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? Regarding major utility easement's effect on market value

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Donna Williams

Freshman Member
Joined
Mar 20, 2003
Hello,
I'm new to this forum and I hope that I can find either some help or reassurance from the members here.

My Problem: A major natural gas utility is forcing a transmission line through our residential property which will connect with the Transcontinental Pipeline and carry highly pressurized natural gas (800 lbs. PSI). In our state, SC, this utility is conveyed emininent domain which means our only say in the matter is input on the settlement. This pipeline will pass through an open field along one property line, under an asphalt drive, through the bed of natural spring and a rainwater drainage area taking all of the trees down. This affects the privacy and natural beauty of our property, especially the approach to our home which is shielded from view at the roadway. They will wipe out all of our landscaping in that area (azalea plantings with 8 years of growth). The pipeline is underground and that easement will be viewable from our home. The easement will primarily lie in a large field that my daughter plays in and it's the only other realistic building site on our heavily wooded property of 7.5 acres.

My Question: Will this easement decrease my overall property value and the resale value of our home? Although I can find info. regarding other settlements in my area, I've been unable to locate a comparable property where I can assess the effect by determining the change in property value from before to after an untility easement is granted. My instinct is that it will hurt our value. I personally would not seek to purchase a residential property with such an easement, unless I was getting a "deal" for that type of property to offset the acceptance of the easement. Is there a "rule of thumb" that would give some indication of how the value of the home and property will be affected? I appreciate any help or insight you can provide in this matter.

Sincerely,
Donna C. Williams
 

Bill_FL

Senior Member
Joined
Aug 23, 2002
Professional Status
Certified General Appraiser
State
Florida
Donna,

Nope. No rule of thumb for this. However, when was the last time you had your property appraised to establish its market value, before easement? That needs to be done right a way.

Then, I am sure that there are appraisers in yoru area who have experience in partial takings. Look through the phone book. Those that do will generally list condemnation work in their ads. The effect needs to be measured by looking at what a property was worth prior to the taking, then what did it sell for afterwards? This would be the best way to measure the impact. I am sure, that somewhere, someone has done similar studies. If this pipeline is large and has gone through many other areas. I am sure this has been done.
 

David S. Roberson

Senior Member
Gold Supporting Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
Donna,

You've got a lot of investigation to do. Depending on how close the easement is to your residence, it may never qualify for certain financing such as FHA, thereby limiting it's marketability. The same situation might apply to your other building site, precluding you from building on it. There is no "rule of thumb" on something loke this. You need a qualified appraiser in your area to assess the situation and determine the effect on value.
 

Donna Williams

Freshman Member
Joined
Mar 20, 2003
Thank you Bill and David for your advice, I was just looking through the phone book for such an appraiser. It's been four years since the property has been appraised, for a remortgage, and all of the property wasn't included at that time, only the home and 1 acre. That allowed us to keep a flood plain that the residence is not located in from affecting our mortgage. I don't think the easement would be close enough to our current residence to intefere with FHA approval, but it would be a problem if someone wanted to build on that site. My young daughter thinks that she would want to build there eventually and my husband and I both have aging parents who we could have relocated there.

Bill, how would I go about finding if there's been a study in my area? Or would that be a something that only an appraiser could access, as in information shared between professionals? Our lawyer advised against hiring an appraiser because SC allows citizens to testify to the value of their property. I'm unsure as to the motivation behind this advice - he may see it as unnecessary expenditure since our testimony is allowable or there could be other reasoning. But I would be willing to consult with an appraiser regarding this.

David, where would I find regulations on FHA limitations on properties with easements? I would like to look into this.

Again, thank you for taking the time to point out these considerations and answer my questions,

Donna
 

xmrdfghap

Senior Member
Joined
Jan 15, 2002
Professional Status
General Public
State
Florida
There is a thread (an older one) that not only discusses this subject, but has some dire warnings about it. A pipline such as you describe killed 10 people in Carlsbad New Mexico in the late 90's (98 I think) and blew a crater 40+ feet wide x 80+ feet long and 20+feet deep. This should link you to the thread.

http://www.appraisersforum.com/forums/view...pic.php?t=2431&

Call your department of transportation and ask them for an attorney that specializes in emminent domain. talk to a couple of them and get some references for appraisers that specialize in pipelines. Every state has them, and every state does emminimet domain for them.....although I still feel there is some constitutional issues there.

Stigma for a pipleline? Absolutely., and every time. Not only that, your landscaping should be made whole or at least compensated for.

Good luck and let us know how you turn out.

PS: I checked the Carlsbad Explosion....it was August 21, 2000
 

David S. Roberson

Senior Member
Gold Supporting Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
Donna;

Gas line easements are addressed in HUD Handbook 4150.2 Section 2-2-I.

This requires a property to be more than 10 feet from the outer boundary of the pipeline easement.
 

Bill_FL

Senior Member
Joined
Aug 23, 2002
Professional Status
Certified General Appraiser
State
Florida
Donna,

Generally, if you look in the phone book, or call teh appraiser who did your last appraisal, we all know of people in our areas that specialize in that type of work. It is very time consuming and most appraisers who do not specialize in it would be over their head.
 

Neil (Texas)

Sophomore Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Texas
Donna,

Check out this news article.

http://www.austin360.com/aas/specialreport...402smalley.html

The Smalley foundation may have some useful information.


Greg,

"Stigma for a pipleline? Absolutely., and every time."

Maybe. Pipeline (Koch) explosion in 1996 took two young lives in a rural area of Kaufman County, Texas. I did an in-depth study of the area and was amazed to find there was no price decline or market resistance to homes offered in the immediate vicinity of the explosion. Also found that, subsequent to the explosion, serveral new homes were built nearby (the repaired pipeline actually traversed the back of one of these properties). Interviewed one gentleman who moved a manufactured home on a site (within 300 feet) adjoining the area where the explosion took place. His comment: "hell, they repaired the line in this area, its the safest place to be." Go figure.

Neil (Texas)
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
1. Pipeline easement can and do affect value.

2. The proximity to the home can negatively affect the marketability and value of the home.

3. The location of the line can affect the marketability of the site even if it doesn't affect the home because it can affect the utility of the site (cutting it up into smaller sites for resale, other improvement locations such as barns, etc.

4. Trees have value and the loss can affect value. Look what happens when properties are cleared for timber. You can measure the loss.

5. If it affects a stream, you have an environmental factor. Did the pipeline conduct an environmental study?

6. Natural gas pipelines are inheriently hazardous. They can and do explode.

Contact your attorney. You need a specialist in eminent domain. If the pipeline is coming through, someone in your area is already working with other property owners. I would plan to fight this, even banding together with other property owners to get the pipeline relocated to a more environmental and property-friendly location. Yes, you can fight them.

Finally, once they get the easement, watch them. They tend to add parallel easements. I know of one instance where once the easement was obtained, additional easements were added to the land to the point that the land was totally unusable.

Good Luck

Roger

Roger
 
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