B-148044, AUG 23, 1974

B-148044, AUG 23, 1974

HOMEOWNER WHOSE PROPERTY IS ACQUIRED BY GOVERNMENT PRIOR TO JANUARY 2, 1971, ENACTMENT DATE OF PUBLIC LAW 91-646, AND WHO IS ALLOWED BY GOVERNMENT TO REMAIN ON PROPERTY WITH OR WITHOUT LEASE AGREEMENT OR PAYMENT OF RENT UNTIL AFTER THAT DATE IS ENTITLED ONLY TO BENEFITS AS TENANT UNDER ACT; DISPLACED PERSON BEING ENTITLED TO HOMEOWNER BENEFITS ONLY IF PROPERTY IS ACTUALLY OWNED BY HIM AND GOVERNMENT ACQUIRES SUCH PROPERTY ON OR AFTER DATE OF ACT. SEE 52 COMP. GEN. 300 (1972).

HOMEOWNER BENEFITS UNDER PUBLIC LAW 91-646:

WE HAVE BEEN ASKED TO REVIEW THE DETERMINATION BY THE ARMY CORPS OF ENGINEERS (CORPS) OF THE BENEFITS DUE MR. AND MRS. NORMAN G. MONDT, OF OGDEN, IOWA, UNDER THE UNIFORM RELOCATION ASSISTANCE AND REAL PROPERTY ACQUISITION POLICIES ACT OF 1970 (RELOCATION ACT), PUB. L. 91-646, JANUARY 2, 1971, 84 STAT. 1894, 42 U.S.C. 4601, AS A RESULT OF THE ACQUISITION OF THEIR PROPERTY BY THE CORPS OF ENGINEERS FOR THE SAYLORVILLE DAM PROJECT. THE MONDTS ARE CONTESTING THE CORPS' DETERMINATION THAT THEY ARE ENTITLED TO THE BENEFITS AFFORDED TENANTS UNDER SECTION 204 OF THE RELOCATION ACT, 42 U.S.C. 4624, RATHER THAN THE GENERALLY MORE FAVORABLE BENEFITS AFFORDED HOMEOWNERS UNDER SECTION 203 OF THAT ACT, 42 U.S.C. 4623. WE WROTE TO THE SECRETARY OF THE ARMY FOR A FULL REPORT AND EXPRESSION OF HIS VIEWS IN THE MATTER WHICH WERE SUBMITTED TO US IN A LETTER DATED JUNE 5, 1974, FROM THE DIRECTOR OF REAL ESTATE, OFFICE OF THE CHIEF OF ENGINEERS.

THE MONDTS WERE OWNERS OF PROPERTY, IDENTIFIED AS TRACT 1214, ACQUIRED BY DECLARATION OF TAKING FILED BY THE CORPS ON NOVEMBER 19, 1970. THE TAKING INCLUDED THE HOUSE AND FARM BUILDINGS, BUT EXCLUDED, UNTIL 1993, ALL SAND AND GRAVEL IN AND UNDER 48.47 ACRES OF THE 82-ACRE TRACT. AN ORDER OF POSSESSION ISSUED JANUARY 7, 1971, PERMITTED THE MONDTS TO REMAIN IN POSSESSION UNTIL MARCH 1, 1971, AT WHICH TIME THEY EITHER HAD TO VACATE THE PROPERTY OR ENTER INTO A LEASE WITH THE GOVERNMENT.

IN MARCH 1971, THE MONDTS SIGNED A LEASE GIVING THEM POSSESSION OF THE TRACT OF LAND TOGETHER WITH A HOUSE, BARN, AND SEVERAL OTHER OUTBUILDINGS FROM MARCH 1, 1971, TO FEBRUARY 29, 1972, THE LEASE TERMINABLE BY THEM ON THE GIVING OF AT LEAST TEN DAYS NOTICE. RENT WAS PAYABLE SEMIANNUALLY IN ADVANCE. IN AUGUST 1971, THE LEASE WAS AMENDED TO DELETE THE FIVE AFOREMENTIONED BUILDINGS AND TO REDUCE THE SEMI ANNUAL PAYMENTS FROM $450 TO $177, EFFECTIVE SEPTEMBER 1, 1971, SINCE THE MONDTS HAD PURCHASED A 40- ACRE REPLACEMENT FARM WITH DWELLING FOR $28,000. THE CORPS REPORT INDICATES THAT THE MONDTS MAY NOT HAVE COMPLETED THEIR MOVE FROM ALL THE PROPERTY UNTIL DECEMBER 1, 1971. THE AGRICULTURAL LEASE WAS AMENDED IN FEBRUARY 1972 TO EXTEND THE LEASE UNTIL FEBRUARY 28, 1973, AT $177.50 PER ANNUM. A SECOND DECLARATION OF TAKING WAS FILED BY THE CORPS ON OCTOBER 26, 1972, FOR THE PURPOSE OF ACQUIRING THE SAND AND GRAVEL PREVIOUSLY EXCLUDED, AND THE MONDTS WERE ALSO ADVISED THAT THE TRACT WOULD NOT BE FURTHER AVAILABLE FOR AGRICULTURAL LEASING AFTER FEBRUARY 28, 1973, THE EXPIRATION DATE OF THEIR LEASE.

IN APRIL 1973, THE MONDTS FILED AN APPLICATION FOR RELOCATION ASSISTANCE IN THE AMOUNT OF $15,975, SEEKING A $500 PAYMENT IN LIEU OF MOVING AND DISLOCATION ALLOWANCE; A MINIMUM $2,500 IN LIEU OF FARM DISLOCATION ALLOWANCE; AND A $12,975 REPLACEMENT HOUSING PAYMENT FOR HOMEOWNERS. THE FIRST TWO PAYMENTS, WHICH ARE STATUTORY ALLOWANCES IN LIEU OF PAYMENT OF ACTUAL EXPENSES, WERE APPROVED BY THE DISTRICT ENGINEER; HOWEVER, BASED ON HIS INTERPRETATION OF OUR DECISION OF NOVEMBER 28, 1972, 52 COMP. GEN. 300, HE DISALLOWED THE SECTION 203 REPLACEMENT HOUSING PAYMENT ENTIRELY AND INSTEAD TREATED THE APPLICANTS AS TENANTS.

HAVING INITIALLY PLACED A $4,550 VALUE ON THE ACQUIRED HOME AND LOT, BASED ON THE VALUE THE HOUSE CONTRIBUTED TO THE ENTIRE FARM, THE DISTRICT ENGINEER AWARDED THEM A SECTION 204 DOWNPAYMENT BENEFIT OF $2,602.50. ARRIVE AT THE $12,950 REPLACEMENT HOUSING DIFFERENTIAL THEY REQUESTED, THE APPLICANTS, ACCORDING TO THE CORPS, APPARENTLY SUBTRACTED THIS AMOUNT FROM $17,500, THEIR ESTIMATED COST OF A REPLACEMENT HOME. THE DISTRICT ORIGINALLY ESTIMATED THAT THE REPLACEMENT DWELLING AND LOT CONTRIBUTED APPROXIMATELY $10,600 - LATER REVISED TO $12,500 - TOWARD THE ENTIRE $28,000 VALUE OF THE REPLACEMENT FARM. WE ARE ASKED, IN EFFECT, TO DETERMINE IF THE MONDTS ARE ENTITLED TO THE MORE THAN $10,000 ADDITIONAL THEY ARE NOW SEEKING.

THE CORPS' POSITION IN THE MATTER IS SUMMARIZED IN ITS DIRECTOR OF REAL ESTATE'S LETTER TO US AS FOLLOWS:

"FOLLOWING ACQUISITION OF THEIR DWELLING, THE MONDTS WERE PERMITTED BY THE GOVERNMENT TO REMAIN IN POSSESSION UNTIL 1 MARCH 1971, AT WHICH TIME THEY ENTERED INTO A LEASE WITH THE GOVERNMENT. THEY CONTINUED IN OCCUPANCY OF THE DWELLING UNDER THE LEASE UNTIL THE MOVED IN DECEMBER 1971. WHILE THEY WERE NOT TECHNICALLY 'LESSEES' DURING THE PERIOD FROM 19 NOVEMBER 1970 UNTIL 1 MARCH 1971 BECAUSE THERE WAS NO LEASE, THEY COULD NOT HAVE BEEN 'OWNERS' DURING THAT PERIOD BECAUSE THEY WERE OCCUPYING PREMISES OWNED BY THE UNITED STATES. THE FACT THAT THEY WERE NOT REQUIRED TO PAY RENT DURING THIS PERIOD DOES NOT ALTER THEIR STATUS AS TENANTS OF GOVERNMENT-OWNED PROPERTY. SINCE THEY DID NOT OWN THE DWELLING ON THE EFFECTIVE DATE OF PUBLIC LAW 91-646, THEY COULD NOT QUALIFY FOR BENEFITS UNDER SECTION 203 BUT WERE ELIGIBLE FOR BENEFITS AS TENANTS UNDER SECTION 204 WHEN THEY RELOCATED, IN ACCORDANCE WITH YOUR DECISION NO. B-148044."

THUS, BASED ON ITS INTERPRETATION OF OUR DECISION OF NOVEMBER 28, 1972, B -148044, 52 COMP. GEN. 300, THE CORPS TREATS ALL FORMER OWNERS WHOSE DWELLINGS WERE ACQUIRED PRIOR TO THE EFFECTIVE DATE OF THE RELOCATION ACT AS TENANTS. THE CORPS' REGULATIONS STATE THAT BENEFITS ARE TO BE DETERMINED AS OF THE DATE OF VACATION OF THE PROPERTY BUT THAT "NO BENEFIT SHALL BE PAID UNDER SECTION 203 TO ANY PERSON WHOSE PROPERTY WAS ACQUIRED PRIOR TO JANUARY 2, 1971." 32 CFR 641.9.

IN THEIR LETTER TO US OF APRIL 5, 1974, THE MONDTS, ON THE OTHER HAND, STATE THAT:

"WE BELIEVE THAT THE COMPTROLLER GENERAL DECISION WAS BASED UPON A CASE WHICH DEALT PRIMARILY WITH PRIORITY LESSEES WHICH WOULD NOT APPLY TO US AS WE DID NOT BECOME LESSEES UNTIL MARCH 5, 1971, AND MOVED FROM THE PROPERTY AND DWELLING IN SEPTEMBER OF 1971."

IN 52 COMP. GEN. 300, SUPRA., WE HELD THAT PERSONS WHO SOLD THEIR HOMES TO THE GOVERNMENT AND WHO BECAME PRIORITY LESSEES OF THE PROPERTY PRIOR TO THE ENACTMENT OF THE RELOCATION ACT ARE NOT ENTITLED TO THE BENEFITS AFFORDED HOMEOWNERS UNDER THAT LAW BUT MUST BE TREATED AS TENANTS.

WE SEE NO BASIS TO DISTINGUISH BETWEEN SUCH LESSEES AND THOSE PERMITTED BY THE GOVERNMENT TO REMAIN ON THE PROPERTY FOR A SHORT PERIOD OF TIME WITHOUT A LEASE. AS INDICATED BY THE DIRECTOR OF REAL ESTATE SUCH PERSONS "COULD NOT HAVE BEEN 'OWNERS' DURING THAT PERIOD BECAUSE THEY WERE OCCUPYING PREMISES OWNED BY THE UNITED STATES."

WHEN THE GOVERNMENT ACQUIRES PROPERTY FOR A PROJECT EITHER THROUGH CONDEMNATION OR BY NEGOTIATION, IT GENERALLY TRIES TO ALLOW THE FORMER OWNERS TO REMAIN ON THE PROPERTY FOR SUFFICIENT TIME TO ARRANGE THEIR AFFAIRS AND FIND REPLACEMENT HOUSING. FOR EXAMPLE, THE CORPS' POLICY IS, IN EFFECT, THAT, TO THE GREATEST EXTENT PRACTICABLE, NO PERSON LAWFULLY OCCUPYING REAL PROPERTY WILL BE REQUIRED TO MOVE WITHOUT BEING GIVEN AT LEAST 90 DAYS' WRITTEN NOTICE. A NOTICE OF LESS THAN 90 DAYS MAY BE GIVEN ONLY IN EMERGENCY OR OTHER EXTRAORDINARY SITUATIONS WITH THE PRIOR APPROVAL OF A CENTRAL OFFICE LOCATED IN WASHINGTON, D.C. 32 C.F.R. 641.194. HOWEVER, AS THE NEW OWNER OF THE PROPERTY, THE GOVERNMENT COULD REQUIRE THE FORMER OWNERS TO VACATE IMMEDIATELY UPON ACQUISITION.

PERSONS WHO OWN THEIR PROPERTY AS OF OR AFTER THE DATE OF ENACTMENT OF THE RELOCATION ACT AND WHOSE PROPERTY IS ACQUIRED BY THE GOVERNMENT AFTER THAT DATE DO NOT, OF COURSE, LOSE THEIR STATUS AS HOMEOWNERS AND BECOME TENANTS FOR THE PURPOSES OF THE BENEFITS ACCORDED BY THE SUBJECT ACT BY VIRTUE OF THEIR REMAINING ON THEIR FORMER PROPERTY FOR THE FEW WEEKS OR MONTHS ALLOWED THEM BY THE ACQUIRING AGENCIES. HOWEVER, IT IS OUR VIEW THAT A DISPLACED PERSON IS ENTITLED TO HOMEOWNER BENEFITS ONLY IF HE OWNED THE PROPERTY AT THE TIME THE GOVERNMENT ACQUIRED IT AND SUCH ACQUISITION TOOK PLACE ON OR AFTER JANUARY 2, 1971. THUS, PERSONS WHOSE PROPERTIES WERE ACQUIRED PRIOR TO THE DATE OF ENACTMENT OF THE ACT MAY NOT BE CONSIDERED OWNERS FOR THE PURPOSES OF SECTION 203 SINCE, OBVIOUSLY, AT THE TIME OF THE ACQUISITION OF THEIR PROPERTY THE RELOCATION ACT WAS NOT IN EFFECT AND THEY WERE NOT HOMEOWNERS ON OR AFTER THE EFFECTIVE DATE OF THE ACT. IF THE CONGRESS HAD INTENDED THE BENEFITS OF THIS ACT TO APPLY TO ALL THOSE WHOSE PROPERTIES WERE ACQUIRED BEFORE JANUARY 1, 1971, IT COULD HAVE SO PRVIDED. INSTEAD, IT SPECIFICALLY ALLOWED RETROACTIVE BENEFITS ONLY TO A SMALL AND SPECIFIC GROUP OF DISPLACED PERSONS SO THAT IT IS CLEAR THAT OTHERS WHOSE PROPERTIES WERE ACQUIRED BEFORE THE SUBJECT DATE ARE NOT ENTITLED TO THE ACT'S HOMEOWNER BENEFITS. SEE 52 COMP. GEN. 300, SUPRA.

IN A LETTER OF JULY 26, 1974, TO US, THE MONDTS QUOTE THE PROVISIONS OF THE ACT OF FEBRUARY 26, 1931, CH. 307, SEC. 1, 46 STAT. 1421, 40 U.S.C. 258A, AND CONTEND THAT SINCE THEY WERE NOT ENTITLED TO DRAW UPON THE DEPOSIT UNTIL AFTER THE COURT'S DECISION ON JANUARY 7, 1971, THEY WERE OWNERS AT LEAST THROUGH THAT DATE.

THE RELEVANT PROVISIONS OF THAT SECTION ARE:

"SEC. 258A. SAME; LANDS, EASEMENTS, OR RIGHTS-OF-WAY FOR PUBLIC USE; TAKING POSSESSION AND TITLE IN ADVANCE OF FINAL JUDGMENT; AUTHORITY; PROCEDURE.

"UPON THE FILING SAID DECLARATION OF TAKING AND OF THE DEPOSIT IN THE COURT, TO THE USE OF THE PERSONS ENTITLED THERETO, OF THE AMOUNT OF THE ESTIMATED COMPENSATION STATED IN SAID DECLARATION, TITLE TO THE SAID LANDS IN FEE SIMPLE ABSOLUTE, OR SUCH LESS ESTATE OR INTEREST THEREIN AS IS SPECIFIED IN SAID DECLARATION, SHALL VEST IN THE UNITED STATES OF AMERICA, AND SAID LANDS SHALL BE DEEMED TO BE CONDEMNED AND TAKEN FOR THE USE OF THE UNITED STATES, AND THE RIGHT TO JUST COMPENSATION FOR THE SAME SHALL VEST IN THE PERSONS ENTITLED THERETO; AND SAID COMPENSATION SHALL BE ASCERTAINED AND AWARDED IN SAID PROCEEDING AND ESTABLISHED BY JUDGMENT THEREIN, AND THE SAID JUDGMENT SHALL INCLUDE, AS PART OF THE JUST COMPENSATION AWARDED, INTEREST AT THE RATE OF 6 PER CENTUM PER ANNUM ON THE AMOUNT FINALLY AWARDED AS THE VALUE OF THE PROPERTY AS OF THE DATE OF TAKING, FROM SAID DATE TO THE DATE OF PAYMENT; BUT INTEREST SHALL NOT BE ALLOWED ON SO MUCH THEREOF AS SHALL HAVE BEEN PAID INTO THE COURT. NO SUM SO PAID INTO THE COURT SHALL BE CHARGED WITH COMMISSIONS OR POUNDAGE.

IT CAN BE SEEN BY THE ABOVE-QUOTED PORTION OF THE ACT THAT TITLE TO THE PROPERTY, ALONG WITH RIGHT TO POSSESSION THERETO, VESTS IN THE UNITED STATES IN ADVANCE OF A FINAL JUDGMENT IN CONDEMNATION PROCEEDINGS. SEE ALSO 40 U.S.C. 258D. ACCORDINGLY, UPON FILING OF THE DECLARATION OF TAKING AND THE DEPOSIT OF MONIES IN THE COURT, TITLE TO THE MONDTS' PROPERTY PASSED TO THE GOVERNMENT. THIS, OF COURSE, OCCURRED PRIOR TO THE DATE OF ENACTMENT OF THE RELOCATION ACT.

ACCORDINGLY, IT IS OUR VIEW, THAT PERSONS WHO WERE NOT HOMEOWNERS ON OR AFTER JANUARY 2, 1971, THE EFFECTIVE DATE OF PUBLIC LAW 91-646, CANNOT QUALIFY FOR HOMEOWNER BENEFITS UNDER THE RELOCATION ACT AND WE BELIEVE, THEREFORE, THAT THE COPRS PROPERLY DETERMINED THE TYPE OF BENEFITS TO WHICH THE MONDTS ARE ENTITLED.