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Parking Easement

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H.B. Userman

Thread Starter
Junior Member
Joined
Nov 11, 2003
Professional Status
Certified General Appraiser
State
Wisconsin
I've been engaged to report my opinion as testimony in a funky court case.

A guy purchased a corner site to construct a small strip mall. The site is 6/10 acre. Subsequent to the purchase, an easement was found that decreases the size of the buildable area by 25%, and also eliminates 6 parking stalls. According to the buyer there's been a significant change in HBU.

The funny and irrelevant thing is that the easement isn't even to the benefit of the adjacent property, it is for the benefit of another site located on the other end of the property next door. Chances are this easement would never be used as intended, but it's there.

I'll be looking at the value difference between the site with and without this easement, as of the date of purchase. An appraisal was completed for the other side, and the loss has been determined at X%. My job is to tell them what I think.
 

Walter Kirk

Senior Member
Joined
Jun 24, 2003
Professional Status
Licensed Appraiser
State
New Jersey
The loss of parking spaces may be the basis for a loss in square footage of the proposed strip mall since zoning or industry standards may establish a ratio between square footage and parking spaces (not to mention tennant requirements). If the loss of these spaces does translate into a loss of building area you can calculate the loss of potential income.
 

George Hatch

Elite Member
Gold Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
I realize you already know this, but it bears repeating anyway: An easement comes under the category of "legally permissible" in the HBU analysis. With an existing property use it may or may not cut into the viability of the improvements if those spaces are being used, but for development potential it probably would cut into the maximum building size if there are parking requirements and if the jurisdiction makes that distinction. A lot of "ifs".
 
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