GSA Public Buildings Service

Real Property

ACQUISITION

Handbook

How the U.S. General Services 

Administration Acquires Real Property 

for Programs and Projects

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Table of Contents

Introduction 2

CommonT erms Used in Acquiring Real Property 3

Property Appraisal and the Determination of Just Compensation 6

Negotiations 9

Settlement and Condemnation 12

Project Contacts 13

GSA Public Buildings Service | 1
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Federal programs designed to 

benefit the public may result 

in the acquisition of private 

property and sometimes in the 

displacement of people from 

their residences, places of 

business or farms. 

The Fifth Amendment to the United States 

Constitution provides that private property may 

not be taken for public use without the payment 

of just compensation. To provide uniform and 

equitable treatment of persons whose property 

is acquired for public use, Congress passed 

the Uniform Relocation Assistance and Real 

Property Acquisition Policies Act of 1970, 

and amended it in 1987. The law is commonly 

referred to as the Uniform Act. Implementing 

regulations for the Uniform Act are issued 

by the Department of Transportation and can 

be found in part 24 of title 49 of the Code of 

Federal Regulations. All Federal, state and 

local government agencies, as well as others 

receiving Federal financial assistance for 

public programs and projects that require the 

acquisition of real property, must comply with 

the policies and provisions set forth in the 

Uniform Act.

The acquisition itself does not need to be 

Federally funded for the Uniform Act to apply. 

If Federal funds are used in any phase of the 

program or project, the rules and regulations of 

the Uniform Act apply.

The Uniform Act requires acquiring agencies 

to make “every reasonable effort to acquire 

expeditiously real property by negotiation.” 42 

U.S.C. § 4651. The objective is to encourage 

agreements with property owners to minimize 

litigation and promote public confidence in 

Federal and federally assisted land acquisition 

programs. 

This brochure explains the rights of an owner 

of real property to be acquired for a federally 

funded program or project. An accompanying 

brochure, entitled “Relocation Handbook,” 

explains the rights and benefits of a displaced 

person under the Federal Relocation Assistance 

Program.
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Common Terms 

Used in Acquiring Real Property

ACQUISITION

Acquisition is the process of gaining ownership 

or control of real property (real estate) or an 

interest in real property.

AGENCY

An agency can be a governmental organization 

(Federal, state or local), a nongovernmental 

organization (such as a utility company), 

or a private person, using Federal financial 

assistance for a program or project that 

acquires real property or displaces a 

person. (All references to “Agency” in this 

brochure refer to the U.S. General Services 

Administration (GSA).)

APPRAISAL

An appraisal is a written statement prepared 

independently and impartially by a qualified 

appraiser setting forth an opinion of defined 

value of an adequately described property as of 

a specific date, supported by the presentation 

and analysis of relevant market information.

CONDEMNATION

Condemnation is the legal process of acquiring 

private property for public use or purpose 

through the government’s power of eminent 

domain. Condemnation usually is not used until 

all attempts to reach a mutually satisfactory 

agreement through negotiations have failed. An 

agency then goes to court to acquire the needed 

property.

EASEMENT

An easement is an interest in real property that 

affords a person the right to make limited use 

of another person’s real property. An easement 

may be exclusive or non-exclusive and may 

be perpetual or expressly limited in duration. 

Examples of easements are (1) a right-of-way, 

(2) a right of entry for a stated purpose, (3) a 

right to the support of land and buildings, (4) a 

right of light and air, (5) a right to place or keep 

utilities on another person’s property, (6) a 

right to the perpetual maintenance of drainage 

structures, (7) a right to allow reconstruction of 

a driveway during construction, and (8) a right 

to do some act that would otherwise constitute 

a nuisance.

“ The Fifth Amendment of the 

Constitution states that private 

property shall not be taken for 

public use without the payment 

of just compensation.” 
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Common Terms Used in Acquiring Real Property

EMINENT DOMAIN

Eminent domain is the right of the government 

to take private property for public use. In the 

United States, just compensation must be paid 

for private property acquired in connection with 

federally funded programs or projects.

FAIR MARKET VALUE

Fair market value is the price on the date of 

valuation that a property would change hands 

between a willing buyer and a willing seller, 

neither being under any compulsion to buy or to 

sell and both having reasonable knowledge of 

relevant facts.

INTEREST

An interest is a right, title or legal share in 

something. People who share in the ownership 

of real property have an interest in the property.

INVERSE CONDEMNATION

Inverse condemnation is a term used to 

describe a situation in which the government 

takes private property but fails to pay the 

compensation required by the Fifth Amendment 

to the U.S. Constitution. To be compensated, the 

owner must then sue the government.

JUST COMPENSATION

Just compensation is the price an agency must 

pay to acquire real property. An agency official 

must make the estimate of just compensation 

to be offered for the property, which amount 

may not be less than the amount established 

in the approved appraisal report as the fair 

market value for the property. If the owner 

and GSA cannot agree on the amount of just 

compensation, the amount will be determined 

in court. 

LIEN

A lien is a legal claim of one person upon 

the property of another person to secure 

the payment of a debt or the satisfaction of 

an obligation. Examples include mortgages, 

mechanics’ liens and tax liens. As a general 

rule, liens must be paid in full when the property 

is sold.

MARKET VALUE

Market value is the sales price that a willing and 

informed buyer would pay in cash to a willing 

and informed seller for a particular property.

NEGOTIATION

Negotiation is the act of discussing an issue 

between two or more parties with competing 

interests with an aim of coming to an agreement. 

It is the process by which GSA and the seller of 

property seek to reach an amicable agreement 

over the terms and conditions of the sale of 

property. An offer may be made for the purchase 

of property in person or by mail, and the offer is 

discussed with the owner.

PERSON

A person is an individual, family, partnership, 

corporation, or association.

PERSONAL PROPERTY

In general, personal property is property that 

can be moved. It is not permanently attached to, 

nor a part of, the real property. Personal property 

is not to be included and valued in appraising 

real property.
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PROGRAM OR PROJECT

A program or project is any activity or series 

of activities undertaken by an agency where 

Federal financial assistance is used in any 

phase of the activity.

UNECONOMIC REMNANT

A parcel of real property in which the owner is 

left with an interest after the partial acquisition 

of the owner’s property, and which the agency 

has determined has little or no value or utility to 

the owner. 

WAIVER VALUATION

The valuation process used and product 

produced when the agency determines that an 

appraisal is not required. A waiver valuation may 

be used for relatively low-value, non-complex 

acquisitions. A waiver valuation is prepared 

instead of an appraisal.

“ An agency official must 

make the estimate of 

just compensation 

to be offered for the 

property, which amount 

may not be less than the 

amount established in 

the approved appraisal 

report as the fair market 

value for the property.”
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Property Appraisal and the 

Determination of Just Compensation

PROPERTY APPRAISAL

The U.S. General Services Administration 

(GSA) determines the specific property to 

be acquired for a public program or project 

after the project has been planned and 

the government requirements have been 

established. 

If a property, or a portion of it, needs to be 

acquired, the primary owner will be notified as 

soon as possible of:

(1) GSA’s interest in acquiring the property;

(2) GSA’s obligation to obtain any 

necessary appraisals; and

(3) Any other useful information. 

When GSA begins the acquisition process, the 

first personal contact with the property owner 

should be no later than during the appraisal of 

the property. 

An appraiser will contact the property owner 

to make an appointment to inspect his or her 

property. The appraiser is responsible for 

determining the initial fair market value of the 

property. GSA will have a review appraiser 

analyze the appraisal report and recommend 

whether or not the agency should accept the 

report.T he accepted appraisal report will 

become the basis for the agency’s offer of just 

compensation for the property.T he property 

owner, or a representative designated by the 

property owner, will be invited to accompany 

the appraiser when the appraiser inspects 

the property.T he property owner, or his or 

her representative, may point out any unusual 

or hidden features of the property that the 

appraiser might overlook. At this time, the 

property owner should advise the appraiser if 

any of these conditions exist:

• Other persons who have an ownership or 

other interest in the property, whether 

or not of record;

• Tenants on the property;

• Items of real or personal property located 

on the property that belong to another 

person; or

• Presence of hazardous materials, 

underground storage or utilities.

This is the owner’s opportunity to tell the 

appraiser about anything relevant to the 

property’s valuation, including other properties 

in the area that have sold recently.

The appraiser will inspect the property and 

note its physical characteristics. He or she will 

review sales of properties similar to the subject 

property to compare the facts of those sales 

with the facts about the property. The appraiser 

will analyze all elements that affect value. 

The appraiser must consider any normal 

depreciation and physical deterioration that 

have taken place. By law, the appraiser must 

disregard the influence of the future public 

project on the value of the property. This 

requirement may be partially responsible for any 

difference in the fair market value and market 

value of the subject property.

The appraisal report will describe the property, 

and GSA will determine a value based on 

the condition of the property as of the day the 
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appraiser last inspected it compared with other 

similar properties that have sold.

Once the appraisal of fair market value is 

complete, a review appraiser from GSA will 

review the report to confirm that all applicable 

appraisal standards and requirements have 

been met. The GSA review appraiser will then 

determine the amount of just compensation to 

be offered for the real property.T his amount 

will never be less than the fair market value 

established by the approved appraisal. 

If GSA is acquiring only a portion of the 

property, there may be damages or ancillary 

benefits to the remaining property. Any 

allowable damages or benefits will be reflected 

in the offer of just compensation. GSA will 

prepare a written offer of just compensation for 

the property owner when negotiations begin.

BUILDINGS, STRUCTURES AND 

OTHER IMPROVEMENTS

Sometimes, buildings, structures or other 

improvements are located on the property to 

be acquired. If they are determined to be real 

property, GSA must offer to acquire at least 

an equal interest in all buildings, structures or 

other improvements located on the real property 

to be acquired if they must be removed or if they 

will be adversely affected by the use to which 

the real property will be put.T his includes any 

improvement of a tenant-owner who has the 

right or obligation to remove the improvement at 

the expiration or earlier termination of the lease 

term, as discussed in greater detail immediately 

below. 

“ An appraiser will contact the property 

owner to make an appointment to inspect 

his or her property. The appraiser is 

responsible for determining the 

initial fair market value of the property. ”

JUST COMPENSATION

TENANT-OWNED IMPROVEMENTS

Sometimes, a tenant leases real property and 

builds or adds improvements for his or her 

own use. Frequently, the tenant has the right or 

obligation to remove the improvements at the 

expiration or earlier termination of the lease 

term. If, under state law, the improvements 

would be considered to be real property, GSA 

must treat the improvements as real property 

and make an offer to the tenant-owner to acquire 

these improvements as though they were real 
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Property Appraisal and the 

Determination of Just Compensation

these improvements as though they were real 

property. To be paid for these improvements, the 

tenant-owner must assign, transfer and release 

to GSA all of the tenant-owner’s right, title 

and interest in the improvements. In addition, 

the owner of the real property on which the 

improvements are located must relinquish all 

interest he or she has in the improvements. 

In the case of a tenant improvement, the 

measure of just compensation is the amount 

the improvement contributes to the fair market 

value of the whole property, or its value for 

removal from the property (salvage value), 

whichever amount is greater. A tenant-owner 

may reject payment for the tenant improvements 

and obtain payment for his or her property 

interests in accordance with other applicable 

law. GSA is not authorized to pay for tenantowned improvements if such payment would 

result in the duplication of any compensation 

otherwise authorized by law. If state law 

considers the tenant-owned improvements 

to be personal property, then the tenant may 

be reimbursed for moving them under the 

relocation assistance provision.

GSA will personally contact a tenant who has 

made any such improvements to explain the 

procedures to be followed. Any payments must 

be made in accordance with applicable Federal 

and state laws and regulations.T he Uniform Act 

requires that all rental property to be acquired 

must be appraised, but it also authorizes waiving 

that requirement for low-value acquisitions.

The regulations authorize an agency to waive 

the appraisal requirement under certain 

circumstances. If an owner elects to donate 

his or her real property and releases GSA 

from the obligation to obtain an appraisal, or if 

GSA believes acquisition of the real property 

is uncomplicated and a review of available data 

supports a fair market value likely to be $10,000 

or less, GSA may prepare a waiver valuation, 

rather than an appraisal, to estimate the 

property’s fair market value.

EXCEPTIONS TO THE APPRAISAL 

REQUIREMENTS

If GSA believes acquisition of the real property 

is uncomplicated and a review of available 

data supports a fair market value likely to be 

greater than $10,000, but less than $25,000, GSA 

may prepare a waiver valuation, rather than an 

appraisal, to estimate the real property’s fair 

market value, if the agency offers the property 

owner the option of having the agency appraise 

the property. If the owner elects to have GSA 

appraise the property, an appraisal must be 

obtained.
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Negotiations

THE WRITTEN OFFER

After GSA approves the offer of just 

compensation, the agency will begin 

negotiations with the property owner, or his or 

her designated representative, by delivering 

the written offer of just compensation for 

the purchase of the real property. Whenever 

possible, the offer will be delivered in person 

by a GSA representative; otherwise, the offer 

will be mailed and followed up by a personal 

visit or phone call. All owners of the property 

with known addresses will be contacted, 

unless they collectively have designated one 

person to represent their interests. An agency 

representative will discuss the agency’s offer 

to purchase the property, including the basis for 

the offer of just compensation and the agency’s 

acquisition policies and procedures. 

Along with the initial written purchase offer, 

GSA must give the owner a written summary 

statement of the basis for the offer of just 

compensation, which must include, at a 

minimum, the following information:

• The amount offered as just 

compensation;

• The description and location of the 

property and the interest to be acquired; 

and

• The identification of the buildings and 

other improvements that are considered 

to be part of the real property and 

included as part of the offer of just 

compensation.

The offer may list items of real property that the 

owner may elect to retain and remove from the 

property and the retention values associated 

with the individual items. If the owner decides 

to retain any or all of these items, the offer will 

be reduced by the value of the items retained. 

The owner will be responsible for removing 

the items from the property in a timely manner. 

GSA may elect to withhold a portion of the 

remaining offer until the retained items are 

removed from the property. Any separately 

held ownership interest in the property, such as 

tenant-owned improvements, will be identified 

by GSA. GSA may negotiate individually with 

each person who holds a separate ownership 

interest in the property, or it may negotiate with 

the primary owner and prepare a check payable 

jointly to all owners.
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Negotiations

GSA will give the owner a reasonable amount 

of time to consider the written offer and to 

ask questions or seek clarification of anything 

that is not understood. If the owner of the 

property believes that all relevant materials 

were not considered during the appraisal, he 

or she may present such information at this 

time. The owner also may request modifications 

to the proposed terms and conditions of the 

purchase and sale. GSA will consider any 

reasonable requests.

“ GSA may not take 

any action to force 

an owner to accept 

its offer. ”

PARTIAL ACQUISITION

In some cases, GSA will not need to acquire 

all of the owner’s property. GSA usually will 

purchase only what it needs. If GSA intends 

to acquire only a portion of the property, the 

agency must state the amount to be paid for 

the part to be acquired. In addition, an amount 

will be stated separately for damages, if any, 

to the portion of the property to be retained by 

the property owner. If GSA determines that the 

remainder property will have little or no value 

or use to the owner, GSA will consider this 

remainder to be an uneconomic remnant and 

will offer to purchase it.T he owner will then have 

the option of accepting the purchase 

offer for the uneconomic remnant or keeping the 

property.

AGREEMENT BETWEEN THE 

PROPERTY OWNER AND GSA

If the property owner reaches an agreement with 

GSA on the terms and conditions of the offer, 

the owner will be asked to sign a purchase and 

sale agreement, an easement or some form of 

deed that GSA has prepared, as applicable. 

The owner’s signature will affirm that the owner 

and the agency are in agreement concerning 

the terms and conditions of the acquisition of 

the property.

If the owner does not reach an agreement with 

GSA, the agency may suggest mediation as 

a means of coming to an agreement. If, after 

making every reasonable effort to acquire 

the property by negotiation, GSA reasonably 

believes that an agreement cannot be reached, it 

will initiate condemnation proceedings. 

GSA may not take any action to force an owner 

to accept its offer. Prohibited actions include:

• Advancing the time of condemnation;

• Deferring negotiations;

• Deferring condemnation;

• Delaying the deposit of funds with 

the court for the owner’s use once 

condemnation is initiated; or

• Taking any other coercive action designed 

to force an agreement on the price to be 

paid for the property.
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PAYMENT

The next step in the acquisition process is 

payment for the property. As soon as all of 

the necessary paperwork is completed for 

transferring title to the property, GSA will pay 

off any liens against the property and pay the 

remaining equity to the property owner. The 

owner’s incidental expenses also will be paid or 

reimbursed. Incidental expenses are reasonable 

expenses that the owner necessarily incurred as 

a result of transferring title to GSA, such as:

• Recording fees, transfer taxes, 

documentary stamps, evidence of title, 

boundary surveys, legal descriptions of 

the real property, and similar expenses 

necessary to convey title to the property 

to GSA. GSA is not required to pay costs 

to perfect the owner’s title, or to assure 

that the title to the real property is entirely 

without defect. 

• Penalty costs and other charges for 

prepayment of any preexisting recorded 

mortgage entered into in good faith 

encumbering the real property. 

• The pro rata share of any prepaid real 

property taxes that can be allocated to 

the period after GSA obtains title to the 

property or effective possession of it, 

whichever is earlier. 

If possible, GSA will pay these costs directly 

to the property owner to eliminate claim 

reimbursement. 

POSSESSION

GSA may not take possession of the real 

property until:

• The owner has been paid the agreed-upon 

purchase price, or

• In the case of condemnation, GSA has 

deposited with the court, for the benefit 

of the owner, an amount not less than 

the agency’s approved appraisal of 

the fair market value of the property, 

or the amount of the court award of 

compensation in the condemnation 

proceeding for the property.

If GSA takes possession while persons still 

occupy the property, all persons lawfully 

occupying the property must receive a written 

notice to move at least 90 days in advance of the 

required date to move. 

A lawful occupant of a residence cannot be 

required to move until at least 90 days after a 

comparable replacement dwelling has been 

made available for occupancy. Only in unusual 

circumstances, such as when continued 

occupancy would constitute a substantial danger 

to the health or safety of the occupants, may 

occupants of the property be required to vacate 

on less than 90 days advance written notice.

A Relocation Counselor will be appointed 

and made available to all occupants to explain 

their rights, respond to any questions and 

process all claims for reimbursement under the 

Uniform Act.
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Settlement and Condemnation

SETTLEMENT

GSA will make every reasonable effort to reach 

an agreement with the property owner during 

negotiations. The owner may provide additional 

information and make reasonable counteroffers 

and proposals for GSA to consider. When it 

is in the public interest, GSA may use this 

information as a basis for an administrative 

settlement, as appropriate.

CONDEMNATION

If an agreement cannot be reached, GSA 

may acquire the property by exercising its 

power of eminent domain by instituting formal 

condemnation proceedings with the appropriate 

Federal court. 

LITIGATION EXPENSES

Normally, GSA does not reimburse a property 

owner for expenses he or she incurs as a 

result of condemnation proceedings. However, 

GSA will reimburse a property owner for any 

reasonable expenses, including reasonable 

attorney, appraisal and engineering fees, 

which the owner actually incurred because of a 

condemnation proceeding, if:

• The court determines that GSA 

cannot acquire the real property by 

condemnation;

• GSA abandons the condemnation 

proceeding other than under an agreedupon settlement; or

• The property owner files an inverse 

condemnation action and the court 

renders a judgment in favor of the owner 

or the agency settles the case. “ If an agreement 

cannot be reached, 

GSA may acquire the 

property by exercising 

its power of eminent 

domain by instituting 

formal condemnation 

proceedings with the 

appropriate Federal 

court. ”
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Project Contacts

This information is provided to assist you in 

understanding the requirements that GSA must 

meet, as well as the property owner’s rights and 

obligations. If you have any questions, please 

contact the project representative:

Site Acquisition Contact

 Name:

 Phone Number:

 Email:

 Mailing Address:
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Notes
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Notes

United States General Services Administration

Office of Leasing

Center for Site Acquisition and Relocation

April 2012

GSA Public Buildings Service