accompany each appraiser during his inspection of the property;

(3) A statement that if the acquisition of any part of real property would leave the owner with an uneconomic remnant as defined in § 42.135(g) the State agency will offer to acquire the uneconomic remnant;

(4) A statement that if the owner is not satisfied with the State agency's offer of just compensation, he may refuse to accept it and that if he can provide evidence concerning value or damage that warrants a change in the State agency's determination of just compensation, the price will be adjusted accordingly, and that if a voluntary agreement cannot be reached, the State agency will institute a formal condemnation proceeding against the property, depositing in the court the full amount of the State agency's estimate of just compensation;

(5) A statement identifying settlement and related costs that will be paid by the State agency;

(6) A statement that construction or development of a project shall be so scheduled that no person lawfully occupying real property shall be required to move from a dwelling (assuming a replacement dwelling as required by § 42.120(a) will be available) or to move his business or farm operation, without at least 90 days' written notice from the State agency of the date by which such move is required: Provided, That shorter notice may be given where HUD determines that such 90-day notice is impracticable.

(7) A statement that if arrangements are made to rent the property to an owner or his tenant for a short term or for a period subject to termination by the Agency on short notice, the rental will not exceed the lesser of:

(i) The fair rental value of the property to a short-term occupier;

(ii) The pro rata portion of the fair rental value for a typical rental period;

or

If the owner or his tenant is an occupant of a dwelling, the rental for such dwelling shall not exceed twenty-five (25) percent of his income.

§ 42.138 Notice of State agency's determination not to acquire.

Whenever a State agency which has issued a written notice of its intent to acquire, or a firm offer to acquire, subsequently determines not to acquire said property, the State agency shall serve a notice in writing, return receipt requested, on the owner, all persons occupying the property and any other person potentially eligible for relocation payment and assistance. This notice shall state that the State agency has determined not to acquire the property and that any person moving from the premises thereafter will not be eligible for relocation payments and assistance. This notice shall be served no later than 10 days from the date of the State agency's determination not to acquire.

§ 42.140 Payments-expenses incidental to transfer of title.

(a) General. The State agency, as soon as practicable after the date of payment of the purchase price or the date of deposit in court of funds to satisfy the award of compensation in a condemnation proceeding to acquire real property, whichever is earlier, shall reimburse the owner, to the extent the State agency deems fair and reasonable, for expenses such owner necessarily incurred for:

(1) Recording fees, transfer taxes, and similar expenses incidental to conveying such real property to the State agency;

(2) Penalty costs and other charges for prepayment of any preexisting recorded mortgage entered into in good faith encumbering such real property; and

(3) The pro rata portion of real property taxes paid and other charges for public services such as water, sewerage and trash collection, which are allocable to a period subsequent to the date of vesting of title in the State agency, or the effective date of possession of such real property by the State agency, whichever is earlier.

(b) Documentation in support of a claim. If real property is acquired by condemnation, a claim for payment under paragraph (a) of this section shall be submitted to the State agency

and supported by such documentation as may be required by the State agency. If the real property is acquired by purchase, payment shall be made at settlement of the acquisition and accounted for in the settlement statement, on the basis of such documentation as may be required by the State agency.

(c) Time for filing claims. Each such claim shall be submitted to the State agency within a period of six months after the acquisition of the property.

§ 42.141 Statement of settlement cost.

A Statement of Settlement Cost shall be prepared and furnished to the owner at the settlement of the acquisition, or as soon as feasible after the award of the judgment in a condemnation proceeding. The Statement shall itemize all settlement costs regardless of whether they are actually paid at, before, or after the closing, and shall clearly separate charges paid by the owner. The Statement shall be dated and certified as true and correct by the closing attorney or other person handling the transaction.

§ 42.145 Payments-litigation expenses.

(a) General. The State agency shall reimburse the owner of any real property for the owner's reasonable costs, disbursements, and expenses of litigation, including attorney, appraisal, and engineering fees, actually incurred because of condemnation proceedings, if:

(1) In a condemnation proceeding instituted by the State agency to acquire such real property for a project, the final judgment of the court having jurisdiction over such proceeding is that the State agency cannot acquire the real property by condemnation; or

(2) Such proceeding is abandoned by the State agency other than pursuant to an agreed-upon settlement of the proposed acquisition of the property by direct purchase; or

(3) A court of competent jurisdiction renders a judgment in favor of the owner as plaintiff in an inverse condemnation proceeding or the State agency effects a settlement of such proceeding.

(b) Limitations. No payment under paragraph (a) of this section shall be

made unless the State agency is satisfied that the costs involved are reasonable and directly and necessarily related to such condemnation proceedings.

(c) Documentation in support of a claim. A claim for a payment under paragraph (a) of this section shall be submitted to the State agency and supported by such documentation as may be required by the State agency.

(d) Time for filing claims. Each claim shall be submitted to the State agency within a period of six months after final judgment in accordance with paragraph (a)(1) or (3) of this section, or the abandonment of a condemnation proceeding by a State agency, whichever is applicable.

§ 42.150 Effect upon property acquisition.

(a) The provisions of this Subpart D create no rights or liabilities and shall not affect the validity of any property acquisitions by purchase or condemnation.

(b) Nothing in these regulations shall be construed as creating in any condemnation proceedings brought under the power of eminent domain any element of value or of damage not in existence immediately prior to January 2, 1971, the date of enactment of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970.

Subpart E-Administration

§ 42.155 Purpose.

The purpose of this Subpart is to set forth the provisions relating to the overall administration of the regulations in this Part.

§ 42.160 Schedules of prices of comparable replacement dwellings.

In cases in which a State agency determines that the use of a schedule is desirable, it may make use of schedules of representative price ranges of comparable replacement dwellings in the locality. Such schedules shall be used for determining the amount of replacement housing payments under §§ 42.90(a)(1) and 42.95(a)(2) and a separate schedule shall be used for determining the amount of payments under § 42.95(a)(1) of this Part. The sched

ules shall be consistent with the regulations in § 42.120 of this Part; shall be kept current; shall, to the maximum extent possible, reflect the costs set forth in schedules used by other State agencies in the locality; and shall be available in written form to all persons in the office of the State agency. If there is an insufficient supply of comparable replacement housing meeting the definition of § 42.20(b), new, rehabilitated or more recently constructed housing, including publicly assisted housing, shall be used in developing the schedules.

§ 42.165 Notice to persons in project area.

The State agency shall furnish, at the earliest possible date, to all persons who own or occupy property within a project area (or the area of the federally-assisted activities) and who are anticipated to be displaced, a notice or information statement (not a notice of intent to acquire as described in § 42.136 of the regulations in this Part) advising them of (a) the availability of payments under these regulations to eligible persons, (b) the office where the conditions under which such payments will be made are available for inspection, (c) the earliest date on which such person may move and still qualify as a displaced person, (d) the availability of the grievance procedures appearing at Subparts F and G of this Part, and (e) such other information as may be required by HUD. The State agency shall take reasonable steps to publicize this information in language(s) and in a fashion most likely to be understood by the persons to be affected, such as by using the local media, posters in public places and other forms of public communication.

§ 42.166 Manner of notice.

Any notice required by this Part shall be personally serviced or sent by certified or registered first-class mail (return receipt requested).

§ 42.170 Review of claims.

The State agency is initially responsible for determining the eligibility of a claim for, and the amount of, any payment under the regulations in this

Part and shall maintain in its files complete and proper documentation including HUD concurrences where required supporting the determination. The determination on each claim shall be made or approved either by the governing body of the agency or by the principal executive officer of the agency or his duly authorized desig

nee.

§ 42.175 Prompt payment; advances.

A payment shall be made by the State agency as promptly as possible after a person's eligibility has been determined in accordance with the regulations in this Part. Advance payments may be made in hardship cases where the State agency determines such advances are appropriate under the regulations in this Part.

§ 42.180 Accounts and records.

Accounts and records shall be subject to inspection or audit at all reasonable times by HUD. Records pertaining to eligibility for payment, inIcluding all claims, receipted bills, or other documentation in support of a claim, and records pertaining to action on a claim, shall be retained by the State agency for not less than 3 years after the completion of the project; or, in the case of the community development block grant program, not less than 3 years after the receipt by a displaced person of final payment pursuant to the regulations in this Part. Timely and complete reports shall be submitted in accordance with HUD requirements.

§ 42.185 Payments not to be considered as income.

No payment received under Subpart B of these regulations by a displaced person shall be considered as income for the purposes of the Internal Revenue Code of 1954; or for the purposes of determining the eligibility or the extent of eligibility of any person for assistance under the Social Security Act or any other Federal law.

§ 42.190 Displacement in connection with more than one project.

No person shall be entitled to more than one payment under each of

§§ 42.65-42.95 and §§ 42.140 and 42.145 on account of a single displacement or a single acquisition, notwithstanding that the displacement or acquisition is in connection with more than one Federal or federally-assisted project.

§ 42.195 Policies and requirements of HUD.

All determinations or other actions by the State agency provided for under the regulations in this part shall be undertaken in accordance with the policies and requirements of HUD as issued from time to time.

§ 42.200 Waivers.

A waiver of any section of these regulations not required by law may be authorized only with respect to a particular claim and by the Secretary of Housing and Urban Development or his authorized designee after such claim has been reviewed by HUD: Provided, That the limitations provided in §§ 42.60, 42.140 and 42.145 with respect to the time of filing of claims may be waived by the State agency for good

cause.

Subpart F-Grievance Procedure Relating to Claims and Payments

SOURCE: 38 FR 5169, Feb. 26, 1973, unless otherwise noted.

§ 42.220 Purpose.

The purpose of this subpart is to set forth the guidelines for processing appeals from State agency determinations as to eligibility for, or the amount of, a payment made under the regulations in Subpart B and §§ 42.140 and 42.145 of Subpart D, State agencies shall establish in Subpart B and §§ 42.140 and 42.145 of Subpart D. State agencies shall establish procedures to implement the regulations in Subpart B and §§ 42.140 and 42.145 of Subpart D. The State agency's procedures may include provisions not included in these procedures provided they are not inconsistent with the procedures contained herein.

[38 FR 5169, Feb. 26, 1973, as amended at 38 FR 25172, Sept. 12, 1973; 39 FR 28151, Aug. 5, 1974]

§ 42.225 Right of review.

Any claimant, meaning a person aggrieved by a determination as to eligibility for, or the amount of, a payment under the regulations in this part, may have his claim reviewed and reconsidered by the head of the State agency or his authorized designee (other than the person who made the determination in question) in accordance with the procedures set forth in this subpart, as supplemented by such procedures as the State agency shall have established for such review and reconsideration. Where such a person is not satisfied with the State agency's determination after such review and reconsideration, he is entitled to review of his claim by HUD. Any person or class of persons may similarly seek review and revision of any schedule with respect to payments under the regulations in this part. All the provisions of this subpart shall be fully applicable to such claims for review and revision of any schedule with respect to payments under the regulations in this part.

§ 42.230 Notification to claimant.

If the State agency denies the eligibility of a claimant for a payment or disapproves the full amount claimed or refuses to consider the claim on its merits because of untimely filing or any other ground, the State agency's notification to the claimant of its determination shall inform the claimant of its reasons therefor and shall also inform the claimant of the applicable procedures for obtaining State agency and HUD review of this determination.

§ 42.235 Request for State agency review.

(a) General. Any person who has a right to seek review pursuant to § 42.225 may, within the time limit specified in paragraph (d)(1) of this section, request the State agency to provide him with a full written explanation of its determination and the basis therefor if he feels that the explanation accompanying the payment of his claim or notice of the agency's determination was incorrect or inadequate. The State agency shall provide such an explanation to the claimant

within 15 days of is receipt of claimant's request.

(b) Informal presentation. Upon request of the claimant, within the time limit specified in paragraph (d)(1) of this section, the State agency shall, within 15 days of the request, afford him an opportunity to make an oral presentation prior to filing a written request for review pursuant to paragraph (c) of this section. The claimant may be represented by an attorney or other person of his choosing. This oral presentation shall enable the claimant to discuss his claim with the head of the State agency or a designee (other than the person who made the initial determination) having the authority to revise the initial determination on the claim. The State agency shall make a summary of the matters discussed in the oral presentation and it should be included as part of its file.

(c) The written request for review. The claimant may include in his request for review any statement of fact within his knowledge or belief, or other material which he feels has a bearing on his appeal. If the claimant request more time to gather and prepare additional material for consideration or review and demonstrates a reasonable basis therefor, he may be granted 30 days from the date of his request for review. If the claimant feels he is unable to prepare the written claim, the State agency shall offer to provide assistance to the claimant and further notify the claimant of other available sources of assistance. The making of an oral presentation pursuant to paragraph (b) of this section shall not be deemed a condition precedent to the filing of a written request for review.

cy's notification to the claimant of its determination.

(2) The time period specified in paragraph (d)(1) of this section shall be extended if necessary so that a claimant who previously made requests pursuant to paragraph (a) or (b) of this section shall have no less than 30 days from his receipt of the written explanation or from making the informal presentation, whichever is later, within which to file his written request for review and reconsideration.

§ 42.240 State agency review.

(a) General. The State agency shall consider the request for review and shall make a determination as to whether a modification is necessary. This review should be conducted by the head of the State agency or his authorized designee (other than the person who made the determination). A designee must have the authority to revise the initial determination of the claim and any determination reached pursuant to an oral presentation. The State agency shall consider every complaint regardless of form.

(b) Scope of review. The State agency shall review and reconsider its initial determination of the claimant's case in light of:

(1) All material upon which the State agency based its original determination including all applicable rules and regulations;

(2) The reasons given by the claimant for requesting review and reconsideration of his claim;

(3) Whatever additional written material has been submitted by the claimant; and

(4) Any further information which the State agency may, in its discretion, obtain by request, investigation, or research, to insure fair and full review of the claim.

(c) Determination on review by State agency. The final determination on review by the State agency shall include, but is not limited to:

(1) The agency's decision on reconsideration of the claim;

(2) The factual and legal basis upon which its decision is based, including