Burdensome easement?

[Chris Harrison]

Assignment is: "Loss in property value (if any) as a result of a burdensome easement."

Seems the property owner found out after purchase (6 months) that there is an large aqueduct pipe line easement across the rear of his property. The subject is located in a PUD and he was given the wrong CCR’s for his property. To make a long story short, the developer failed to file the easement for 2 years after it was established. Finding fault is no longer an issue. This has reached an arbitrated settlement, where both parties are hiring their own appraiser to estimate the property value with the easement and without the easement. They are then settling by averaging the difference between the two appraisals.

The easement will not permit permanent structures such as fences, retaining walls, block walls, buildings, garages, decks, carports, swimming pools, trees or vines within the right-of-way. Existing gravity drainage must be maintained by the property owner.

The easement runs the entire length (19' x 129') of the rear yard.

All the sales of similar properties (with the easement) are from the developers file. Utah is a non disclosure state and verification is limited. No other sales in PUD’s or similar valued properties are found along the aqueduct.
Yes this is a narrative report and no I’m not being paid enough.:new_all_coholic:

Ideas and suggestions are welcome. Running like the wind is not an option

 

[Wendy]

What is the depth of the rear yard?

 

[Chris Harrison]

Wendy,

From the house to the property line about 60'.

 

[Fred]

If I am not the arbitrator. I don't want no stinkn' easement appraisals. I'd make the seller give the buyer a new house that is the rough equivalent of this house was supposed to be, in exchange for return of the damaged goods. That makes the buyer whole and leaves the seller exactly where he should be - absorbing the loss from the burdensome easement. Whatever the loss is, someday the seller will abosrb it.

 

[Chris Harrison]

Steven,

Are you saying that the loss can't be estimated until resold?

 

[Fred]

No, theoretically the loss can be estimated at any time, but it is realized at the time of the sale. If it were easy to estimate such loss though, you wouldn't be in here. In fact, depending on which side you are on, I probably have heard both: the why-it-doesn't-make-a-difference theory and the why it like a total take of everything from the near easement line to the back of the property line. And then somebody is liable to start tacking on compound interests, all the money they were going to make selling goldish from the goldfish pool they were going to build - yada yada.

I am just saying take the risk of mis-appraising easements out of it. Make em swap properties. Let the market do the work.

 

[Chris Harrison]

Steven,

I agree that would have been the best option. But because this property has already been arbitrated and a settlement agreement signed by both parties, they need an appraisal. I don't think I'm on either parties side. I think at this point I'm in the middle of total taking of the rear yard to doesn't matter much. I'm still researching the issue. If you have any information that would be pertinent to either side, I would be grateful if you would share it.

 

[xm39hnu]

Chris,
Some things to address:
Looks like the homeowner lost all subsurface rights, most of his surface rights, and a minor portion of air rights (surface to about 20' or so.).
Does the deed reflect a temporary maintenance easement as well as the primary (ingress-egress) easement? I'm assuming this aquaduct to be a pipeline.
Look at the appraisal fictions employed in corridor valuation (Lum Library is a good place to look.) Corridor theory states that the land in a corridor (easement) is worth at least as much as the land through which it passes. (I think it's BS, but a bunch of very senior appraisers seize upon this sophistry and make it acceptable.) The other theory is that for a segment of unmarketable size (comes from pipeline easement appraising), it's quite OK to theoretically expand the easement to marketable size, and appraise it on a per-unit basis as if it were marketable. (More ipse dixit BS, IMO, but you can get away with it by appealing to authority.)

Easements have no market value. (How many have you seen offered for sale?) Therefore, I'd argue that the last 19' of the subject lot has a contributory value of zero, plus the contributory value of the remaining surface and air rights.

So, are there sales of smaller lots that you can rely on? Can you extract a site value from them? That'd give you the unit value of the subject's usable area. Add to that whatever you can support for the remaining surface rights within the easement (in a residential subdivision, the air rights should be negligible.) Subtract from that total whatever PITA percentage factor you can offer any support for.

At an AI course in report writing, the instructor offered this sage bit of advice for supporting "appraiser's judgment" adjustments: "Start with a castle on one end, and an outhouse on the other, and reason your way to the middle." Looks like you may have to use that process on this one.

 

[Mark K]

Chris,
I'm involved with these frequently and have been to court because of them on several occasions. If you want my 2 cents worth, feel free to pm me.

 

[Chris Harrison]

Jim,

Thank you! The deed contains a protection criteria which includes a permanent maintenance responsibility on the property owner. That is one of the issues that I am trying to quantify.

I hadn't thought about corridor valuation theory in relationship to this property but will reconsider as an alternative or back-door support

I do have some similar lot sales but all the sales that are affected by the aqueduct are from the developer.

Yes it is a 20" freshwater pipeline.