I currently have two residential minimum compensation claims against a metro-area county that are very interesting as to how the county is approaching the acquisition of the two homes.
The two homes are located next door to each other and have very similar objective characteristics.
For House #1 the county based its offer to purchase solely upon the appraised value of the home and, as far as I can tell, did not perform a minimum compensation study. As part of its duties under the relocation regulations, the county did recognize that it was going to cost our clients more to purchase a comparable replacement dwelling than it offered to pay them for their home. However, the county informed our clients they could only make a claim for the increased cost to purchase a comparable replacement dwelling as a housing replacement payment under the relocation regulations. This means in order to get the additional compensation necessary to acquire a comparable replacement property, our clients would have spend the extra money to do so.
For House #2 the county based its offer to purchase upon the results of its minimum compensation study (as far as I can tell though, the county did not perform one), in which the county concluded it was going to cost our clients more to purchase a comparable replacement property than they would be paid for their home based upon the county's appraisal. Obviously, this is the exact opposite of what the county informed our clients that own House #1.
The importance of this distinction is that under Minnesota Statute 117.187, compensation based upon that statute is just another measure of damages like fair market value and does not require the property owner to actually purchase a comparable replacement property to receive compensation. This means the property owner can take that payment and purchase whatever kind of replacement property they would like (or no property at all if they so choose) whether it cost more or less than the comparable replacement property upon which their compensation was based. While compensation based upon the relocation regulations requires a displaced homeowner to actually purchase a new home worth at least as much as the comparable replacement property identified by the acquiring authority to receive a housing replacement payment.
Based upon my interpretation of Minnesota Statute 117.187, because it is going to cost both of our clients more to purchase a comparable replacement property than what they would be paid based upon the appraisals, the county should have made offers to both clients based upon the cost to purchase comparable replacement properties.
Does anyone have a reasonable explanation why the county would choose to follow Minnesota Statute 117.187 in one residential case, but do the exact opposite of that procedure for their next door neighbor?
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