§ 151.4. Moving and related expenses.
The following provisions shall govern the award of moving expenses and damages:
(1) An acquiring agency may adopt the moving expense allowance schedule of the Department of Transportation of the Commonwealth for the purposes of section 601-A(a)(2) of the act (26 P. S. § 1-601A(a)(2)).
(2) Damages payable under section 601-A(a) of the act (26 P. S. § 1-601A(a)) are attributable to personal property which a displaced person moves from the acquired premises.
(i) The distance of a move of 50 miles or less shall be presumed to be reasonable.
(ii) A displaced person shall have the burden of proving the reasonableness of a move of more than 50 miles.
(3) Damages payable under section 601-A(b)(1) and (2) of the act (26 P. S. § 1-601A(b)(1) and (2)) are ordinarily attributable to personal property which a displaced person does not move from a business or farm which is acquired or dislocated.
(i) A displaced person may claim damages for some items of personal property based on the cost which would have been incurred if the property had been moved and damages for other items based on their value in place, but only if the latter items cannot be moved without substantially destroying or diminishing their value, whether because of the unavailability of a comparable site for relocation or otherwise, or without substantially destroying or diminishing their utility in the relocated business or farm operation.
(ii) If the displaced person chooses to forego damages under section 601-A(b)(1) of the act (26 P. S. § 1-601A(b)(1)), he may claim damages for the unmoved personal property under section 601-A(b)(2) of the act (26 P. S. § 1-601A(b)(2)) determined as follows:
(A) The displaced person has the responsibility of selling the personal property at a commercially reasonable public or private sale, which sale may not be held until after 60 days notice to the acquiring agency.
(B) The original cost of each item of personal property is compared with the cost of replacing it with equivalent property in the marketplace to determine which is the lower figure.
(C) The net sale proceeds are subtracted from the sum of the lower figures determined in clause (B).
(D) The total damages payable under this subsection is the lesser of 1/2 of the result derived from the procedures set forth in clause (C) or $10,000.
(iii) Personal property for which damages are paid under section 601-A(b)(1) of the act (26 P. S. § 1-601A(b)(1)) becomes the property of the acquiring agency and may be disposed of by the acquiring agency by sale or otherwise.
(iv) Where actual direct losses with reference to personal property are measured by the reasonable expenses which would have been required to relocate the personal property, payment will not exceed the replacement cost of equivalent property, taking into consideration the age and condition of the property.
(4) Damages under section 601-A(b)(3) of the act (26 P. S. § 1-601A(b)(3)) are payable to a displaced person whose business cannot be relocated without a substantial loss of existing patronage, based on a consideration of pertinent circumstances including the factors as the type of business conducted, the nature of the clientele and the relative importance to the displaced business of its present and proposed location.
(i) To be eligible for payment under this section, the business shall contribute materially to the income of the displaced owner.
(ii) Separate legal entities will not each be entitled to a payment under this subsection, if they actually constitute only one business. In determining whether two or more legal entities constitute a business, the following factors, among others, shall be taken into consideration:
(A) The extent to which the same premises and equipment are shared.
(B) The extent to which substantially identical or intimately interrelated business functions are pursued and business and financial affairs are commingled.
(C) The extent to which the entities are held out to the public, and to those customarily dealing with the entities, as one business.
(D) The extent to which the same person or closely related persons own, control or manage the affairs of the entities.
(iii) In the case of a nonprofit organization, the term ‘‘existing patronage’’ includes the membership persons, community and clientele served or affected by the activities of the nonprofit organization.
(iv) To be eligible for payment under section 601-A(b)(3) of the act (26 P. S. § 1-601A(b)(3)) a business shall occupy the premises from which it is displaced.
(A) [Reserved].
(B) Payment to an owner-occupant under section 601-A(b)(3) of the act (26 P. S. § 1-601A(b)(3)) shall be calculated on the basis of the fair monthly rental value of the portion of the premises occupied by the owner-occupant and used for business purposes. No payment will be made for the portion of the premises rented to one or more tenants.
(C) Payment to a tenant under section 601-A(b)(3) of the act (26 P. S. § 1-601A(b)(3)) shall be calculated on the basis of the rental being paid by the tenant for the portion of the premises occupied and used for business purposes by the tenant. No payment will be made for the portion of the premises rented to one or more subtenants.
(v) To be eligible for payment under this subsection, a displaced person shall make available to the acquiring agency copies of applicable Federal, State and local tax returns, and shall allow the acquiring agency to examine applicable books and records.
(vi) In the case of a business which relocates, loss of existing patronage shall be determined by comparing the average net earnings at the new location during a period of at least 6 months with the average net earnings during the 2 taxable years immediately preceding the taxable year in which the business is dislocated, or the applicable period provided for in paragraph (6).
(vii) In calculating damages according to the rental formula, the cost or value of utilities, such as heat, electricity, gas, water and sewer, shall be excluded from rental or rental value.
(5) A displaced farm operation is eligible for damages under section 601-A(b)(3) of the act (26 P. S. § 601A(b)(3)) if:
(i) The farm operator has discontinued (or relocated) his entire farm operation at the acquired property.
(ii) In the case of a partial taking, the property remaining after the acquisition is no longer capable of supporting a farm operation having substantially the same economic production.
(6) In determining whether damages are payable under section 601-A (b)(3) of the act (26 P. S. § 1-601A(b)(3)) and the amount of the damages, a period other than the 2 years immediately preceding the taxable year in which a business or farm operation moves from the acquired property may be used to determine the existing patronage and average annual net earnings of the business or farm operation in the following circumstances:
(i) If a business or farm has not been in continuous operation at the acquired property for 2 full years immediately preceding the taxable year in which the business or farm operation moves therefrom, but has been in continuous operation there for at least 1 year, the existing patronage and average annual net earnings may be determined by dividing the existing patronage and net earnings for the lesser period by the number of months in the period and multiplying the quotient by 12.
(ii) If, due to the general knowledge of the imminence of condemnation, the existing patronage and average annual net earnings of the business or farm operation were substantially lower than normal during the 2 years immediately preceding the taxable year in which the business or farm operation moves from the acquired property, the existing patronage and average annual net earnings shall be based on the 2 years immediately preceding the taxable year in which knowledge of the imminence of condemnation became general. If the business or farm was not in operation at the acquired property for 2 full years preceding the latter taxable year, but was in continuous operation there for at least 1 year, the existing patronage and average annual net earnings shall be determined by dividing the earnings for the lesser period by the number of months in the period and multiplying the quotient by 12.
(iii) If a business or farm operation was damaged by fire, flood or other disaster, whether natural or otherwise, in the 2-year period immediately preceding the taxable year in which the business or farm operation moved from the acquired property, the existing patronage and average net earnings shall be based on the 2 years immediately preceding the year of the disaster.
(7) The burden of reasonableness shall be met in accordance with the following:
(i) In proving damages for reasonable expenses incurred in searching for a replacement business or farm under section 601-A(b)(4) of the act (26 P. S. § 1-601A(b)(4)), a displaced person shall have the burden of proving the reasonableness of expenses in excess of $500, and of expenses incurred in searching more than 50 miles from the acquired property. The owner of a displaced advertising sign shall have the burden of proving the reasonableness of expenses in excess of $100 incurred in searching for a single replacement site, and in excess of $500 incurred in searching for replacement sites for signs displaced by a single project.
(ii) Eligible expenses under section 601-A(b)(4) of the act (26 P. S. § 1-601A(b)(4)) include transportation expenses, meals, lodging away from home, and the reasonable value of time actually spent in search, including the fees of real estate agents or real estate brokers. Expenses claimed except the value of time actually spent in search shall be supported by receipted bills. Payment for time actually spent in search shall be based on the applicable hourly wage rate for the person conducting the search, but may not exceed $10 per hour.
(8) Reasonable costs incurred in adapting a replacement business property for the installation of machinery, equipment and fixtures necessary for the operation of the displaced business in order to conform to health, safety or other legal requirements are reimbursable as moving expenses under section 601-A(a) of the act (26 P. S. § 1-601A(a)) if the acquired business property was not required to and did not conform to the requirements and damages were not paid to the owner or tenant of the acquired property based on a nonconforming use.
Source The provisions of this § 151.4 amended through June 20, 1980, effective June 21, 1980, 10 Pa.B. 2462. Immediately preceding text appears at serial pages (18861) and (23367).
Notes of Decisions Dislocation Damages
The period relevant for the determination of whether a substantial loss of existing patronage occurred is not the calendar year of the relocation, but rather a period of at least six months at the new location; and, if the business enjoyed an increase in net earnings during that period, dislocation damages cannot be awarded. Eisenberg v. Redevelopment Authority, 386 A.2d 163 (Pa. Cmwlth. 1978).
When the only ‘‘loss’’ suffered by relocation of a business was that of specific individual customers who were immediately replaced in greater numbers by other customers at the new location, there was no loss in earnings upon dislocation and the business is not entitled to dislocation damages. Neumann v. Department of Transportation, 372 A.2d 1240 (Pa. Cmwlth. 1977).
Moving Expenses
A horse business and a hay growing and cattle operation constitute only one business for moving expense purposes if the same persons own, control and manage both businesses, the same land was shared by both businesses, the income from both businesses was reported in combined form on federal income tax returns, the income and expenses of both businesses were credited and debited to the same account, the horse business was the only one held out to the public, and the hay was grown to feed the horses while the cattle were raised mostly for the personal use of the owners. Baker v. County of Allegheny, 412 A.2d 190 (Pa. Cmwlth. 1980).
Occupancy
Occupancy requires more than mere right to possess or control property.—the right must actually be exercised. Redevelopment Authority v. Stepanik, 360 A.2d 300 (Pa. Cmwlth. 1976).
Owner-Occupant
A property owner rented out part of the property as apartments, but had a bar and restaurant in part of the property, from which he lived upstairs, he was properly awarded business location damages, since such damages were based only on that portion of the property for which the owner qualified as an ‘‘owner-occupant’’ Redevelopment Authority v. Legosh, 394 A.2d 1089 (Pa. Cmwlth. 1978).
Relocation Damages
Tax returns for the two years immediately before and for one year immediately following the relocation of a business were admissible to prove that the business had prospered by the relocation and was not entitled to relocation damages. Neumann v. Department of Transportation, 372 A.2d 1240 (Pa. Cmwlth. 1977).
Search Expenses
Search expenses may be justified by production of a list of places visited, the distances traveled, and the dates of visits, and, if an hourly wage rate is not applicable, a daily wage rate may be substituted. Baker v. County of Allegheny, 412 A.2d 190 (Pa. Cmwlth. 1980).
If a condemnee occupies the property condemned both as a residence and as a place of business and suffers damages in the condemnation, the condemnee may be eligible for damages related to each aspect of the dislocation. If the unit occupied by the condemnee is a place of business and if the fair monthly rental value of that unit is in excess of $2500, the condemnee would be eligible for the $10,000 maximum amount of special dislocation damages allowed by 26 P. S. § 1-601A(b)(3). Department of Transportation v. Gaylor, 448 A.2d 656 (Pa. Cmwlth. 1982).
Validity
The provisions of 37 Pa. Code § 151.4 (relating to moving and related expenses) are valid since it complies with the intent of the Legislature, as expressed in 26 P. S. § 1-601A(b)(3), to deny special dislocation damages to landlords not physically occupying the premises condemned. Redevelopment Authority v. Stepanik, 387 A.2d 1292 (Pa. 1978).
The provisions of 37 Pa. Code § 151.4 (relating to moving and related expenses), formerly § 103.4(d) of the Uniform Relocation Assistance Regulations, was held to be consistent with 26 P. S. § 1-601A(b)(3), and not to be in derogation of an owner’s statutory rights in the determination of dislocation allowances. Redevelopment Authority v. Stepanik, 360 A.2d 300 (Pa. Cmwlth. 1976).
Cross References This section cited in 37 Pa. Code § 151.3 (relating to scope of recoverable damages).
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