When the City of Kansas City Needs Your Property for Public Use
The IMPROVEMENT of City facilities usually involves taking private property on which to construct such facilities.
We must have proper safeguards for the citizens who pay for such City improvements, as well as for the property owner from whom the property or right-of-way must be acquired. We have through the years, developed policies and procedures which we hope will accomplish these two objectives. We want you to be familiar with these steps.
For this reason, we have prepared this informational brochure to help you become more familiar with our policies and thereby know what to expect during your dealings with our Property and Relocation Services Division, of the City Planning and Development Department.
It is our sincere desire that the information contained in this brochure will provide a knowledgeable basis for mutual confidence and cooperation; and that, at the conclusion of our transaction, you will be a firm friend and supporter of your Kansas City Government.
The City of Kansas City's land acquisition procedure can be separated into five phases.
- Donations
- Valuation and Appraisal
- Negotiation
- Settlements and Closing
- Eminent Domain
Each phrase will be discussed here.
Donations
The donation procedure is a very important tool for local public agencies since many have limited financial resources. Also, many acquisitions are relatively minor and often the benefits realized by the property owner offset the value of the donated property.
Property owners, having been made aware of their right to receive just compensation, may elect to waive this right and donate their property the City.
In this situation, an owner will be asked to sign a Waiver of Compensation in addition to the deed and other supporting documents.
Valuation and Appraisal... what it's worth
This is the period in which a study is to be made to determine the amount of money that you are entitled to receive in payment for the property which will be acquired from you.
Valuation studies of this type include appraisals which are made by individuals, known as "appraisers", who will work with and welcome assistance from you as the property owner.
The appraisals will be completed by well-qualified, independent appraisers, or by well-trained and equally qualified staff appraisers.
Worth... your cooperation and assistance is very important
Independent appraisers are employed, by contract, to work on specific properties or projects. They have no financial or personal interest in the property they are appraising.
The amount of money to be paid to a property owner is often called "damages".
In every case, the completed appraisals will be reviewed and checked for accuracy and consistency by a "reviewing appraiser".
If the entire parcel is to be acquired, the appraisers must establish its "current market rent", or the amount of money that the property would sell for, on the open market, from a willing and informed seller to a buyer with the same qualifications.
If only a part of your property is needed for the City project, the appraisers follow a similar procedure, and establish the value of the entire property before it is in any way changed by the City project. They must also determine what the value of your remaining property will be, assuming that the City improvements have been completed, considering the physical changes and any special benefits that might be created.
You are entitled to receive an amount equal to the difference in the work of your property before a part of it is acquired for City use and the amount that it would sell for after part of it has been acquired.
Your cooperation and assistance, as a property owner, is very important in the appraisal process. We will appreciate your participation in the valuation study, so that in the end the amount of damages to which you are entitled will by the results of the combined efforts of both you and the City of Kansas City, Missouri.
Appropriate addresses are listed for your convenience in the event that you have additional information which you feel will assist us in arriving at a fair appraisal of your property.
Before a final decision is made as to the amount that will be offered to you, a review of all facts involved will be made by representatives of the City from Property and Relocation Services Division, Law Department, Public Works Department, and any other City agency that may have an interest in your property.
Negotiations... based on the facts
After the value or damage figure is established, a City negotiator will contact you.
His/Her offer for your property will be a value that facts will support.
Past experience teaches that owners cannot all be treated equally under a flexible procedure, where prices and offers can be increased and adjusted through a trading process.
We strongly believe that offers and settlements must be based on proven property values and not on the owner's skill -- or lack of skill -- in negotiating and trading.
The present system assures that our first offer to you will be the fair compensation that the City can pay for the property taken; and, in the event you are inexperienced in real estate transactions, you will not be at a disadvantage.
If additional facts come to our attention, which will justify an adjustment in the damage figure, such adjustment will be made.
City negotiators will deal only with you, or with your properly authorized attorney or representative. However, before we can negotiate with an attorney. We must have a letter from either you or your authorized representative advising that he has been authorized to negotiate in your behalf. We do not normally negotiate through real estate firms or others who do not have a direct interest in your property. The City is not responsible for real estate commissions and if you use an agent their fee is your responsibility.
The negotiator will advise you of the offer and explain in detail how the new City project will effect your property. The City's procedure of acquisition at this point includes the following: Accompanying the offer will be an "Option to Purchase" stating the purchase price, the amount of time estimated to close the transaction and other pertinent information. When this document is signed and returned to the City, steps are taken to procure the money from the department which authorized the acquisition. As soon as the money is received by the Property and Relocation Services Division an "Exercise of Option to Purchase" is prepared and forwarded to you and the Title Company. Upon signing and returning the "Exercise" to Property and Relocation Services, you are requested to contact the Title Company listed in the "Exercise" for closing the transaction. The copy of the "Exercise" forwarded to the Title Company includes the City's instructions for closing and the money for your property.
When improvements are purchased, the owner will have an opportunity to retain them, and the payment will be reduced accordingly by that amount established as salvage value. Any improvements must be removed from the premises before closing the real estate transaction.
Total payment for your real estate will be made prior to the City taking possession.
Settlements and Closing... of interest to you
Here are information and facts concerning settlements that are of primary interest to owners:
- Your signed deed will normally be held in escrow, usually by the title Company and the escrow agent will also distribute the money to those entitled to receive the payment. The Title Company is authorized to record the deed in the appropriate office of Recorder of Deeds, and with closing costs and recording fees to be the responsibility of the City.
- Normally you can expect payment within approximately sixty (60) days after signing of the "Option to Purchase", or whatever time it provides. The entire amount of the settlement will be paid to those having interest in the property. Delinquent taxes, specials and liens of this type must be paid by the owner.
- Occupants of improvements located on land acquired for the City will be given a written notice to vacate a minimum of ninety (90) days in advance of the date required to surrender possession of the property to the Department.
- Owners will be reimbursed for a pro rata portion of the state, county and city real estate taxes paid for the current taxable year on property purchased by the City. The pro rata portion of taxes will cover the full number of months remaining in the calendar year after payment is received for the real property. Claims must be made within six (6) months after the city or county tax delinquent date. Delinquent tax payments are not reimbursable. Reimbursement claim forms can be obtained from the City. As a practical note: the current year real estate taxes will be pro rated by the Title Company when this matter is closed.
- Owners will be reimbursed for actual penalty costs for prepayment of a pre-existing mortgage entered into in good faith and filed of record prior to the scheduled date of the design public hearing for the project. To be eligible for this payment, the property must be taken in its entirety or the taking must be of such magnitude, that the remainder will not provide collateral for the mortgage and/or the mortgagor must require prepayment of the mortgage. Prepayment mortgage penalty claim forms can be obtained from the City.
- Owners have the right to request review of the pro rata portion of real estate taxes as determined by the City. They also may request review of any penalty cost for prepayment of a pre-existing recorded mortgage as determined by the City. If after this review and discussion you are still not in agreement, you have the right for a formal appeal. This appeal must be filed within sixty (60) days after you have been notified in writing of rejection by the City following its review.
In the event relief requested in your formal appeal to the City is not granted, you still have the right to seek judicial review.
Eminent Domain... how it works
If it is not possible for the owner and City representative to agree on the amount of damage to be paid, it will be necessary to establish the price to be paid, through a procedure provided by law known as eminent domain or condemnation.
When this course of action is taken, the following procedure is used, with the exception that a negotiated settlement is possible up to the date of a hearing by the Court.
The City will file in the Circuit Court of the county where the property is located a Condemnation Petition setting out the land and/or rights to be acquired and naming all parties owning an interest in it.
The Circuit Judge will set a date for hearing the petition after which due notice of the date of the hearing is given to the landowners affected through a "summons". If, on the date set, the Court finds the petition to be proper, the Judge will appoint three disinterested persons, who own land and reside in the same county, to appraise the property and determine the amount that they feel the owner is entitled to receive.
The Court appointed Commissioners after considering the facts, make their decision and file their report with the Clerk of the Court.
After the Commissioners make their decision concerning damages and file their report in court, the City must deposit this amount found by them with the Circuit Clerk before taking possession of the property.
Either side can, within thirty (30) days from receipt of notice of filing of Commissioner's Report, file exceptions to the Commissioner's Award, if they are not satisfied, and ask that the matter be heard before a jury for final determination.
If exceptions are not filed by either the owner or the City, the amount determined by the Court-appointed Commissioners become final.
The landowner can withdraw the court deposit any time, regardless of whether or not such exceptions are filed: however, if exceptions are filed and a jury award is for a smaller amount, the owner must refund the difference to the City, together with six percent interest on the refunded amount. By the same token, if the jury award is higher, the City must pay the difference, plus interest.
The above is set out not as advice but to inform you of the alternate available should you elect not to accept the offer made for your property. For specific information or advice concerning condemnation, we suggest that you confer with an attorney of your choice.
