B-148044, MAR 5, 1975

B-148044, MAR 5, 1975

APARTMENT OWNER-LANDLORD WHO NEITHER RESIDES NOR MAINTAINS OFFICE OR PERSONAL PROPERTY IN APARTMENT BUILDING ACQUIRED BY GOVERNMENT IS NONETHELESS ENTITLED TO BENEFITS OF SECTION 202(C) OF UNIFORM RELOCATION ASSISTANCE AND REAL PROPERTY ACQUISITION POLICIES ACT OF 1970, SINCE ABSENTEE LANDLORD MAY BE CONSIDERED "DISPLACED PERSON" AS DEFINED IN SUCH ACT AND SINCE PURPOSE OF SECTION 202(C) IS NOT ONLY TO PROVIDE ALTERNATIVE PAYMENT TO ACTUAL MOVING EXPENSES BUT TO COMPENSATE FOR LOSS OF LIVELIHOOD AND PATRONAGE WHETHER OR NOT LANDLORD ACTUALLY RELOCATES SUCH BUSINESS, PROVIDED OTHER CONDITIONS OF SUBSECTION ARE MET.

ENTITLEMENT OF ABSENTEE LANDLORD TO RELOCATION PAYMENT FOR MOVING AND RELATED EXPENSES:

THE ARCHITECT OF THE CAPITOL HAS REQUESTED OUR DECISION CONCERNING THE APPLICABILITY OF SECTIONS 101(6) AND 202(C) OF THE UNIFORM RELOCATION ASSISTANCE AND REAL PROPERTY ACQUISITION POLICIES ACT OF 1970. PUB. L. NO. 91-646, JANUARY 2, 1971, 84 STAT. 1894, 42 U.S.C. SECS. 4601(6), 4622(C)(1970), TO THE ACQUISITION OF RENTAL PROPERTY FROM OWNERS WHO NEITHER RESIDE NOR MAINTAIN AN OFFICE IN THE PROPERTY ACQUIRED.

THE ARCHITECT IS CURRENTLY ACQUIRING ALL PRIVATELY OWNED PROPERTY IN SQUARE 724 OF THE DISTRICT OF COLUMBIA PURSUANT TO THE PROVISIONS OF THE SUPPLEMENTAL APPROPRIATIONS ACT, 1973, PUB. L. NO. 92-607, OCTOBER 31, 1972, 86 STAT. 1498, 1510 AND PURSUANT TO THE DIRECTIONS OF THE SENATE OFFICE BUILDING COMMISSION. THE ARCHITECT ACQUIRED THE PREMISES KNOWN AS 322 SECOND STREET, N.E., WASHINGTON, D.C., AN APARTMENT BUILDING OWNED PRIOR TO ACQUISITION BY MRS. HORTENSE E. BECKER OF SILVER SPRING, MARYLAND. TITLE VESTED IN THE UNITED STATES ON JULY 26, 1974, AND ON AUGUST 28, 1974, MRS. BECKER SUBMITTED AN APPLICATION FOR REIMBURSEMENT OF MOVING AND RELATED EXPENSES UNDER THE ACT. HER TOTAL CLAIM, IN THE AMOUNT OF $7,007.82, IS BROKEN DOWN INTO $6,992.82 CLAIMED FOR MOVING AND RELATED EXPENSES UNDER THE OPTION CLAUSE OF SECTION 202(C) OF THE ACT AND SECTIONS 1.5 AND 4.3 OF THE REGULATIONS OF THE ARCHITECT OF THE CAPITOL AND $15 FOR EXPENSES INCIDENTAL TO TRANSFERRING THE TITLE TO THE UNITED STATES. SECTION 202(C) ESTABLISHES A FORMULA FOR A PAYMENT IN LIEU OF THE PAYMENT FOR ACTUAL EXPENSES FOR MOVING AND RELATED EXPENSES PROVIDED BY SECTION 202(A).

THE ARCHITECT STATES THAT HE BELIEVES THAT A BUSINESS ENGAGED IN THE LEASE AND RENTAL OF REAL PROPERTY, SUCH AS MRS. BECKER'S APARTMENT HOUSE, FALLS WITHIN THE DEFINITION OF "BUSINESS" CONTAINED IN SECTION 101(7) OF THE ACT. WE AGREE.

THE ARCHITECT IS, HOWEVER, CONCERNED ABOUT TWO ISSUES ARISING UNDER SECTION 202(C) OF THE ACT. FIRST, HE NOTES THAT PAYMENTS MAY BE MADE ONLY TO BUSINESS OWNERS WHO QUALIFY AS "DISPLACED PERSONS" AS DEFINED, IN PART, IN SECTION 101(6) OR THE ACT AS A PERSON WHO "MOVES FROM REAL PROPERTY, OR MOVES HIS PERSONAL PROPERTY FROM REAL PROPERTY, AS THE RESULT OF THE ACQUISITION OF SUCH REAL PROPERTY *** FOR A PROJECT UNDERTAKEN BY A FEDERAL AGENCY ***." SECOND, HE NOTES THAT THE HEAD OF THE FEDERAL AGENCY INVOLVED MUST BE SATISFIED THAT THE BUSINESS "CANNOT BE RELOCATED WITHOUT SUBSTANTIAL LOSS OF ITS EXISTING PATRONAGE." ACCORDINGLY, HE STATES:

"THE ACT THUS COULD BE INTERPRETED TO SUGGEST THAT A DISPLACED PERSON MUST EITHER RESIDE IN THE ACQUIRED PROPERTY OR OTHERWISE PHYSICALLY OCCUPY IT DURING THE COURSE OF CONDUCTING HIS BUSINESS IN ORDER TO QUALIFY AS A DISPLACED PERSON UNDER THE ACT. IT FURTHER COULD BE INTERPRETED TO SUGGEST THAT THERE BE A PHYSICAL RELOCATION OF THE BUSINESS ACTIVITY AS A CONDITION FOR ELIGIBILITY."

TO ASSIST US IN ANSWERING THIS QUESTION, WE ASKED FOR THE VIEWS OF THE SECRETARY OF HOUSING AND URBAN DEVELOPMENT AND THE ADMINISTRATOR OF THE GENERAL SERVICES ADMINISTRATION. THOSE VIEWS WERE SUPPLIED IN A LETTER DATED DECEMBER 18, 1974, FROM THE GENERAL COUNSEL OF HOUSING AND URBAN DEVELOPMENT AND A LETTER DATED DECEMBER 30, 1974, FROM THE ASSOCIATE ADMINISTRATOR OF THE GENERAL SERVICES ADMINISTRATION (GSA).

THE POSITION TAKEN IN BOTH LETTERS IS THAT AN "ABSENTEE LANDLORD" IS ENTITLED TO THE BENEFITS OF THE ACT. THE ASSOCIATE ADMINISTRATOR OF GSA STATES THAT THIS POSITION IS SHARED BY THE DEPARTMENTS OF DEFENSE, TRANSPORTATION AND THE INTERIOR.

WE AGREE WITH THAT POSITION. AS NOTED IN THOSE LETTERS TO US, IT WOULD BE UNUSUAL FOR AN ABSENTEE LANDLORD TO BE WITHOUT ANY PERSONALTY WHICH MUST BE MOVED FOLLOWING THE ACQUISITION OF THE PROPERTY. SUCH PERSONALTY MIGHT INCLUDE, IT IS NOTED, OFFICE STATIONERY, A DESK OR SOME GARDEN TOOLS. FURTHER, IT WOULD BE INEQUITABLE TO ALLOW RELOCATION ASSISTANCE TO AN ABSENTEE LANDLORD (LESSOR) MAINTAINING THAT MINIMUM PERSONALTY AND TO ANY ASSISTANCE TO ONE WHO DOES NOT HAVE EVEN THAT MINIMUM. THUS, IT IS OUR OPINION THAT AN ABSENTEE LANDLORD WHOSE PROPERTY IS ACQUIRED BY GOVERNMENT MAY BE CONSIDERED A "DISPLACED PERSON" AS DEFINED IN THE ACT, EVEN THOUGH HE HAD NO PERSONAL PROPERTY ON THE ACQUIRED PROPERTY.

AS TO A BUSINESS WHICH IS NOT RELOCATED, SECTION 202(C) PROVIDES FOR BENEFITS TO THE OWNER OF SUCH A BUSINESS IF - INSOFAR AS PERTINENT HERE - THE HEAD OF THE FEDERAL AGENCY INVOLVED IS SATISFIED THAT THE BUSINESS CANNOT BE RELOCATED WITHOUT SUBSTANTIAL LOSS OF PATRONAGE. FURTHER, THE LEGISLATIVE HISTORY OF SECTION 202(C) SUGGESTS THAT THE PURPOSE OF THAT SECTION WAS NOT ONLY TO PROVIDE AN ALTERNATIVE PAYMENT TO ACTUAL MOVING EXPENSES, BUT ALSO TO COMPENSATE FOR LOSS OF LIVELIHOOD AND LOSS OF PATRONAGE. H. REPT. 91-1656, 91ST CONG., 2D SESS., 7-8 (1970). THE LOSS OF EXISTING PATRONAGE COULD COME ABOUT IF THE DISPLACED OWNER WOULD BE UNABLE TO RETAIN A SUBSTANTIAL NUMBER OF EXISTING TENANTS AT A NEW LOCATION. THUS, THE PROVISIONS OF SECTION 202(C) DO NOT REQUIRE A DISPLACED BUSINESS OWNER TO RELOCATE HIS BUSINESS PRIOR TO BEING ELIGIBLE FOR BENEFITS THEREUNDER, PROVIDED THE HEAD OF THE AGENCY INVOLVED MAKES THE REQUIRED DETERMINATIONS CONCERNING LOSS OF EXISTING PATRONAGE AND THAT THE BUSINESS IS NOT A PART OF A COMMERCIAL ENTERPRISE HAVING AT LEAST ONE OTHER ESTABLISHMENT NOT BEING ACQUIRED BY THE UNITED STATES WHICH IS ENGAGED IN THE SAME OR SIMILAR BUSINESS.

HENCE, AN ABSENTEE OWNER OF A RESIDENTIAL APARTMENT BUILDING, IF OTHERWISE ELIGIBLE, IS NOT PRECLUDED BY THE TERMS OF SECTIONS 101(6) AND 202(C) OF THE ACT FROM ENTITLEMENT TO THE BENEFITS AFFORDED BY SECTION 202(C) IF THE OTHER CONDITIONS OF THAT SECTION ARE MET.