Companion Guide to Video August 2012

www.fhwa.dot.gov/federal-aidessentials

One of the fundamental rules when acquiring 

private property for public purposes—according to 

the U.S. Constitution—is that the owner be paid 

just compensation.

The Uniform Relocation Assistance and Real 

Property Acquisition Policies Act of 1970, or The 

Uniform Act, defines how public agencies must 

proceed when acquiring the right-of-way for a 

Federal-aid project. The act addresses: 

• The valuation of the property 

• The presentation of the offer to acquire 

the property

• Relocation assistance and benefit

Your agency must follow the rules of the Uniform 

Act to avoid delaying the project or losing Federal 

funding.

Typically, acquiring agencies use a written 

appraisal to estimate a property's fair market value. 

Depending on the property or property rights 

acquired, there are several different appraisal 

formats. 

For example, the Short Form Appraisal is used to 

assess the value of a single-family residence when 

there are no complicating circumstances. 

An additional appraisal format, such as Detailed 

Appraisals, is used for high-value properties or 

complex acquisitions. 

Federal regulations allow an agency to waive an 

appraisal under certain circumstances. For 

example, when the acquisition is uncomplicated 

and the anticipated fair market value is $10,000 or 

less.

Right-of-Way

Uniform Act

Valuation

In acquiring property for project right-of-way, the property’s fair 

market value must be determined as the basis for just 

compensation
Federal-aid Essentials for Local Public Agencies

Let's review how an agency uses an 

appraisal to determine just 

compensation and the various roles 

and responsibilities in that process.

The first step in the appraisal process is to define 

the appraisal problem and select the most 

appropriate appraisal format for each parcel. Your 

agency will want to ask questions to help clarify

the rights you are acquiring. For example:

• Will you require temporary construction 

easements, permanent easements, or 

ownership of the land or land rights?

• Does the project require the acquisition of 

an entire property, known as a parcel, or 

just a part of it?

• Do you anticipate damages?

• Will you acquire trade fixtures or 

equipment as real property?

Once you define the appraisal problem, a 

qualified, independent, and impartial appraiser can 

start to develop a property appraisal.

The appraiser contacts the property owner and 

offers the owner the opportunity to participate in 

the inspection. Afterward, the appraiser develops 

the appraisal report using an accepted industry 

approach—such as sales comparisons, income or 

cost approach. 

All appraisals must be independently reviewed for 

fairness and consistency by a second appraiser to 

ensure that they meet all the standards specified in 

the regulations. 

Once the agency accepts the appraisal, its 

representation of fair market value becomes the 

basis for just compensation. It is your agency's 

responsibility to determine what it believes is just 

compensation, but it must equal or exceed fair 

market value.

Now, let’s see how these steps work 

in practice. 

Our example involves the widening of a one-mile 

stretch of a city street. The project will affect 

several different properties, one of which is a 

single-family residence owned and occupied by the 

Garcia family. 

While defining the appraisal problem, the agency 

realizes it needs to acquire the entire parcel, which 

includes the family residence. Because the 

property is too valuable to qualify for a waiver, the 

agency determines the Short Form Appraisal is 

most appropriate and uses an appraiser who is 

experienced in these assignments.

The appraiser contacts the Garcias and schedules 

an inspection date. In his appraisal he relies on the 

sales approach to determine the value of the 

property and compiles comparable properties. The 

prices of comparable properties, observations and 

photos taken during the inspection, and other 

supporting information are used to support his 

opinion on the home's fair market value.
Federal-aid Essentials for Local Public Agencies

The agency then assigns a second appraiser to 

review the appraisal. The review appraiser makes 

no recommendations for revisions or corrections 

and agrees with the findings. 

The agency accepts the appraisal and uses it as 

the base for establishing just compensation.

As we have just seen, it's your agency's 

responsibility to accurately define the appraisal 

problem and ensure an appraisal is completed and 

independently reviewed. Your agency must be 

especially sensitive to procedures related to 

separation of duties between the appraiser and 

the review appraiser.

Your State department of 

transportation—the DOT— provides 

guidance through its right-of-way 

procedures manual and is 

responsible for the oversight of your 

agency’s program. 

The staff in the State DOT right-of-way office can 

assist your agency with following property appraisal 

rules for Federal-aid projects and may provide a list 

of qualified appraisers. 
Federal-aid Essentials for Local Public Agencies

The content of this 

document is not a 

substitute for 

information obtained 

from State departments 

of transportation, 

appropriate FHWA 

Division Offices, and 

applicable laws. 

Scenarios have been 

simplified for emphasis 

and do not necessarily 

reflect the actual range of 

requirements applicable 

to the scenario or this 

topic. This document

was created under 

contract number

DTFH61-11-D-00025 by 

the Federal Highway 

Administration, U.S. 

Department of 

Transportation, and is 

offered to the public to 

heighten and focus 

awareness of Federal-aid 

requirements within the 

local public agencies 

community and 

reinforces the 

importance of these 

necessary policies, 

procedures, and 

practices.

This companion resource 

is the script content for 

the video production of 

the same name. 

Web Resources

• FHWA guidance and additional links for Federal-aid right-of-way program 

requirements

http://www.fhwa.dot.gov/realestate/lpaguide/index.htm

• L A resource for property owners and occupants, transportation 

professionals, and highway right-of-way professionals 

http://www.fhwa.dot.gov/realestate/index.htm

• Frequently asked question on the Uniform Act

http://www.fhwa.dot.gov/realestate/ua/uafaqs.htm

• FHWA rules and procedures for Federal-aid right-of-way acquisition and 

property management.

http://www.access.gpo.gov/nara/cfr/waisidx_11/23cfr710_11.html

• U.S. DOT rules for the procedures used to obtain right-of-way on Federalaid projects

http://www.ecfr.gov/cgi/t/text/textidx?c=ecfr&sid=3bdda26e1102fe42dd21611091c4a569&rgn=div5&view=tex

t&node=49:1.0.1.1.18&idno=49