Easement Underneath House

[chuckd83]

I bought a house in Houston in 2007 and tried to sell in 2011. The buyer's title company discovered 3 city of Houston easements, 2 inactive and 1 active. The one active is a 10 foot wide storm sewer (20 foot wide easement) running directly underneath the house. The mortgage company would not lend the money and the contract fell through.

The sale that fell through was for $209k. An appraisal was done to determine the claim payout with my title company. The appraiser determined that the property was worth $222k without the easement and $55,500 (25%) with the easement.

The appraisal district which sets property values every year continues to raise my value and I have to protest it down every year. This includes meeting with the appraisal district appraiser. If no agreement, then you go before a 3 person neutral board who weighs the evidence. These are the values set AFTER I protested (they were higher before):
2010 - $170k
2011 (after easement discovered) - $140k
2012 - $112k
2013 - $122k
2014 - $200k
2015 - $200k
2016 - $200k
2017 - $230k

Market value without the easement today is probably $325k. If you are unhappy with the value after protesting, you may enter into binding arbitration with the appraisal district. You must deposit $500 and if the arbitrator's value is closer to your value, then you get that money back. If not, you lose the money.

My question is, should I enter binding arbitration? Obviously I couldn't convince the appraisal district appraiser or the 3 person board. But I know that it couldn't get $209k on the open market (with a loan at least) so how would it get $230k? I also have the original appraisal that says 25% value, but the board did not buy that.

If I go to binding arbitration, what value should I go with? Too low and I lose my $500. Too high and I may leave some property tax money.

Thanks for any help.

 

[Gobears81]

I do some ad valorem work (for both sides) and have received similar types of questions in the past. I always tell them that I am not a lawyer and cannot give advice on such issues. I don't know how the process works in Texas, but you might look into discussing these issues with an attorney that is well versed on this type of work.

 

[chuckd83]

Consulting and hiring an attorney costs money, maybe more than the tax savings are worth. My question is for appraisers as to what the fair market value is. Is the 25% valuation completely unreasonable? What you value a house in my situation?

 

[JTip]

To find the answer will take time and resources.....it will cost you money. Take Gobears advice and see an attorney.

Without eyes on your property, researching deeds, or competency in your Texas market/city, anybody on the internet would only guess as to the value loss, if any, and mislead you without credible research.

 

[AMF13]

It seems you need help if you could not convince them on your own. So, you would be in for $500 plus attorneys fees. It could add up real fast, how much tax are you talking? Is it likely to be worth while? Or a long shot gamble? Sounds like a lousy situation.

 

[Russ Kitzberger]

RE tax laws change all the time. You need to consult an attorney.

If your answer from an attorney is yes it affects value, you need an appraiser who is qualified in easements and value diminution to appraise the property, possibly prepare for arbitration, etc.

Good luck sounds expensive, time consuming, and permanent!

 

[Restrain]

Check the laws, not what the Appraisal District. As I recall, Texas passed a law stopping the hiking back up year after year. Think there is a 3 year time frame now (former Texas appraiser here). Hire a tax appeal company vs an attorney. They know the rules, and the folks there.

 

[Riick]

So, what did the Title Company pay out for diminution in market value?
If anything like 50-75% of the $222k "market value" you mentioned in the original post, $500 is very small potatoes.

 

[Howard Klahr]

you would be in for $500 plus attorneys fees.

Grossly understated

 

[Terrel L. Shields]

I was on an Arkansas board of equalization, which allows appeals into a real court. One of the assessor appraisers had worked in Texas for years, and told me the Texas system, unlike Arkansas, heavily favors the taxing authorities. The fact they dismiss an appraisal out of hand would never occur in Arkansas because the assessor would be overruled by the county judge.

Arbitration OTOH is a crap shoot with loaded dice. I've yet to see my first arbitration where one side "won", and at best the plaintiff can expect to do no better than 50/50 split whereas the other side will likely get 70%-90% of what they claim. Texas has long had very onerous tax system to make up for their much ballyhooed "no income tax". A mineral owner, in particular, might as well quit-claim their minerals to the state if they go delinquent as penalties usually exceed income.