In appraising properties under lease, the general practice is to offer the approved value to the fee owner, if the owner will secure a release from the lessee on terms mutually acceptable to both parties. Necessary appraisal information and recommendation for revision in the total approved value will be submitted to determine a separate approved value for each interest and separate offers will be made accordingly. Values for tenant-owned improvements shall be consistent with 49 CFR 24.105. If acceptable to the parties, both interests must ordinarily be closed simultaneously.

When the property is subject to a lease, the appraiser should make inquiry as to whether a lessee owns any of the improvements. If possible, the appraiser should obtain, or be furnished with, a copy of the lease under which the lessee occupies the property being appraised. In all cases, the appraiser should review the lease so that he/she is familiar with the terms and conditions contained therein. The findings of the inquiry should be indicated in the appraisal report.

On parcels with lessee-owned real property improvements where a valid lease exists, a separation of owner-lessee interests will be necessary, if the landowner will execute a form to the leasehold interests in such improvements. If none of the above conditions is met, the property will be appraised in the usual manner and the approved value will be offered to the fee owner if he will secure a release from his lessee. Additional information may be found in the

ROW Acquisition Manual

, .