Reformation of Land Purchase Contracts

GAO was requested to approve a plan by the National Park Service which reopens some 465 land purchase contracts at the Lower St. Croix Wild and Scenic Riverway. The Park Service determined that these tracts were acquired on the basis of appraisals which were made on an erroneous legal premise. As a result, the affected landowners were offered approximately 25 percent less compensation than that to which they were legally entitled. Consequently, the Department of the Interior wishes to reappraise each tract and negotiate the amount of additional payment due to each landowner. GAO held that, in acquiring property, the United States is obligated to pay the landowner just compensation. By statute, the United States must also give the landowner an appraisal of the acquired land which uses proper appraisal techniques and standards, and represents the government's best estimate of the compensation due the landowner. Therefore, since the Park Service's appraisals were based on an erroneous legal premise, GAO held the Park Service may reopen negotiations on those parcels of land which have already been acquired and reappraise the tracts in order to pay the owners just compensation for their land.