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TX DOT, Eminent Domain, and property owner/CPA
- Thread starter Jimmie West
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Greg,
As you alwasy see me write, methods aren't prone to anything. Appraisers might be, though.
But that's OK, if it weren't for all these poorly written and conflicitng guideliness, right of way work wouldn't be so lucrative.
Besides income capitalization is where oppurnities really abound. You can lower estimated market rent, increase vacancy and use a higher cap rate all because of the same risk factor - and triple-dip. :new_multi:
As you alwasy see me write, methods aren't prone to anything. Appraisers might be, though.
But that's OK, if it weren't for all these poorly written and conflicitng guideliness, right of way work wouldn't be so lucrative.
Besides income capitalization is where oppurnities really abound. You can lower estimated market rent, increase vacancy and use a higher cap rate all because of the same risk factor - and triple-dip. :new_multi:
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Jimmie West
Freshman Member
- Joined
- Jan 10, 2007
Hello to all of you and thanks for your advice and interest in my dilemma. I haven't hired an appraiser, the one I spoke with referred me to an MAI that does do DOT work, but it sounds like it would cost a third of the value and damages to hire him from the sound of the posts here, and certainly if I were doing this for hire, my fee would be hefty, as the hours are long and the risk high.
So, to address some of the comments. Based on what I've now read and better understand, the appraiser used Form ROW A-6, which doesn't require him to appraise the parent tract, or appraise the remainder, or appraise the part to be acquired, to arrive at an estimate of damages. The Form A-5, would have required him to use that approach. I'm not clear in reading the ROW A-6 specifics in the Guidelines as to whether he should be using the parent tract as the basis for valuation adjustments. The heading of the appraiser's valuation clearly states that it is a "Land Valuation of the Part to be Acquired", probably will prove just semantics though, but I hope not. Evenso, if he is correct in using the parent tract, he then used very poor comparables in his analysis, there being adequate larger land tract sales in the area from the "5 year span of his diligent research".
On the damages to entry, he did not address them, and essentially the setback of the entry drive equivalent to it's current length, puts the gate within 3 yards of a 19' deep natural ravine, which is bridged. A ranch gate (this one is 12') swings forward to allow for adequate length of log trucks, livestock rigs, etc..., that's why you always have adequate length for drive up to a ranch gate. As it stands now, I'm expected to be able to put in gate and bracing posts within 3 yards of the edge of this ravine, and put in a post about 10' out to secure the opened gate to (which is within 2' of the ravine edge) which is all just nuts, it will destablilze the existing bank (such posts are typically set at a depth of 3' in the ground).
The property is on US Hwy 69 within about 2000' of the busiest intersection in the north of this county, that's why they're starting their project here, traffic count is high, which the appraiser also failed to mention. The 2.65 acres is of adequate size for business or commercial, which he even indicates in his H&BU comments.
Anyway, I'm going to keep working on it, and pull together what I can and check back here regularly, because it's been of great help to me.
Many thanks, Jimmie
So, to address some of the comments. Based on what I've now read and better understand, the appraiser used Form ROW A-6, which doesn't require him to appraise the parent tract, or appraise the remainder, or appraise the part to be acquired, to arrive at an estimate of damages. The Form A-5, would have required him to use that approach. I'm not clear in reading the ROW A-6 specifics in the Guidelines as to whether he should be using the parent tract as the basis for valuation adjustments. The heading of the appraiser's valuation clearly states that it is a "Land Valuation of the Part to be Acquired", probably will prove just semantics though, but I hope not. Evenso, if he is correct in using the parent tract, he then used very poor comparables in his analysis, there being adequate larger land tract sales in the area from the "5 year span of his diligent research".
On the damages to entry, he did not address them, and essentially the setback of the entry drive equivalent to it's current length, puts the gate within 3 yards of a 19' deep natural ravine, which is bridged. A ranch gate (this one is 12') swings forward to allow for adequate length of log trucks, livestock rigs, etc..., that's why you always have adequate length for drive up to a ranch gate. As it stands now, I'm expected to be able to put in gate and bracing posts within 3 yards of the edge of this ravine, and put in a post about 10' out to secure the opened gate to (which is within 2' of the ravine edge) which is all just nuts, it will destablilze the existing bank (such posts are typically set at a depth of 3' in the ground).
The property is on US Hwy 69 within about 2000' of the busiest intersection in the north of this county, that's why they're starting their project here, traffic count is high, which the appraiser also failed to mention. The 2.65 acres is of adequate size for business or commercial, which he even indicates in his H&BU comments.
Anyway, I'm going to keep working on it, and pull together what I can and check back here regularly, because it's been of great help to me.
Many thanks, Jimmie
Glad to be of help. This whole condemnation thing is out of control. The people who work for the agencies sometimes think they are doing "the taxpayers" a favor by screwing property owners one at a time.
That doesn't preclude appraising the part taken by itself if it has its own highest and best use apart from the parent tract. There was a case like that in Wisconsin a few months ago. The court sided with an appraisal that seemed to make it very obvious that part taken was a parcel unto itself. The state of course fought to the death insisting on compensation based on the value of the parent tract.
The booklet is not clear. It doesn't openly specify the elements of compensation by either endorising before-minus-after or specifiying the rules for offseting damages and benefits. The only thing I can tell from this distiance is that the reference to the Yellow Book and the statement that compensation is as defined in the CFR's tell me the rules are the same as the federal ones (before-minus-after).
That doesn't preclude appraising the part taken by itself if it has its own highest and best use apart from the parent tract. There was a case like that in Wisconsin a few months ago. The court sided with an appraisal that seemed to make it very obvious that part taken was a parcel unto itself. The state of course fought to the death insisting on compensation based on the value of the parent tract.
Imagine my surprise. I knew the appraiser's name and popped it into Google with the word plaintiff and out popped the appeals court ruling.
http://www.wisbar.org/res/sup/2006/2004ap003384.htm
"3) David Gagnow completed an appraisal for the DOT, which valued all five tax parcels, both before and after the taking, as one parcel; (4) Kurt Kielisch completed an appraisal for Spiegelberg based on the fair market value of each individual parcel, both before and after the taking and then calculated the sum of those values"
III. CONCLUSION
¶33 We conclude that Wis. Stat. § 32.09(6), which determines the method by which just compensation is to be determined for a partial taking, permits a flexible approach such that the individual characteristics of each property may be considered, according to each property's highest and best use, in order that the property owner receives just compensation for the taking. Because valuing the tax parcels separately produced a value consistent with the most advantageous use of this property, the circuit court correctly chose the method of appraisal employed by Bernice Spiegelberg's appraiser. Therefore, we affirm the decision of the circuit court that awarded $84,200 to the property owner."
http://www.wisbar.org/res/sup/2006/2004ap003384.htm
"3) David Gagnow completed an appraisal for the DOT, which valued all five tax parcels, both before and after the taking, as one parcel; (4) Kurt Kielisch completed an appraisal for Spiegelberg based on the fair market value of each individual parcel, both before and after the taking and then calculated the sum of those values"
III. CONCLUSION
¶33 We conclude that Wis. Stat. § 32.09(6), which determines the method by which just compensation is to be determined for a partial taking, permits a flexible approach such that the individual characteristics of each property may be considered, according to each property's highest and best use, in order that the property owner receives just compensation for the taking. Because valuing the tax parcels separately produced a value consistent with the most advantageous use of this property, the circuit court correctly chose the method of appraisal employed by Bernice Spiegelberg's appraiser. Therefore, we affirm the decision of the circuit court that awarded $84,200 to the property owner."
Jimmie West
Freshman Member
- Joined
- Jan 10, 2007
Steven, I don't suppose you'd be open to my emailing you a doc with rthe eview I've prepared so far? It occurrs to me that certain language may more appropriately be used, and I know I tend to get maybe to offensive and aggressive in approach to this sort of thing, and I'm quite sure I need to be as diplomatic, yet accurate, as possible in this rebuttal. Also, it's not like I've done this before in this sort of situation, as opposed to a review for a bank and not being held to a format, but mostly just to good analysis. Since I can't, unless I were to get a scanner, email you the state's appraisal, it may perhaps be thought pointless to review my rebuttal, but at the Very Least, I would get some idea if the language and point of view were acceptable in the appraisal world.
Thanks for taking a look at the ROW A-6 description, I've read it again and again, and just can't see anything specific as to valuing the parent tract as whole, as what was done with this one, or valuing the part to be acquired separately, and maybe that leaves it open to the appraiser to take whatever approach they wish. You'd think though it would be clear as it appears to play the role of a quick and dirty appraisal rather than a thorough valuation as required by A-5.
I thought I'd also let you know, and every one else joining in here, that I am focused on this parcel the state is taking to the exclusion at the moment, because I must also deal with an approx. 10 acre tract that requires my repsonse by Feb. 1st. The larger parcel is contiguous with this one and begins at the corner of this major intersection. I run a cattle ranch, a registered seedstock operation, and that is the primary function of all this acreage, about 212 in total, and as I state in my rebuttal, it's by choice, not because the frontage property doesn't have commercial value for other purposes, and I recall asking the state appraiser when he was here so many months ago, if there was any consideration given to loss of land to support X number of cows, would he be considering an income approach to value, and would he need info from me for that. His response was a flat no, that the State would compensate me for the pasture land taken well enough to go out and 'buy' a comparable amount of land to raise those same cattle.
The income approach discussion got me thinking about this. I can project out, and fully justify, the net income from a breeding cow over X years, and get well above the state's appraisal, but I wonder at the need to spend all that time doing so, if it's really just going to be for nothing. I think I'm getting a bit worn out with putting on this appraiser hat, though to a large extent I'm enjoying it, I have to admit, until I start in reading the state regs again, and it's so obvious the focus and purpose is to.............just...whatever. At this point I have found myself wondering aboutthe other property owners around here and what they've overlooked, what they've accepted from the State, and I'm not just real happy with Texas when I think about that.
Thanks for taking a look at the ROW A-6 description, I've read it again and again, and just can't see anything specific as to valuing the parent tract as whole, as what was done with this one, or valuing the part to be acquired separately, and maybe that leaves it open to the appraiser to take whatever approach they wish. You'd think though it would be clear as it appears to play the role of a quick and dirty appraisal rather than a thorough valuation as required by A-5.
I thought I'd also let you know, and every one else joining in here, that I am focused on this parcel the state is taking to the exclusion at the moment, because I must also deal with an approx. 10 acre tract that requires my repsonse by Feb. 1st. The larger parcel is contiguous with this one and begins at the corner of this major intersection. I run a cattle ranch, a registered seedstock operation, and that is the primary function of all this acreage, about 212 in total, and as I state in my rebuttal, it's by choice, not because the frontage property doesn't have commercial value for other purposes, and I recall asking the state appraiser when he was here so many months ago, if there was any consideration given to loss of land to support X number of cows, would he be considering an income approach to value, and would he need info from me for that. His response was a flat no, that the State would compensate me for the pasture land taken well enough to go out and 'buy' a comparable amount of land to raise those same cattle.
The income approach discussion got me thinking about this. I can project out, and fully justify, the net income from a breeding cow over X years, and get well above the state's appraisal, but I wonder at the need to spend all that time doing so, if it's really just going to be for nothing. I think I'm getting a bit worn out with putting on this appraiser hat, though to a large extent I'm enjoying it, I have to admit, until I start in reading the state regs again, and it's so obvious the focus and purpose is to.............just...whatever. At this point I have found myself wondering aboutthe other property owners around here and what they've overlooked, what they've accepted from the State, and I'm not just real happy with Texas when I think about that.
GKCOX
Freshman Member
- Joined
- Dec 20, 2006
- Professional Status
- Certified General Appraiser
- State
- Kentucky
Jimmie:
I assume you are referring to the fact that this is a decision to possibly agree on compensation prior to the condemning authority filing a petition to acquire your land under the laws of eminent domain. While I would highly recommend you engage the services of an impartial competent appraiser, I see no reason why you cannot proceed in stating your facts and opinions. After all the land belongs to you until the court says otherwise. If you wish to comply with USPAP relative to your interest in the property you simply detail this throught the report and the certification.
I would again caution you to engage competent counsel and expert advice because you willonly get one bite at the apple.
George K. Cox, MAI, SRA
I assume you are referring to the fact that this is a decision to possibly agree on compensation prior to the condemning authority filing a petition to acquire your land under the laws of eminent domain. While I would highly recommend you engage the services of an impartial competent appraiser, I see no reason why you cannot proceed in stating your facts and opinions. After all the land belongs to you until the court says otherwise. If you wish to comply with USPAP relative to your interest in the property you simply detail this throught the report and the certification.
I would again caution you to engage competent counsel and expert advice because you willonly get one bite at the apple.
George K. Cox, MAI, SRA
Jimmie West
Freshman Member
- Joined
- Jan 10, 2007
Yes, George, I'd rather agree on compensation and avoid an eminent domain process. You know even Crossland Acquisition, who is handling the negotiations for this project, has said much the same thing, I will only have this one shot to present myself. You know every day I consider biting the bullet and finding a lawyer to handle this, but the more I read of the state appraisal manual, the more I see that there's just not much anyone can do, and I'm told some woman recently left a Texas court room in tears because she lost and lost badly her fight for market value, of course she may have been being greedy, who knows.
Anyway, I have found a checklist of sorts under the heading Appraisal Review Guide, which details the specific items that must be in a TxDot appraisal using Form ROW A-5, and for Form ROW A-6. I can't locate this section in the Manual link Steven provided, found it doing a search for row a-6 "part to be acquired" .
My opnion now is that the appraiser correctly used the entire parent tract acreage as the subject property, but, two of his three comps are small acreage parcels, and one is from 2005, and for none did he adjust for anything but size. Current comps of appropriate size and proper application of adjustments, present a much different picture of the value of this property.
The checklist even indicates he should have included a few other items in regard to the parent tract that are completely not there.
Anyway, I have found a checklist of sorts under the heading Appraisal Review Guide, which details the specific items that must be in a TxDot appraisal using Form ROW A-5, and for Form ROW A-6. I can't locate this section in the Manual link Steven provided, found it doing a search for row a-6 "part to be acquired" .
My opnion now is that the appraiser correctly used the entire parent tract acreage as the subject property, but, two of his three comps are small acreage parcels, and one is from 2005, and for none did he adjust for anything but size. Current comps of appropriate size and proper application of adjustments, present a much different picture of the value of this property.
The checklist even indicates he should have included a few other items in regard to the parent tract that are completely not there.
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