Eminent Domain

[visalia]

Im an appraiser here in California, and have a little eminent domain situation on my property. Here is the quick and dirty story.

We bought a property in the county about 2 years ago, which is an older residence and an office building on one 33,000 sf lot.

About 8 months ago the county informed us that they are going to be widening the road. This means they will have to take a strip of land off the front and side of the lot about 6,000 sf. The office will not be affected, however the house would be too close to the road so it will have to be removed.

How would a house in this situation be valued? The appraiser used a sales comparison approach, but how do you use a comp. There is no land, you are just removing a structure from the property.

Anyone with eminent domain experience have any feedback? I am not sure if this is a full explanation or not.

 

[matt hawk]

From your post, I'm not sure if the house is within the proposed roadway or just close. If very close, you can make the claim that its highest and best use is now a rental and use a GRM to come up with a value. If the house is gone, it's lot value.

 

[Restrain]

I've seen homes where the front steps are right at the ROW line. As a rule.....(and rules are only as good as the individual jurisdiction)....the home will not have to be removed unless the ROW actually goes through the home. That being said, you have a case for damages to the home, re resale value.

Check with your city to see if the home will be grandfathered or will have to be removed.

Then get a qualified appraiser that does eminent domain work. Be sure to ask them if they know what the "yellow book" is (it's the eminent domain government guidelines book). Ask them if they've testified, etc. Then pay for an appraisal yourself.

The condemning authority will try to get it as cheap as they can. You want as much as you can get. However, they may be willing to negotiate. Some jurisdictions do, some don't.

Do not be afraid to go before the first level of judicial appeals for condemnation. It's usually a 3-person board with relatively informal hearing practices. Your costs would be for your attorney, if you want one, and your appraiser's time.

So, do your research, and don't wait till the last minute. Good luck.

 

[visalia]

Let me ask it in another way.

Say you have a house on the front part of a 40,000sf lot. The county comes in and needs to take away only a 1,500sf piece from the front of the lot. Now the house is older and its only feasible to just demo and remove the house.

This would be easy if you were just taking the whole property away, but your just taking a small piece of land and a structure.

How do you value this takeaway? Find comparable sales on 40,000+-sf lots, then subtract the value of the land itself? houses on small lots and do the same?

 

[PropertyEconomics]

Eminent domain uses the appraisal theory of Before and After.
The property is appraised in the before condition (all land and improvements) in order to arrive at a value in the Before Condition.
The property is then reappraised in the after condition (ie land after the taking with the office structure on it) in order to arrive at a value in the After Condition.

The resulting difference in these values reflects the Value of the Taking (land an improvements). From you posts though, Im not sure the home is affected, but then again I havent seen the right-of-way plans. It seems like its just an older home that you hope they pay you for, which may or may not be the case. Depending upon safety issues, the actual amount of the setback in the after condition, etc. there may well not be a taking of the home at all. Its impossible to tell from your postings.

Understanding eminent domain laws in your state are one of the most important parts of your understanding the process. Unless this is a federal project, not all requirements of the Yellow Book may apply, however, the laws of your state regarding eminent domain certainly are in effect.

If the property has been appraised by the County you should have a copy of that report. If you dont, or it hasnt been appraised yet, I would be patient to find out what the values are and what the dollar amount of the taking is.

To hire an appraiser at this point could well be a waste of money since you dont really have anything to dispute yet and the offer may well be to your agreement.

I hope this helps.

(NOTE: If you may be contemplating conducting an appraisal on this yourself, its far too complicated with too many nuiances within the process to understand .. not to mention your license level, most probably, doesnt allow it.)