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Section 5: Actual Direct Loss of Tangible Personal Property/Purchase of Substitute Personal Property

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Overview

Payment for “actual direct loss of tangible personal property” or “purchase of substitute personal property” is allowed when a business, farm or non-profit organization is entitled to relocate its displaced personalty, in whole or part, but chooses not to do so. Payment may only be made after an effort is made by the owner to sell the displaced item of personal property (unless department personnel determines it is unnecessary). The amount of the sale, trade-in or salvage must be supported with a bill of sale or similar documentation. Actual reasonable costs associated with the sale, as well as copies of advertisements, offers to sale, auction records, and other data supporting the sale shall also be documented. Determine payment as outlined below.

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Actual Direct Loss of Tangible Personal Property

If an item of personalty is not moved and not replaced with a substitute item that performs a comparable function at the replacement site, the owner is entitled to payment for the lesser of:

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  • the depreciated in-place value of the item less sale proceeds; or
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  • the estimated item cost of moving and reinstalling (if currently in operation at the displacement site) the displaced item cost, with no allowance for storage. If the business, farm operation, or nonprofit organization is discontinued, the estimated cost must be based on a moving distance of 50 miles.
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Purchase of Substitute Personal Property

If an item of personalty is not moved but instead replaced with a substitute item that performs a comparable function at the replacement site, the owner is entitled to payment for the lesser of:

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  • the substitute item cost, including installation cost at the replacement site, minus any sale or trade-in proceeds from the displaced item; or
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  • the estimated cost of moving and reinstallation (if currently in operation at the displacement site) cost, with no allowance for storage.
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Requirements

To be eligible for this type payment the claimant must have made a good faith effort to sell the personalty, unless the department determines such an effort not necessary. Document the department’s determinations concerning these attempted sales in the project file. When a property loss is claimed for goods held for sale, base the fair market value on the cost of the goods to the owner, not the potential selling price. Reasonable costs associated with the advertising and sale of the personal property by the owner shall be considered an eligible moving expense.

Upon request and in agreement with applicable law, the displacee must transfer to TxDOT, at no cost, ownership of any personalty not moved, sold, or traded in.

When personalty is abandoned with no owner effort to dispose of such property by sale, the owner will not be entitled to moving expenses, or losses, for the items involved.

Personalty removal costs must not be considered an offsetting charge against other payments to a displacee.

The cost to move the item must not exceed the lower of two cost estimates obtained by TxDOT from qualified firms or individuals, or the estimated cost determined by a qualified TxDOT employee as described in above Moving Expense Finding. A TxDOT appraiser or an outside source may establish depreciated in-place value if prepared in writing in a manner clearly identifying the item, its value, the estimator, and the date of the valuation. Estimated moving costs and estimated depreciated in-place value of an item must receive approval from ROW Division HQ. Submit all moving cost estimates and values for review by ROW Division HQ before the planned property disposal date.

For any and all substitute equipment requests, obtain bids for move by two movers and obtain two estimates of the cost of new equipment. This is done in order to determine the lesser expense of these four bids: two bid estimates from movers to move the items along with two estimates of the cost of new equipment (this may include shipping, handling, set-up fees). The lesser expense of either the cost to move or the cost of “new, in place” would be the maximum reimbursable amount.

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