Assemblage

[PL1957]

Assuming that the municipality using Eminant Domain is the same one that created the condition of the surrounding parking lots it would be unfair to reduce the value of the subject based upon a condition created by the municipality.
I would employ the hypothetical condition that the subject is located in a neighborhood of similar size and style houses (this is where you will find your comps)

Granted, I don't do much eminent domain work, but I don't think being "fair" has a lot to do with things. I remember a lot of very specific requirements as to what was compensable and what wasn't, as well as very specific rules than needed to be followed in developing the report.

I think the easiest way to get a report thrown out was to be creative while trying to be "fair".

 

[Farm Gal]

Steven:

I might ditto Allison after first asking- How big is the subject lot? what current/probable zoning might apply? What is currently (and likely in the future) on the other side of the street?

Probably has excellent visibility - IF there is much/any street traffic on that side of the lot.

I agree on the Last man standing value potential...

In a local condemnation issue last man was self-identified as "German and a pretty stubborn fellow" (if that isn't a duplication of terms ) He now owns a single story commercial building surrounded on 3 sides with a high rise residential development after turnign down a rediculous amount of $$$ for the final offer/negotiated price on his singlestory brick 'old style' commercial building. He could have retired comfortably on the payment.

On the other hand he now owns a piece of property which *may* have signficant value in use to some other type of buisiness, though probably never the amount he was offered to cart his bicyle shop someplace else!

 

[Walter Kirk]

The reason for the fairness comment is that the courts will view a reduction in H&BU as a result of the municipality's acts to be unfair. The term that would be used is " unclean hands" A government agency may not deminish the value of a property by it's actions and then use eminent domain to acquire the property at a lowr price. The creation of the surrounding parking lots by the municipality may also be considered a "taking".

 

[PropertyEconomics]

Mr Vertin ... arent you charged with appraising the property unaffected by the proposed acquisition or the project which is affecting it? I would seek clarification from the condemning authority because I have always been told that market value under condemnation assignments assumes the project / reason for condemnation is not to be considered in valuation of the property.
I would think the assignment conditions are such that a hypothetical condition that the parking lot did not exist would be in order and the property owner is entitled to just compensation as though the home were unaffect by any prior purchases of the municipality.

 

[Stephen J. Vertin MAI]

Ok, very interesting comments. Some smart appraisers here. I am impressed and appreciate your help. So let me fill in some blanks. Subject street is residential. Subject is at the back of the parking lot. Village building attached to the parking lot fronts a major thoroughfare. Across the street from the subject are newer residential homes enforcing the fact the municipality caused external obsolescence to the subject. Something I need to clear up in the OP. I said "Purpose of report: Eminent domain" when I should have said Potential eminent domain. Some really good points on the issue. I am sorry I did not intend to be misleading just left out an important word ( hay I am human). Further I should bring up some human elements since fairness was mentioned and possible eminent domain is a factors. The owners are not greedy hold outs. During the Village offers to their neighbors mitigating circumstances did not allow participation. The children for the estate are now handling the matter (fill in the blanks). While I would agree a judge listening to the case could care less about fair and more about law, jurors are almost always concerned with fair. It is simply human nature. Thank you for bringing up the element of assemblage when it is actually plottage value related to assemblage. Hats off it is an important point.

Kevin, thanks for sharing the information. I thought you were hard on the original appraisers. However, if it was for litigation I can understand your forcefulness. We are allowed to advocate our value. No error. In the end I was not convinced he was in violation of USPAP but you did make a much better case than his. Well done. The article in 2005 Appraisal Journal was great. I sincerely mean that.

I am not sure the property should take a hit for issues caused by the village. I am convenienced there is value added given the circumstances of the situation. Further my belief is supported by most market data. You really do not know how much I would appreciate more feed back. Hearing all sides is really important to me. Thank you for taking time from your days.

 

[PropertyEconomics]

Stephen,

Do you have a different definition for "market value" under condemnation? And in my jurisdiction Ive appraised for potential condemnation, however, the report is for the purpose of condemnation and all condemnation rules apply. In my jurisdiction that means "highest price" and an appraiser is essentially instructed by the court to give all benefit of the doubt to the property owner with no consideration given to the project which causes the subject to be part of the condemnation action.
I think that our system, and that of the federal system is as fair as one can get considering that something is being taken from a private property owner. Our job, as you well know, is to compensate them fairly for that which is being taken.

 

[Amy Perkins]

I agree with propertyeconomics in regards to the definition of market value. Also when determining the highest and best use, I would check the general or specific plan not just the current zoning. I also agree with the idea of the external obsolescence idea, if this is caused by other takings.

 

[Carnivore]

Stephen,

Do you have a different definition for "market value" under condemnation? And in my jurisdiction Ive appraised for potential condemnation, however, the report is for the purpose of condemnation and all condemnation rules apply. In my jurisdiction that means "highest price" and an appraiser is essentially instructed by the court to give all benefit of the doubt to the property owner with no consideration given to the project which causes the subject to be part of the condemnation action.
I think that our system, and that of the federal system is as fair as one can get considering that something is being taken from a private property owner. Our job, as you well know, is to compensate them fairly for that which is being taken.

PE,

I am currently reading "Real Estate Valuation in Litigation", JD Eaton, MAI,SRA.

The very frst paragraph of Chapter 1 says the following:

"Due to conflictng case law and differing constitutional provisions in various jurisdictions, several different methods of computing just compensation have been promulgated. Although appraisers do not estimate just compensation, they nust report their findings of market value and the difference in property value before and after a partial taking in a manner usable to those charged with the responsibility of computing just compensation."

I posted that because as you very well know eminent domain work can get very complex. The complexity is not so driven by the potential MV or lost of MV but more about the agencies you are dealing with and the legal issues. The second paragraph sums up the role of the appraiser pretty well.

"The various condemning agencies have adopted computatinal rules, often in modified form to be used by their appraisers in eminent domain valuation. Although the law recognizes that there are exceptions to the general rules that just compensation is equal to market value, the acquistion policies of condemning agencies seldom provide for such exceptions. Therefore, the apparaisal forms and guidelines used by many condemning agencies must be modified to insure that all parites understand that the appraiser's estimate(opinion) reflects market value, which may or may not represent just compensation within the legal meaning of the term. ..."

My point is that I believe it is dangerous for an appraiser to just assume the MV and Just compensation are one in the same.

My question to you or anyone is am I on the right path of thinking to help solve Stevens Appraisal problem? It seems to me we must seperate the appraisal problem from the legal issues.

 

[PropertyEconomics]

PE,

I am currently reading "Real Estate Valuation in Litigation", JD Eaton, MAI,SRA.

The very frst paragraph of Chapter 1 says the following:

"Due to conflictng case law and differing constitutional provisions in various jurisdictions, several different methods of computing just compensation have been promulgated. Although appraisers do not estimate just compensation, they nust report their findings of market value and the difference in property value before and after a partial taking in a manner usable to those charged with the responsibility of computing just compensation."

I posted that because as you very well know eminent domain work can get very complex. The complexity is not so driven by the potential MV or lost of MV but more about the agencies you are dealing with and the legal issues. The second paragraph sums up the role of the appraiser pretty well.

"The various condemning agencies have adopted computatinal rules, often in modified form to be used by their appraisers in eminent domain valuation. Although the law recognizes that there are exceptions to the general rules that just compensation is equal to market value, the acquistion policies of condemning agencies seldom provide for such exceptions. Therefore, the apparaisal forms and guidelines used by many condemning agencies must be modified to insure that all parites understand that the appraiser's estimate(opinion) reflects market value, which may or may not represent just compensation within the legal meaning of the term. ..."

My point is that I believe it is dangerous for an appraiser to just assume the MV and Just compensation are one in the same.

My question to you or anyone is am I on the right path of thinking to help solve Stevens Appraisal problem? It seems to me we must seperate the appraisal problem from the legal issues.

Carnivore,

What if the legal issues are part of the appraisal problem? In my jurisdiction "market value" (in the traditional sense) is not the value to which an appraiser appraises in condemnation proceedings. State law has established a value definition here that is different. That was the reason I asked Stephen for the definition to which he was appraising.
Just compensation is actually determined by the courts based upon the value offered by the appraiser(s) as well as consideration of any other factors the judge deems as being correct and applicable.
Having the correct definition to which one is appraising, as you know, is crucial. Just as is having direction as to whether the project for which the subject is being appraised should be igonored during completion of the assignment. Not knowing his jurisdiction I cant really answer the questions, but merely point out what would happen I believe in the jurisdiction in which I live. I believe a court would tell me to ignore the impact of the project (Im assuming it is a total take) and provide a value estimate under the correct definition of the property which is to be taken, using the hypothetical condition that the project did not exist in the before condition.

 

[Dennis J. Black ASA IFAS]

Its just nice to see civil people with firing synapses kicking around a situation and try to help the OP hash out some thougths.

My only remaining questions to the OP are

Which form are you using?

Did you get this from an AMC or are you getting full fee?

Are you going to type in all CAPS or use proper upper and lower case?

Will your membership in AI affect your decisions as to what type of breakfast you will have next Sunday and is that breakfast being paid for by a member of a state appraisal board?