitoring normally ≤25% of total work performed.

Monitoring findings classified as either:

• Violations of good business practice — no penalty; LPA free to adopt suggested changes
• Violations where correction is mandatory — LPA expected to change practices; failure may jeopardize qualification status, federal reimbursement may be withheld during corrective action, failure to complete corrective actions may result in withdrawal of federal funding

Note: For projects where real-time reviews have not been performed, acceptance of R/W Certification will be delayed until those reviews are completed.

LPA Qualification Levels

Caltrans qualifies LPAs in advance to perform some or all R/W activities, based on staff size, technical work capability, and reviews. Three levels:

Qualification term: 3 years (Levels 1, 2, 3). Review required at end of term. It is the LPA's responsibility to ensure they renew their qualification with Caltrans prior to expiration and that their qualification is active during the entire term of a project's R/W phase.

Qualification status can be withdrawn if deficiencies are found and not corrected, or if staffing/experience levels change. LPAs must inform Caltrans of major personnel changes.

Non-qualified LPAs may: (a) contract with a qualified LPA, (b) contract with private consultant(s) for one or more R/W specialties (Appraisals, Appraisal Review, Acquisitions, or Relocation Assistance), (c) contract with R/W Project Management consultant, (d) mix LPA staff and external resources, (e) contract with a Turnkey consultant who performs all R/W functions.

Consultant Selection for R/W follows LAPM Ch 10 plus Exhibit 13-C: Consultant Selection Criteria and Guide. LPA retains ultimate responsibility — including signing R/W Certifications.

Two contract methods:

• Project-by-Project — one project or extensive project >36 months. All four payment methods from Ch 10 suitable
• Time-Base — multiple simultaneous projects. Maximum contract length: 36 months. Extension once max 12 months if Exhibit 12-F submitted to DLAE with justification. Lump Sum not appropriate with time-base method

Appraisal Review Qualification: consultant review appraiser must have valid CA general license from Department of Consumer Affairs – Bureau of Real Estate Appraisers (BREA). Per 49 CFR 24.104, formal appraisal review necessary to establish Fair Market Value.

Only the LPA can determine the just compensation to be paid. Another agency or consultant cannot do so.

PSA + E-76 authorization for each phase/function

Master Agreement required with the LPA whenever federal funds are used. Normally processed once at the LPA's first Federal-aid project; updated and re-executed occasionally for changes in laws/policies.

Program Supplement Agreement (PSA) supplements the Master Agreement; formalizes financial responsibilities for each specific Federal-aid funded project. PSA identifies reimbursable phases, types and amounts of federal/local funds, contractual basis for state reimbursement to LPA.

Before requesting R/W Authorization

When federal funds will be used for R/W costs, obtain before requesting authorization:

• Exhibit 7-B Field Review Form
• Completed R/W estimate
• NEPA approval
• NEPA/CEQA Re-Validation Form (if applicable)

If any R/W activities are performed prior to authorization, those activities are normally ineligible for reimbursement later.

E-76 by Phase and Function (§13.4.3)

Each phase (capital/support) or function (appraisal, acquisition, utility relocation, property management, or excess land sales) of R/W claimed for reimbursement must be programmed and authorized by an E-76 prior to beginning that phase or function. An E-76 may program multiple phases. Work done prior to authorization is ineligible.

LPAs may not proceed with final design, R/W acquisition, or construction until full NEPA compliance has been documented and approved by Caltrans. Failure to follow makes the project ineligible for FHWA reimbursement.

Preliminary acquisition activities (title search, preliminary property map preparation) necessary for the environmental process can be advanced under preliminary engineering prior to NEPA compliance. Other work involving contact with affected property owners must normally be deferred until NEPA approval, except as provided in 23 CFR 710.503 (protective buying and hardship acquisition) and 23 CFR 710.501 (early acquisition).

PERW Checklist (Exhibit 13-E), NEPA gates, R/W Estimate, Hardship/Protection

Preliminary Studies. Crucial to correctly evaluate project requirements: limits, location (including existing utilities), scope, costs, and whether additional R/W will be required.

Field Reviews are not required on LPA transportation projects off the NHS (see Ch 7). Suggested practice for all complex projects. FHWA RBI projects: consult FHWA and Caltrans R/W via DLAE. LPAs complete Exhibit 6-A PES and first two pages of Field Review Form before requesting a Field Review.

Preliminary Engineering R/W (PERW) Checklist — Exhibit 13-E must be completed during preliminary studies in conjunction with Exhibit 6-A PES, and submitted to the DLAE. DLAE forwards to District R/W Local Programs Coordinator. Required with or without a project field review. Purpose: help LPAs and consultants determine if there are R/W involvements (fee/temporary acquisitions, utility conflicts, relocations) at project initiation stage.

NEPA Compliance (§13.6)

All LPA Federal-aid transportation projects off the SHS must comply with NEPA (23 CFR 771). LPAs may not proceed with final design, R/W acquisition, or construction until NEPA compliance is documented and approved by Caltrans.

Three NEPA Classes of Action: Categorical Exclusion (CE), Environmental Assessment (EA), or Environmental Impact Statement (EIS). Public hearings required for EA projects when significant R/W will be required, and during circulation of all Draft EISs.

R/W Estimate (§13.7.1)

Detailed analysis of:

• Type of properties to be acquired
• Size and number of parcels
• Nature of displacement (residential/commercial), how many affected, projected timing
• Time and personnel to appraise/acquire and perform any necessary relocation work

Estimate for utility relocation liability includes estimated FMV, anticipated relocation assistance payments, portion of LPA's liability to relocate utility facilities outside R/W.

Advance Acquisition / Hardship / Protection (§13.7.2)

Hardship acquisitions = unusual circumstances befallen the owner aggravated by the proposed project, which cannot be solved without LPA acquisition. Protection acquisitions = property purchased in advance of normal acquisition to prevent development on a proposed alignment. Deferral would result in higher costs.

LPAs may acquire hardship and protection properties with their own funds prior to NEPA compliance without jeopardizing federal participation in future programmed project costs. Prior FHWA approval required; acquisition must comply with the Uniform Act if reimbursement is anticipated. Per 23 CFR 710.503 (protective buying/hardship) and 23 CFR 710.501 (early acquisition).

$15K Waiver Valuation, $500K Dual Appraisal, Separation of Functions

Uniform Act basic requirements apply to all Federal-aid projects (49 CFR 24.102, .103, .104).

Before commencing appraisal: notice of decision to appraise (written) — covers the specific area being considered for public use, fact that owner's property lies within project area, and identification of the portion to be acquired. Must offer owner (or representative) opportunity to accompany appraiser on inspection with reasonable advance notice. Owner given Your Property, Your Transportation Project brochure (satisfies the agency's land acquisition procedures explanation requirement). Title VI brochures also sent.

All real property rights (temporary and permanent) must be appraised. Acquiring agency must establish an amount it believes to be just compensation (49 CFR 24.102) before initiation of negotiations. Fair Market Value is the basis for just compensation; the two may differ for unusual circumstances.

Appraisal Review (§13.8.1)

On Federal-aid projects, a formal review of the appraisal is necessary (49 CFR 24.104). Private sector review appraisers must have valid CA license from OREA (BREA holds that public agency employee appraisers and review appraisers do NOT need such a license). Review appraiser must determine appraisal meets applicable requirements and make corrections.

Appraisal Waiver Valuation (§13.8.2)

Separation of Appraisal and Acquisition Functions (§13.8.3)

LPAs should maintain separation of appraisal and acquisition functions. Exception: the same person can appraise and acquire a parcel if the total valuation excluding non-substantial construction contract work is $15,000 or less (49 CFR 24.102(n)(3)). This dollar limit applies to appraisal revisions where the appraiser was previously assigned to negotiate the parcel. The valuation document can be either an appraisal or Waiver Valuation.

When the same person appraises and acquires: appraisal must contain a statement substantially as follows: "I understand that I may be assigned as the Acquisition Agent for one or more parcels contained in this report, but this has not affected my professional judgment or influenced my opinion of value."

All railroad properties must be valued in the full, narrative format. Non-complex Valuation ($15K or less) and Determination of Just Compensation (waiver of appraisal) formats must not be used. Railroad parcels not eligible for one-agent appraise/acquire process — including TCEs from railroad.

Dual Appraisal Report (§13.8.4)

Caltrans policy no longer requires dual appraisal reports. LPAs may determine dual report needed. Dual appraisal reports should be considered for unusually large or complicated parcels or parcels exceeding $500,000 in value (includes improvements pertaining to realty, severance damages, construction contract work).

Consider dual appraisal when: serious question on highest and best use; market data inconclusive (scarcity, absence of established patterns); substantial non-conforming improvements; significant severance damages; primarily development-analysis approach.

Dual appraisals must be separate and fully independent in calculations, analysis, and conclusions.

Owner Initiated Appraisals (§13.8.5)

Per Cal Code of Civil Procedure §1263.025(a): public entity must offer, in writing, to pay the reasonable costs, not to exceed $5,000, of an independent appraisal ordered by the owner of property the public entity offers to purchase under threat of eminent domain. Appraiser must be BREA-licensed.

Just compensation, 90-day notice, Title VI clauses, condemnation, relocation

Prior to initiating negotiations: establish an amount believed to be just compensation; make a written offer to the owner(s). In no event less than the agency's approved appraisal of FMV. Agency should make every effort to acquire by negotiation.

Increase or decrease in property value before date of valuation caused by the project must be disregarded in determining compensation.

All property owners must be provided a copy of the approved appraisal and Appraisal Summary Statement or Valuation Summary Statement.

If private consultant is used in acquisition phase: must have valid CA Real Estate Broker's license, or Salesperson's license if supervised by licensed Real Estate Broker. All R/W Contracts must be approved for content and signed/initialed by Real Estate Broker or Principal.

General Uniform Act Requirements (90-day notice rule)

• All real property rights (temporary and permanent) must be appraised; agency must establish just compensation (49 CFR 24.102) before initiation of negotiations
• Written offer must be made promptly in full amount of appraisal with summary of its basis
• At least 90-day written notice must be given to all lawful occupants per 49 CFR 24.203(c)
• Owner's incidental escrow cost must be paid
• A written (parcel) diary must be maintained

Title VI Clauses Required in R/W Contracts

Condemnation/Eminent Domain (§13.9.3)

Public agencies may condemn private property provided that the governing body (Board of Supervisors or City Council) adopts a Resolution of Necessity at a public hearing. Owner(s) must be provided advance notice; have right to appear and contest adoption. Process detailed in Chapter 9 of Caltrans Right of Way Manual.

Relocation Assistance (§13.9.4)

Per Uniform Act requirements at 49 CFR 24 Subparts C, D, and E and Caltrans R/W Manual Ch 10. Relocation Assistance ensures fair and equitable treatment of displaced persons. FHWA brochures: Your Rights and Benefits as a Displaced Person. Detailed benefits summary in Exhibit 13-D: Uniform Relocation Act Benefits Summary.

Property Management (§13.9.5)

Per 23 CFR 710. Federal funds may cover net costs in leasing, rental, maintenance, disposal of improvements, and clearance. Upon acquisition, Exhibit 13-F: Local Public Agency Real Property Services Checklist must be completed and kept in file. Private consultant providing property management must have valid CA Real Estate Broker's license and minimum 2 years' experience at working level in rental property management.

Excess Lands (§13.9.6)

Per 23 CFR 710 and 771. FHWA no longer requires reimbursement of federal share of proceeds from sale of excess real property. LPAs must use these funds for subsequent Title 23 USC eligible projects. LPAs may create a dedicated Title 23 account (per 23 CFR 710.403(e)).

Per Caltrans DLA policy, excess exchange or sale transaction must occur within 2 years after opening the roadway to traffic, or within 2 years after submitting the final voucher to FHWA (whichever is earlier).

Four levels of certification — and the time/age requirements

R/W Certification documents that interests necessary for the project have been or are being secured, and that physical obstructions (buildings, utilities, railroads) have been or will be removed, relocated, or protected. Per 23 CFR 635.309.

Submitted with signature of person authorized to sign for LPA. Signing authority is granted by a Resolution passed by the City Council or County Board of Supervisors, naming the person or position authorized to sign. Copy of Resolution submitted to Caltrans Local Assistance R/W staff along with signed Certification.

Two cert forms: Exhibit 13-A Short Form R/W Certification (for projects with no R/W acquisition, no relocation, no railroad, only utility cover adjustments) and Exhibit 13-B Full R/W Certification. FHWA-required wording — changes could invalidate certification.

Conditional Certification No. 3 — the 9-item justification

May only be used in an exceptional circumstance, on a very limited basis, with full written justification. At minimum, justification must include:

1. Outline of the very unusual circumstances requiring early advertisement
2. Statement how/why it is believed to be in the public's interest
3. Statement that Resolution of Necessity approved on all parcels yet to be acquired
4. Reason why Certification No. 1 or No. 2 is not possible
5. Anticipated actual dates when legal possession and physical occupancy will be obtained, with substantiation
6. Statement that all remaining residential occupants have had replacement housing made available
7. Statement assuring occupants of residences/businesses/farms/nonprofits in R/W are protected against unnecessary inconvenience and disproportionate injury
8. Identification of each parcel where legal possession/right of occupancy has not been obtained
9. Bids cannot be opened until Conditional Cert No. 3 is upgraded to Cert No. 1 or 2

Special Certification No. 3 with a Work-Around (3W)

May be used only in the most extraordinary circumstances. LPA must show critical need to advertise and award the project with detailed extraordinary circumstances. Requires Caltrans HQ R/W & Land Surveys (HQ RW&LS) and FHWA approval in advance.

The 3W allows physical construction to commence while occupants of businesses, farms, or nonprofit organizations remain within the R/W. All occupants of residences must have had replacement housing made available to them per the Uniform Act.

Time Requirements (§13.10.2)

Under ideal conditions, a Certification No. 1 would be completed for each project at the PS&E stage. When project advances with Conditional No. 3: Upgraded Certification No. 1 or No. 2 must be received by the DLAE a minimum of 15 working days prior to bid opening date.

For Special Certification No. 3W: Updated Special Certification No. 3W must be provided to DLAE no later than 15 working days prior to bid opening. The 3W does NOT need to be raised to Cert 1 or 2, but must be updated to provide progress on work-around parcel(s).

Age of R/W Certifications (§13.10.3)

R/W Certifications must be updated:

• When the Certification is 1 year old and the project has yet to be advertised
• At the request of the Project Manager or Project Engineer
• When dates or anticipated actions are no longer consistent with current date of the Certification
• When there are any changes in project scope or R/W requirements
• When the project description is no longer consistent with the PS&E

Additionally, the NEPA must be re-evaluated if older than 3 years from the time the LPA submits the R/W Certification.

Emergency openings, record retention, FROE within 6 months

Emergency Opening (§13.11)

Emergencies require rapid response. R/W Certification for Emergency Opening (EO) work is not required until after the roadway is opened. Upon FHWA approval of the Damage Assessment Form (DAF), actions to advertise, award, administer ER projects may proceed without going through usual R/W steps. EO work performed outside existing LPA R/W is extremely rare.

After facility reopened: emergency actions reviewed for R/W implications. If persons or properties affected during emergency repair phase (even temporarily): appropriate steps to ensure Uniform Act compliance — may include appraisal, purchase, or relocation assistance. R/W Certification meeting Level 1 requirements prepared and submitted to DLAE.

Permanent Restoration (PR) work follows standard Federal-aid process — requires complete R/W certification prior to processing construction E-76.

Record Retention (23 CFR 710.201(e))

The acquiring agency must maintain adequate records of its acquisition and property management activities:

1. Acquisition records (including records related to owner/tenant displacements) and property inventories of improvements acquired must be in sufficient detail to demonstrate compliance with 23 CFR 710 and 49 CFR 24. Records retained at least 3 years from later of: (a) date SDOT or grantee receives Federal reimbursement of final payment to each owner and each displaced person; or (b) date of reimbursement for early acquisitions or credit toward State share approved under §710.501
2. Property management records include inventories of real property interests considered excess to project/program needs, plus all authorized R/W use agreements for property acquired with Title 23 funds or incorporated into a Title 23-funded project

Per 2 CFR 200.334(c): records must be kept until agency disposal of the facility. Records are subject to Public Records Act requests at any time; highly recommended to keep records digitally or otherwise beyond the 3-year minimum.

Final Report of R/W Expenditures (§13.12.1)

When project is complete, summary of progress payments submitted on a Final Report of Right of Way Expenditures, Form FM 1592A (see Exhibit 17-K). Submitted when final R/W costs are known to expedite audit and reimbursement.

Federal Policies on R/W Cost Reimbursement (§13.12.2)

Acquisitions: federal participation requires prior FHWA E-76 authorization. Initiation of acquisition (first written offer) cannot begin until E-76 has been approved by FHWA. 23 CFR 710.203(a)(3) lists preliminary acquisition activities that can occur under PE phase.

Three parcel types:

• Core Parcel — acquired in its entirety (full acquisition) whether or not it lies entirely within proposed R/W
• Excess Parcel — portion not within R/W lines but acquired anyway (uneconomic remnants, replacement property exchanges). Some acquisition costs may be eligible under 23 CFR 710.203(b)(7)
• Non-Core Parcel — partial acquisition leaving the grantor with an adjacent remainder

Condemnation Deposits and Interest: deposits in court are reimbursable. Interest payments reimbursable only in specified situations. For example, FHWA participates in interest for ≤45 days if court procedures result in owner not being able to withdraw a deposit made in support of an Order for Possession.

Klopping Damages (frustrated development rights) are always ineligible. Only damages eligible are those created by before-and-after values to remaining property.

Goodwill awards/settlements: loss of goodwill, interest on goodwill, defendant's costs in goodwill action — all now eligible. Costs to appraise goodwill and/or try goodwill action also eligible.

Defendant's Costs: federal participation NOT allowed when LPA, found noncompliant, is ordered to pay property owner's attorney fees, appraiser fees, expert witness fees, or similar.

Utility Relocation reimbursement requires: E-76 for PE-Utility before any preliminary utility design; E-76 for Utility Alternate Procedure with list of every utility company's facility and best available cost estimate before relocation work; FHWA Specific Authorization (Exhibit 14-C) for each utility relocation listed on E-76 before any relocation construction; FHWA Approval of Utility Agreement before reimbursement requested.