Eminent Domain Appraisal

Eminent Domain

In an eminent domain proceeding, its your right to obtain an independent appraisal. If the state wants to condemn your property, or take it from you by means of “eminent domain,” it must give you “just” compensation. In addition, the plantiff (condemnor) generally pays the defendant up to $5,000 for appraisal fees.

In eminent domain State DOTs use their own condemning authority and hold title to acquired property, unlike a direct Federal acquisition. As such, they are not subject to the “yellow book”, however, they are subject to the Uniform Act requirements and its implementing regulations found in 49 CFR Part 24. An appraisal for eminent domain must comply with the Uniform Act requirements and the Uniform Standards of Professional Appraisal Practice (USPAP) unless a jurisdictional exception applies.

In an eminent domain there are many legal and procedural issues involved in an accurate real estate appraisal. A federal condemnation will require a different analysis and report format than a state or local taking. And in any event, the jurisdiction proposing to a take of the property is likely to have its own rules for appraisal that must be followed. It is important to hire an appraiser that has experience and training in these types of valuations.

An eminent domain action may reserve certain rights in the property to the current owner. A state or local government may petition to take only part of, or a partial interest in, the real property. This requires the appraiser to value the “larger parcel” – the currently undivided, contiguous property – and the “remainder” of the property, or rights to use the property, that will be held by the owner after condemnation and factor that into the overall value of the taken property. For an added wrinkle, it will often be necessary for the appraiser to determine his or her opinion of value on the “remainder” before the taking and after the development or use prompting the taking, because they are likely to be very different.

Likewise, appraisers always consider a property’s “highest and best use” when formulating an opinion of value. In eminent domain, it is necessary to consider the highest and best use of the property before taking and after the development or use resulting from the taking. Again, it is important to have a professional appraisal from an experienced and trained eminent domain valuation specialist. Each geographically located appraiser selected specializes in Orange County, Los Angeles County, Riverside County, San Bernardino County and Ventura County.

Because an appraiser may often have to provide expert testimony about his or her real estate appraisal in an eminent domain case, it is important that certain steps in valuation methodology — such as selecting and analyzing comparable sales — be performed more thoroughly. You rely on your appraiser to know what’s necessary, so again, it’s important to select an appraisal company that has experience and training in eminent domain valuations.

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