If an Acquiring Authority Performs a Minimum Compensation Study is it Required to Provide a Copy of that Study to the Property Owner

As I mentioned in one of my prior posts we had two cases involving total acquisitions of neighboring residential parcels in the metro area. In both of those cases the acquiring authority performed minimum compensation studies on the properties, but refused to provide copies of those studies to the property owners. The reason given by the acquiring authority was that unlike Minnesota Statute 117.036, which requires it to provide a copy of its appraisal upon which its offer was based, Minnesota Statute 117.187 does not require it to disclose the results of its minimum compensation study.

The position taken by the acquiring authority in those two cases raises the issue of whether an acquiring authority is required to provide a copy of its minimum compensation study to a property owner.

Unfortunately, Minnesota Statute 117.187 is silent on this particular issue. However, there is guidance in Minnesota Statute 117.036, Subd. 3, which would seem to indicate that an acquiring authority as part of the negotiation process should provide a copy of all sources of relevant information to the property owner so that person may make an informed decision regarding the taking of their property.

Minnesota Statute 117.036, Subd. 3 requires that prior to "commencing an eminent domain proceeding, the acquiring authority must make a good faith attempt to negotiate personally with the owner of the property in order to acquire the property by direct purchase instead of the use of eminent domain proceedings." That subdivision goes on further to require that as part of the negotiation process the acquiring authority "must consider the appraisals in its possession, including any appraisals obtained and furnished by the owner if available, and other information that may be relevant to a determination of damages under this chapter."

As we know, like the traditional valuation methods, minimum compensation is just another way to calculate the damages a property owner will suffer as a result of the taking of their property. Specifically, Minnesota Statute 117.187 indicates that "[w]hen an owner must relocate, the amount of damages payable, at a minimum, must be sufficient for an owner to purchase a comparable property in the community . . . ."

Despite the fact that Minnesota Statute 117.187 does not require the disclosure of any minimum compensation studies obtained by an acquiring authority, it would be very difficult to believe that it would be an act of good faith under Minnesota Statute 117.036, Subd. 3, for an acquiring authority to disclose a copy of its appraisal to the property owner, but not disclose a copy of its minimum compensation study. If a property owner cannot evaluate an acquiring authority's minimum compensation study like it can the appraisal, it would seem that this would preclude the property owner from being able to make an informed decision regarding the negotiated acquisition of their property, may actually delay the sale of the property and may even result in more cases being forced into litigation. Clearly, such an outcome would be contrary to the purposes of Minnesota Statute 117.036, which are to prevent the old trial by ambush when neither party was required to share a copy of their appraisals prior to the commissioners' hearings and to discourage the use of condemnation proceedings by encouraging good faith negotiated acquisitions.

If certain acquiring authorities continue to refuse to share copies of their minimum compensation studies in order to hide the ball from the property owner, it will only be a matter of time until a property owner files a motion to compel disclosure, or some other similar motion, and the courts will be forced to address this issue.

Has anyone out there had any similar experiences or thoughts on how Minnesota Statute 117.036, Subd. 3, affects the disclosure of minimum compensation studies.