Driveway Easment Value-HELP

[BONNIE BALDWIN]

An old client of mine has asked me to value a driveway easement on his property. This easement would be 5.65 feet wide and about 104 feet long. The utilization of this would be to allow access to 3 parking spaces at the rear of his building which currently has no outside or street access. Now this is a very expensive urban area and driveway easements are quite common but were generally made about 100 years ago.

The owner of the building at the rear which would be purchasing this easement plans to convert the building at the rear to condo units and the going rate for a parking space here is about $20,000 each. Hence the access value is about $60,000.

I have researched the forum for answers but have not been very successful in pointing me in the right direction.

Where would one go to determine if there have been any recent sales of similar type easements? Alternatively, how does one go about determining its value. Finally, how would one charge for this.....by the hour for research? And if so how much?

By the way the owner of this property where the easement would be going is a non profit agency. HELP!

 

[Rudy Canoza]

You have to develop a "Part Take" opinion of value. It's very complex and is typically used for eminent domain work for road widening or something similar. It formulizes the land into the textbook 4-3-2-1 valuation.

I have done it only once. It's a fascinating method of valuation. Approach it with caution and have a good mentor or two around to help you out.

Good luck!

 

[Willie]

5+' wide driveway easement? What are they driving? A civic Hybrid, Prius or a more conventional type of motorcycle.

 

[BONNIE BALDWIN]

I don't make them up....I only report

Bob...thanks for the approach. I will have to look into the "part take" 1234 valuation.
William....yeah, well in this part of the country every inch counts.

 

[Fred]

Here is why I have belly laughs over USPAP’s phrase “typical practice.” This type of appraisal is normally butchered, while the intended users assume the appraiser has a clue.

The idea of the appraiser unilaterally deciding on a single valuation scenario is bad. At the least, the agreed-to price could be based on the actual value of the strip, the gain to the dominant interest, the loss to the subservient interest, etc. This agreement could end up reflecting use value instead of market value.

 

[CANative]

I wouldn't think it is market value. It's a property with only one buyer. The seller needs to know what it is worth to that buyer, not necessarily what it's worth to the seller.

 

[BONNIE BALDWIN]

Value gained by acquisition of easement

Greg, as stated earlier, the purchaser of the easement would see an approximate $60k gain on his sale of the units as 3 parking spaces for the condo units. Can I base the valuation on this $60k? If so how much?

 

[CANative]

I don't do this type of appraisal (yet.) But I think you would need to use several methods (approaches) and reconcile them. Use income capitalization to find a value based on the increase in rent of a condo with parking. Use sales data to compare the difference between condos with parking and without parking. Determine the HBU of the property that is subserviant and determine how it is affected by the taking.

Aside from the difficulty in obtaining this data and working with it, I would also be unsure of how to state the definition of value and cite it's source.

There a many huge and complicated books dealing with this subject. It is a speciality. All brain surgeons are doctors, but not all doctors are brain surgeons.

 

[Fred]

Greg

I wouldn't think it is market value. It's a property with only one buyer....
I don't do this type of appraisal (yet.)

You seem good at it.

The seller needs to know what it is worth to that buyer, not necessarily what it's worth to the seller.

I think the seller needs to know both. If the seller’s loss in value is greater than the buyer’s gain, there is no likely deal. Of course, if that were the case with this strip, they probably wouldn’t be to the find-an-appraiser stage. Ain’t game theory fun? :icon_smile:

There a many huge and complicated books dealing with this subject

For example?

Oh, and Greg, what form do you use for this? :rainfro:

 

[Fred Freund]

Bonnie:

Try checking out the Registry of Deeds on-line for your county. I know that Middlesex South and the others that use the same masslandrecords.com engine allow you to search by document type. You can do a search for easements in your community, probably going back as far as 1974. If there was consideration involved it will be in the deed. I've been involved with these on the periphery before, generally for the grantor of the easement so they can show the effect of the easement on their property.

Good luck.