Section 9.1 General Acquisition Requirements

Grant Administration: Section 9.1 General Acquisition Requirements

For the purposes of this chapter, “property to be acquired” refers to any kind of permanent interest such as fee simple title, land contracts, long-term leases (50 years or more), and rights-of-way (including both temporary and permanent easements). Grantees should also be aware that all methods of acquisition (e.g., purchase by willing sellers and donations) are covered by the URA. 49 CFR 24.101

Grantees must understand the critical difference between voluntary and involuntary sales to ensure compliance with all applicable rules. There are protections for sellers in both voluntary and involuntary sales. This chapter describes those differences and the protections for sellers.

Grantees should not be confused by the terminology of acquisition for URA.

• Voluntary acquisition is not the same as just a willing seller. Voluntary acquisition must meet several requirements that are clarified in Section 9.2 of this chapter.
• Involuntary acquisition is not the same as eminent domain. Involuntary acquisition may occur with or without eminent domain. Also, involuntary acquisition may occur even if the buyer does not have eminent domain powers. Involuntary acquisition is defined and the required procedures described in Section 9.3 of this chapter.

NOTE: The use of federal funds may not be originally anticipated during the conceptual phase or at the beginning of a project. Therefore, grantees should proceed with caution if federal resources could be introduced later in the project. If an acquisition took place prior to application submission, it can be subject to the URA if CDFA finds clear evidence that the purchase was done in anticipation of obtaining CDFA funds for an activity. The URA also applies if an agency has reimbursed itself for the acquisition with non-federal funds (i.e., general funds) if the project’s end result is a federally assisted project. See Handbook 1378, Chapter 2, Paragraph 2-3 H and Chapter 5, Paragraph 5-4 A.

Acquisition activities are subject to the URA if there is intent to acquire property for a federal or federally-assisted project at any point during the course of a project. 49 CFR 24.101

Acquisition rules must be followed whenever the grantee uses CDBG money to:

• Undertake the purchase of property directly; or
• Hire an agent, private developer, etc. to act on their behalf; or
• Provide a non-profit, or for-profit entity organization with funds to purchase a property; or
• Provide federal assistance to individuals who are acquiring their own home (i.e. homebuyer assistance program); or
• Accept donations of property for a CDBG-assisted project.

Also, grantees should be aware of restrictions on using CDBG funds for acquisitions via eminent domain which are detailed in this chapter. Most notably, CDBG funds can only be used for eminent domain if the property is acquired for a public use.

There are three major types of requirements that cover relocation and acquisition activities in CDBG programs:

• The Federal Highway Administration (FHWA), within the U.S. Department of Transportation, is the lead agency for administering URA. FHWA regulations, effective February 2005, implement the Uniform Relocation Assistance and Real Property Acquisition Policies Act (URA) of 1970, as amended ( 49 CFR Part 24 );
• Section 104(d) of the Housing and CommunityDevelopment Act of 1974
  and the implementing regulations at 24 CFR Part 570.488, 24 CFR 42; and,
• 24 CFR 570.606 of the CDBG Regulations, which requires compliance with the regulations, listed above.

Grantees must also adhere to environmental review requirements as they relate to acquisition including the requirements regarding options and conditional contracts. Refer to Chapter 5: Environmental Review for detailed guidance.

Tip: HUD Handbook 1378 is a resource available for acquisition and relocation information and is available at HUD’s web site. Additional guidance and resources can also be downloaded from the FHWA URA Website

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