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The Larger Parcel

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vtaot

Thread Starter
Freshman Member
Joined
Jun 19, 2008
Professional Status
Certified Residential Appraiser
State
Vermont
For condemnation purposes..... I have already determined that the property (2 parcels) I am appraising passes the Larger Parcel Test and I will be valuing the partial acquisition on 12 acres as opposed to two appraisals on 5 and 7 acres.... My concern is adhering to USPAP. Is this seen as "that which is contrary to what exists, but is supposed for the purpose of analysis"? (the familiar definition of Hypothetical Condition). If so, do I need to disclose this in my report per Standard 1-2(g)? If "the larger parcel" is not considered a hypothetical condition than how do I address it? Just discuss it to make my appraisal methodology clear to the reader? Thank you.
 

Jerry Bone Jr

Senior Member
Joined
Feb 23, 2004
Professional Status
Licensed Appraiser
State
Oregon
For condemnation purposes..... I have already determined that the property (2 parcels) I am appraising passes the Larger Parcel Test and I will be valuing the partial acquisition on 12 acres as opposed to two appraisals on 5 and 7 acres.... My concern is adhering to USPAP. Is this seen as "that which is contrary to what exists, but is supposed for the purpose of analysis"? (the familiar definition of Hypothetical Condition). If so, do I need to disclose this in my report per Standard 1-2(g)? If "the larger parcel" is not considered a hypothetical condition than how do I address it? Just discuss it to make my appraisal methodology clear to the reader? Thank you.
What is the "Larger Parcel Test" ? Something like plottage ? Yes it's a HC, disclose, disclose, disclose.
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Your cleint (or an intended user) is probably a government entity with the power of eminent domain... and likely has the ability to require a report based on a Jurisdictional Exception. Is this a Federal Land Acqusition subject to Yellow Book rules or a local one with a different set of criteria?

Get the entity's specific rules and quote 'em- might answer your question as to the HC, hint: usually Fed acquisitions or those usbject to the same rules don't require a HC (assuming for legal purposes) but rather the application of a J.E. as it applies to the defined Larger Parcel - which relies on conitguity and/or unity of title and/or unity of use rather than individually defined legal descriptions/platted lot lines!

You may want to take a look at Real Estate Valuation in Litigation... Chapter 5addresses the Larger Parcel issue which is specific to Condemnation Appraising.

It really isn't so much assemblage as using the proper tools to do the work as required by the cleint to solve the real appraisal problem - damages to the property owner for the 'whole property/use' before versus the whole property/use after. Just make SURE you don't have two larger parcels... and if you don't understand that concept get HELP before you get chewed up on the stand!

In fact that chapter say that an appraiser usually doesn't run into anything which can't be dealt with like you would in 'regular' appraising for any other purpose - but the Larger Parcel is 'unique' to Eminent Domain and is usually mis-understood.

best take great care to define both the concept and the specific application to your subject property to avoid any misunderstandings... again more of a JE (rather than a HC) depending on the users regulations...

Just explain what you did and why you didit...carefully.
 

vtaot

Thread Starter
Freshman Member
Joined
Jun 19, 2008
Professional Status
Certified Residential Appraiser
State
Vermont
Here is a definition from the Dictionary of Real Estate Appraisal:
In condemnation, the tract or tracts of land that are under beneficial control of a single individual or entity and have the same, or an integrated, highest and best use. The portion of a property that has unity of ownership, contiguity, and unity of use, the three conditions that establish the larger parcel for the consideration of severance damages in most states. In federal and some state cases, however, contiguity is sometimes subordinated to unitary use.

I can't find anybody to agree with me (other than you, thank you, and you're the first response here) that I have to disclose this as a Hypothetical Condition.
 

vtaot

Thread Starter
Freshman Member
Joined
Jun 19, 2008
Professional Status
Certified Residential Appraiser
State
Vermont
Thank you very much. I am in fact a right of way appraiser and only do condemnation appraising (however, for only 1 1/2 years). I have definitely researched the Larger Parcel test and understand the arguments...I just got caught up in wondering if this is also a HC. I do agree with the JE rule, which I've used in other areas in condemnation appraising. Thanks again.
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
You are very welcome! And welcome to the forum:flowers:!

I just finished a fairly complex appraisal that had a similar JE, plus a whole bunch of Hypothetical Conditions, plus a few Extraordinary Assumptions m2:...

It had the most messed up legal descriptions and unrecorded (or misrecorded) public roadways, on top of a mess of public and private easements. Really it was a property "mixed up worse than the dogs breakfast" was what I told the higherups!

The first poor sap who had to read it about pulled himself bald reading through the unbeliveably complex site description - which with annotated plats, and color coding was STILL a mess... And I got some guff about the use of JE vs HC vs EAs so I am pretty up on which means what in a Larger Parcel problem!

The only thing I WAS sure of was that the whole multi-lot bisected thing was a Larger Parcel under the Use theory! And oldly, I even had two legal owners mixed into the mess!!!

(Spouse- deceased owned part of this problem)...
 
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