The Importance Of Clearing Title For Public Acquisitions

When public agencies acquire property for future public projects, many times they are only focused on negotiating the acquisition price with the property owner. If an acquisition price can be agreed upon voluntarily, eminent domain can be avoided. But focusing solely on negotiations with the property owner can lead to surprises and exposure on total compensation that may be due to other parties. A recent article in the Riverside Record, RUSD Agrees To Pay Nearly $1M To Relocate Cellphone Tower, serves as an important reminder for agencies that they must carefully review title reports and gain an understanding of other unrecorded interests, such as leases, in evaluating total costs. 

The article indicates that Riverside Unified School District negotiated a purchase of vacant land for a new elementary school, but after the acquisition and when the District was getting ready to start construction, it realized there was a cell phone tower lease on the property that runs for another 19 years that would conflict with the new school buildings. While the District explored use of eminent domain to terminate the cell phone tower lease, the process would take a substantial amount of time, thereby delaying construction of the new school, and the District would still be exposed to paying significant compensation. Left with few options, the District is now agreeing to pay nearly $1 million to temporarily relocate the cell phone tower and then move it to another location on the new school site. If the District had done its due diligence before the acquisition, it likely would have uncovered this long-term lease, and could have considered how the lease impacted the overall compensation that would be owed (along with the project’s construction schedule). 

Similar situations happen with other types of leases, whether for traditional businesses or billboards. And if a public agency decides to displace or otherwise impact a business for a public project, tenants or occupants are entitled to seek relocation benefits, loss of business goodwill, and compensation for improvements pertaining to realty, furniture, fixtures and equipment (FF&E), and leasehold bonus value. Cell phone towers and billboards are notoriously difficult to relocate, and can therefore create substantial cost exposure or delays. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.