CHARLES D. RICE, )
vs. ) CASE NO. 83-135
Respondent. )
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William B. Thomas, held a formal hearing in this case on April 20, 1983, in Pensacola, Florida. The transcript was filed on May 3, 1983, and the parties were allowed 15 days thereafter to submit proposed findings of fact and conclusions of law. These were submitted by counsel on behalf of the Respondent, and have been largely adopted. Nothing has been received from the Petitioner.
For Petitioner: Gary B. Lane, Esquire
For Respondent: Vernon L. Whittier, Jr., Esquire
The Petitioner filed this appeal from the Department's determination that a replacement housing payment of $14,563.42 is the maximum amount due the Petitioner for relocation benefits, after displacement of his dwelling for a highway right-of-way. Thus, the issue to be resolved is the proper amount of the replacement housing payment due the Petitioner.
Charles D. and Winnie R. Rice owned and occupied a three bedroom, one bath, frame dwelling located on U.S. 29 in Century, Florida, consisting of 1,283 total square feet. This dwelling had no carport or garage. The Department of Transportation needed a right-of-way where their dwelling was located for a highway construction project.
Mr. Rice first became aware of the Department's need for his property in 1977. Acquisition of the right-of-way in Mr. Rice's area commenced around 1980.
Replacement housing is part of the Relocation Assistance Program administered by the Department of Transportation for persons displaced by the
acquisition of real property for the construction of highway projects. The purpose of the Replacement Housing Program is to provide people with comparable replacement housing when they are displaced because of any type of federally funded project.
Comparable replacement housing is that which is substantially equal to the housing occupied prior to acquisition. When persons who are displaced buy an established home on the market, any extra features in the existing home that were not in the old one are not considered in determining eligibility payments. When the choice is to build a new structure instead of buying an existing house, the Replacement Housing Program permits the Department to participate only in the cost of a structure of comparable size and similar features to the house being replaced.
Cmparable housing in the local market is examined in order to determine what is available for sale in the area. The first comparable housing for sale in the area in this case was priced in the amount of $42,000, and this was selected as the first comparable figure for compensation purposes.
A household survey was made of the Rice dwelling on February 4, 1982, to determine the number of rooms, area of living space, age and type of construction, so as to establish the level of eligibility in the Department's Relocation Assistance Program. On July 20, 1982, the Rice dwelling was inspected in order to confirm the information in the February household survey. The inspector measured the rooms and talked with Mr. Rice about the Relocation Program, but there was no discussion about monetary amounts.
A Statement of Eligibility was prepared based on the first comparable housing amount of $42,000 which had been selected. This first comparable amount was used in the preparation of the Statement of Eligibility, wherein the approved appraisal for acquisition of the Rice's original dwelling ($19,240) was subtracted from the first comparable amount of $42,000, leaving a balance of
$22,760. This figure was shown on the Statement of Eligibility as the maximum amount payable. (Exhibit 4)
The Department's first contract with Mr. and Mrs. Rice when money was discussed was on August 19, 1982. The amount of the approved appraisal for the Rice property was discussed, as were subjects such as moving costs, replacement housing, and the Statement of Eligibility showing a maximum amount of $22,760. In addition, Mr. and Mrs. Rice were given a copy of the Department's publication called Your Relocation, which Mr. Rice read. He became familiar with the statement on page 5 about comparable replacement housing. The Rices were instructed to contact the Department before they signed any contract for construction.
Mr. and Mrs. Rice signed a contract with Barney E. Seymour on September 29, 1982, to construct for them a three bedroom, two bath, brick veneer residence on their property, consisting of 1,731 square feet for $43,600. Article 4 of the agreement indicated the Department of Transportation was to pay
$22,760 upon completion of the construction. However, the Department was not a party to this contract, did not review it, approve it, or indicate concurrence. No representative from the Department was present when the contract was executed. Mr. and Mrs. Rice relied on the contractor to provide copies of the contract and the construction plans to the Department, and he delivered a copy of the contract and a set of the plans to the Department's office. However, the builder had no receipt or acknowledgment to show the date delivery was made.
Sometime during the first part of October, 1982, a representative of the
Department discussed with the builder on the telephone the matter of the amount of money the Department would pay to the Rices, but during this conversation, there was no discussion about the size of the dwelling or the type of the construction.
During the first part of November, 1982, the Department was provided with a copy of the contract between the Rices and the builder, and the plans for the dwelling. A review of these plans disclosed to the Department that there were 448 square feet of additional floor space in the replacement dwelling, and an additional bathroom, that were not in the acquired dwelling.
A revised Statement of Eligibility was computed on November 16, 1982, based on the square foot cost of the replacement dwelling. The amount of $400, shown as an estimate from a plumbing supplier in the plans, was subtracted from the contract price of $43,600, for the extra bathroom, leaving an amount of
$43,200. This was divided by the 1,731 square footage of the new house, amounting to a cost per square foot of $24.96. This square foot cost was multiplied by the additional 443 square feet, to establish an additional cost of
$11,182.08. This amount was subtracted from the contract price less the extra bathroom ($43,200) resulting in an amount of $32,017.92 allotted for the replacement dwelling. Additional allowable costs of $1,473.50 for a replacement lot and $312 for landscaping were added to $32,017.92, increasing this amount to
$33,803.42. Deducting the amount of the approved appraisal of the old Rice residence ($19,240) from $33,803.42 resulted in an adjusted entitlement of
$14,563.42 for replacement housing. The Rices executed the necessary documents, and they were paid this adjusted amount of eligibility.
Mr. Rice contends that he was due the full amount of $22,760 (the difference between the first comparable housing figure set at $42,000, and the approved appraisal figure of $19,240), and that after his payment of $14,563.42 he is still entitled to receive an additional $8,196.58.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this case, Section 120.57(1), Florida Statutes. The Department of Transportation is authorized to administer a Relocation Assistance Program, providing advisory services and payment benefits to persons displaced from their dwellings as a result of highway construction projects, pursuant to Section 14-15.05, Florida Administrative Code, Department of Transportation Right of Way Manual, Section 4.4.3A(2)(f)4., and Federal-Aid Highway Program Manual, Vol. 7, Chapter 5, Section 4, paragraph 5a(f)4.
Section 4.4.3A(2)(f)4., Department of Transportation Right of Way Manual provides in part:
. . . contracts for the construction of a new decent, safe, and sanitary dwelling on a site which he owns or acquires. The actual cost provision limits the reimbursable construction cost to only those costs necessary to construct a dwelling comparable to the one acquired. The cost of adding new features simply to bring the cost up to the maximum replacement housing payment is not eligible for reimbursement. (Emphasis added)
The Federal-Aid Highway Program Manual, Vol. 7, Chapter 5, Section 4, paragraph 5a(f)4 says the same thing.
Section 14-15.05, Florida Administrative Code, provides in part: This manual of Right of Way Bureau Operating
Procedures is hereby incorporated by this rule and made a part of the rules of this department. . .
Section 4.1.1G Department of Transportation Right of Way Manual provides in part:
Comparable Replacement Dwelling - a dwelling which is:
decent, safe and sanitary.
functionally equivalent and substantially the same as the acquired dwelling with respect to:
number of rooms,
area of living space,
type of construction, and
age
The definition of comparable replacement dwelling found on page 5 of the Department's Your Relocation pamphlet says substantially the same thing.
Mr. and Mrs. Rice entered into a contract with a builder for the construction of a replacement dwelling with a provision in this contract indicating the Department of Transportation was to pay the contractor $22,760 upon completion. The Department was not a party to the contract, was not given an opportunity to review the contract before its execution, did not approve the contract, sign it or initial it evidencing an obligation to pay the amount of
$22,760 upon completion of the Rice dwelling by the builder.
Mr. and Mrs. Rice could have purchased an existing replacement dwelling and utilized the initial Statement of Eligibility in the amount of
$22,760. However, they elected to construct a replacement dwelling, but were advised to contact the Department before they signed any contract for construction. This they did not do. A replacement dwelling can be constructed to duplicate the original dwelling, but where replacement housing is constructed with features and square footage in excess of the original dwelling, an allowance must be made for the additional features and square footage. The Department of Transportation can only reimburse ". . . those costs necessary to construct a dwelling comparable to the one acquired. . .", in compliance with the Department's Right of Way Manual. Consequently, the additional funds claimed by Mr. and Mrs. Rice cannot be paid.
Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Transportation enter its Order that the
proper amount for replacement housing benefits payable to Charles D. Rice and
Winnie R. Rice is $14,563.42, and disallowing their claim for an additional amount of $8,196.58.
DONE and RECOMMENDED this 16th day of June, 1983, in Tallahassee, Florida.
WILLIAM B. THOMAS
Filed with the Clerk of the Division of Administrative Hearings this 16th day of June, 1983.
Gary B. Lane, Esquire Post Office Box 12331 Pensacola, Florida 32581
Vernon L. Whittier, Jr., Esquire Haydon Burns Building, M.S. 58 Tallahassee, Florida 32301-8064
Paul A. Pappas, Secretary Department of Transportation Haydon Burns Building Tallahassee, Florida 32301
