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Real Estate FAQ
- Why do you want my property and not my neighbor's?
- When will I know if my property is needed?
- What are the advantages of selling my property to the state?
- Will I receive a fair price for my property?
- Will you reimburse me if I hire my own experts to evaluate your offer?
- Will I have to pay income tax on my sale to the state?
- What about outstanding loans on my property?
- What if the project renders my remaining property non-conforming with local zoning ordinances?
- What about VA loans?
- If my mortgage includes a prepayment penalty clause, must I pay the penalty?
- If my property is enrolled in The Farmland and Open Space Program (P.A. 116), will I be penalized?
- Can I be sure that suitable replacement housing will be available to me before I must move from my present home?
- Who is eligible to receive relocation payments?
- How soon must I occupy a replacement dwelling in order to receive my relocation benefits?
- How long do I have to claim my replacement housing payment, and how much will I receive? May I appeal if I disagree?
- Will the court consider the replacement housing payment in the condemnation proceedings?
- If my property is condemned and the state takes possession before the case is settled, can I receive relocation payments?
- May I receive benefits if I go out of business?
- May I keep my home buildings and remove them from the site?
- Why must MDOT examine my property for environmental contamination? What if contamination is found?
1. Why do you want my property and not my neighbor's?
Answer: Before selecting a location for a proposed transportation improvement, the Michigan Department of Transportation evaluates a wide variety of factors, including:
- population and patterns of development
- projected traffic patterns
- economic impact
- wetlands and environmental impact
- relation to the other transportation corridors and the overall system
Based on our studies and reliable facts, we select the best location for the proposed transportation improvement.
2. When will I know if my property is needed?
Answer: The Michigan Department of Transportation (MDOT) will advise you well in advance of actual negotiations, through public hearings and personal visits. Do not act on rumors. Be sure you have the facts from MDOT.
MDOT will usually take possession within 30 to 90 days after your check has been delivered and the deed is executed.
3. What are the advantages of selling my property to the state?
Answer: You will receive fair market value established by a licensed appraiser.
- You will receive cash.
- You will not pay a sales commission.*
- You will not pay the real estate transfer tax.
- You will not pay for title insurance or abstract costs.
- The Michigan Department of Transportation will pay closing costs in connection with the sale of your property.
- You will receive a pro-rated refund of your most recent year's paid property taxes.
* You may owe a commission if your home is listed with a Realtor at the commencement of negotiations.
If you are required to relocate :
- You will receive relocation assistance.
- You are assured of being able to relocate into housing that meets local codes and ordinances.
- You may receive a supplemental payment to relocate into comparable housing.
- You will receive personal property moving costs.
- You may receive an interest differential payment on your replacement mortgage if the interest rate is higher.
- You may be reimbursed for closing costs for the purchase of your replacement dwelling.
4. Will I receive a fair price for my property?
Answer:You are entitled to receive fair market value. To determine this value, appraisers employed or contracted by the Michigan Department of Transportation (MDOT) make a thorough study of the surrounding neighborhood and of local and general economic facts. They consider the highest and best use of the property. The value is based on comparison of your property with other properties recently sold in your area. The result is carefully reviewed to ensure that it meets state and federal requirements and acceptable appraisal standards.
In addition, if your principal residence is acquired, you will receive 125% of its fair market value, plus a property tax exemption reimbursement.
Are improvements considered in the appraisal?
Yes. You should inform the appraiser of all improvements to your property.
Filing a claim
If you believe MDOT's offer does not include everything for which you are entitled to be paid, you may submit a written claim. You must submit your claim within 90 days after the written good faith offer is made, or 180 days after the condemnation complaint is served, whichever is later.
Information requests from MDOT
It may be necessary to obtain from you certain financial information to help the appraiser determine fair market value. This information will remain confidential, except to the extent that it is used in determining just compensation, in legal proceedings, or as provided by court order. You will be reimbursed actual and reasonable copying costs, plus up to $1000 in other actual and reasonable costs incurred in responding to the MDOT request.
5. Will you reimburse me if I hire my own experts to evaluate your offer?
Answer: Reasonable costs and fees may be reimbursed, as provided by law.
6. Will I have to pay income tax on my sale to the state?
Answer: This is a highly technical question. You should contact the Internal Revenue Service or a tax consultant for specific details.
7. What about outstanding loans on my property?
Answer: You remain responsible for these obligations. They will be deducted from the compensation you receive from the department.
8. What if the project renders my remaining property non-conforming with local zoning ordinances?
Answer: You may be asked to cooperate with the Michigan Department of Transportation in seeking a zoning variance. If a variance cannot be obtained, this fact will be considered in determining your compensation.
9. What about VA loans?
Answer: The Veterans Administration recognizes that the sale of your property to the state is not of your choosing. Your VA loan privileges continue and can be applied to another property.
10. If my mortgage includes a prepayment penalty clause, must I pay the penalty?
Answer: As a general rule, no. Since the negotiated sale of your property to the Michigan Department of Transportation (MDOT) is considered an involuntary sale, mortgage companies will usually waive the penalty for paying your loan in full as a result of the sale. If you do have to pay a penalty, it is reimbursable by MDOT.
11. If my property is enrolled in The Farmland and Open Space Program (P.A. 116), will I be penalized?
Answer: If the release is granted as a public necessity for a transportation project, the property owner will not be required to pay a penalty.
12. Can I be sure that suitable replacement housing will be available to me before I must move from my present home?
Answer: Yes. The Uniform Relocation Act provides that the Michigan Department of Transportation must offer you suitable replacement housing before it can issue you a notice to vacate.
13. Who is eligible to receive relocation payments?
Answer: There are several types of relocation benefits for which you may be eligible:
- Payments to cover moving costs
Any owner or tenant whose personal property must be moved because of a transportation project is eligible for a reimbursement of moving costs.
- Purchase down payment
This money must be spent on a replacement house. You are eligible if you are either: a tenant-occupant of more than 90 days, or an owner-occupant of more than 90 days but less than 180 days prior to the first written offer, and you purchase a new home. (Homeowners who have lived in their homes 180 days or more are eligible for a replacement housing supplement instead.)
- Replacement housing supplement
An owner who has owned and occupied the property for at least 180 days prior to the beginning of negotiations may qualify for a supplemental housing payment.
14. How soon must I occupy a replacement dwelling in order to receive my relocation benefits?
Answer: Owners must occupy a decent, safe, and sanitary replacement dwelling within one year of the date that final payment is received for the state-acquired property or, in a condemnation case, one year after the estimate of just compensation is deposited. Tenants must occupy a decent, safe, and sanitary replacement dwelling within one year of the date that they move from the state-acquired dwelling. This time period may be extended for just cause.
15. How long do I have to claim my replacement housing payment, and how much will I receive? May I appeal if I disagree?
Answer: Owners must file their claims within 18 months of either the date they move or the date of final payment for the state-acquired dwelling, whichever is later. Tenants must file all claims within 18 months of the date they move from the state-acquired property.
The acquisition agent for the Michigan Department of Transportation (MDOT) will provide a written determination of your maximum payment. It is based on comparable homes available for purchase on the open market.
If you disagree with the agent's finding, you may appeal in person or in writing to the regional real estate agent. Further, you may appeal to the director of MDOT if you still disagree with the regional determination.
16. Will the court consider the replacement housing payment in the condemnation proceedings?
Answer: A housing supplement is not covered in the property condemnation law and cannot be litigated under this law.
17. If my property is condemned and the state takes possession before the case is settled, can I receive relocation payments?
Answer: Yes. You will receive the amount of the state's offer at the time the state takes possession of your property and your relocation payments after you move into your replacement site.
18. May I receive benefits if I go out of business?
Answer: Yes. You may be eligible to receive a payment, based on your net income (or gross revenue less administrative costs for non-profit organizations), in lieu of all other moving allowances.
19. May I keep my home buildings and remove them from the site?
Answer: Yes, providing arrangements are made at the time the Option to Purchase Land is signed. A salvage value will be determined for the structure you wish to keep, and this amount will be deducted from the compensation. Additionally, a site clearance deposit will be held out of the compensation until the buildings are removed and all provisions of the Option to Purchase Land are met.
Buildings must be removed within 30 to 90 days after closing with the Michigan Department of Transportation, unless other terms are specifically agreed upon.
Buildings you do not keep may be advertised and sold at public auction.
20. Why must MDOT examine my property for environmental contamination? What if contamination is found?
Answer: The Michigan Department of Transportation (MDOT) is required by state law to investigate all properties that it acquires for possible contamination. This does not mean your property is suspected of being contaminated. It merely means MDOT is fulfilling its obligation under state law.
If contamination is found, the property owner is required by law to report it to Michigan Department of Environmental Quality (MDEQ). MDOT will supply the property owner with complete information, and allow the property owner time to notify MDEQ. If the property owner does not contact MDEQ, MDOT will notify MDEQ of its findings.
If contamination is found, will I be forced to pay for clean-up?
This is a complicated question. The question of your liability for contamination is governed by state and federal environmental laws. In general, under state law, if you did not cause the contamination, you are not liable for it.
What if I refuse to allow MDOT to test my property?
MDOT may seek a court order under Act 87 to conduct an environmental inspection on the property.