Opinion No. Oag 42-79, (1979)

68 Op. Att'y Gen. 114 | Wis. Att'y Gen. | 1979

PAUL J. FIEBER, Chief of Relocation Services Division of HousingDepartment of Local Affairs and Development

You have asked whether sec. 32.19 (4m), Stats., as created by ch. 440, Laws of 1977, pertains to tenants operating business or farms on acquired property. Section 32.19 (4m), Stats., provides in part:

In addition to amounts otherwise authorized by this chapter, the condemnor shall make a payment, not to exceed $50,000, to any displaced person who is displaced from any business or farm operation which the person has owned for not less than 180 days prior to the initiation of negotiations for the acquisition of the real property on which the business or farm operation lies, and who actually purchases a comparable replacement for such acquired property within 2 years after the date the person vacates the acquired property or receives payment from the condemnor, whichever is later. The additional payment under this subsection shall include the following amounts:

Section 32.19 (1), Stats., describes the policy of the Relocation Act as "that persons displaced . . . be fairly compensated by payment for the property acquired and other losses."

The Wisconsin Relocation Act is a remedial law designed to obviate, or at least minimize, economic hardship occasioned by public acquisitions. Accordingly, the section is to be liberally construed, Madison v. Hyland, Hall Co., 73 Wis. 2d 364,243 N.W.2d 422 (1976); Aero Auto Parts, Inc. v. Dept. of Transp.,78 Wis. 2d 235, 253 N.W.2d 896 (1977). Before statutory construction is possible or proper, it must first be determined whether the statute is ambiguous. Robinson v. Kunach, 76 Wis. 2d 436,251 N.W.2d 449 (1977).

The section in question provides that payments of up to $50,000 shall be made "to any displaced person who is displaced from any business or farm operation which the person has owned." The language "has owned" relates back to the "business" or "farm operation" and does not necessarily connote ownership of real estate.

Prior to the creation of sec. 32.19 (4m), Stats., the Legislature, in sec. 32.19 (2), Stats., defined certain words in the Act as follows:

(a) "Person" means:

1. Any individual, partnership, corporation or association which owns a business concern; or

2. Any owner, part owner, tenant . . . operating a farm . . . .

"Displaced person" is defined in sec. 32.19 (2)4.(c), Stats., as:

[A]ny person who moves from real property or who moves his personal property from real property, on or after July 1, 1970, as a result of the acquisition of such real property, in whole or in part or subsequent to the issuance of a jurisdictional offer under this chapter, for public purposes or, as the result of the acquisition for public purposes of other real property on which such person conducts a business or farm operation.

A "displaced person" includes an owner of real estate, as well as a tenant business and tenant farmer. Accordingly, there does not appear to be any ambiguity and, at first blush, it seems that any "displaced person," tenant or owner of real estate, who is displaced from any business or farm operation falls within sec.32.19 (4m), Stats., and is entitled to a payment up to $50,000.

However, there seems to be some ambiguity if we consider sec.32.19 (4m), Stats., in conjunction with its subsections. The subsections provide:

(a) The amount, if any, which when added to the acquisition cost of the property (other than any dwelling on such property) equals the reasonable cost of a comparable replacement for such acquired property, as determined by the department of local affairs and development and the department of industry, labor and human relations, jointly. Such replacement property shall be within reasonable proximity of the property being acquired and shall be suited for the same type of business or farm operation as that which is being conducted by the displaced person at the time of acquisition

(b) The amount, if any, which will compensate such displaced person for any increased interest cost which such person is required to pay for financing the acquisition of any replacement property, if the property acquired was encumbered by a bona fide mortgage which was a valid lien on the property for at least 180 days prior to the initiation of negotiations for its acquisition. The amount under this paragraph shall be equal to the excess in the aggregate interest and other debt services cost of that amount of the principal of the mortgage on the replacement property which is equal to the unpaid balance of the mortgage on the acquired property, reduced to discounted present value. The discount rate shall be the prevailing interest rate paid on savings deposits in commercial banks in the general area where the replacement property is located.

(c) Reasonable expenses incurred by the displaced person for evidence of title, recording fees and other closing costs incident to the purchase of the replacement property, but not including prepaid expenses.

The subsections prescribe the criteria for determining the amount of the payment and, obviously, must be considered in relation to the whole statute. State v. Wachsmuth,73 Wis. 2d 318, 243 N.W.2d 410 (1976); Aero Auto Parts, Inc., supra.

The emphasized language in subsecs. (4m) (b) and (c), is capable of suggesting that the intent of subsec. (4m) was to limit this benefit to those persons who actually own the acquired real estate upon which the business or farm operation is conducted. But, the criteria describing how the payment is to be determined do not actually define eligibility for payment. In fact, the criteria would also be appropriate for determining the payment to be made to tenant business and tenant farm operations.

Nor, in considering subsec. (4m), in conjunction with subsecs. (a), (b) and (c), can we overlook the fact that a lease is an interest in the real estate and, in a sense, the tenant becomes the owner of the leased property. Holcomb v. Szymczyk,186 Wis. 99, 202 N.W. 188 (1925).

Accordingly, a tenant whose property interest (leasehold) is acquired is, in my opinion, entitled to the benefits provided in sec. 32.19 (4m), Stats.

BCL:CAB