Condemnation Appraisal

The expansion of our utility and transportation infrastructure in the United States is paramount for an efficient economy; however, our rights as property owners are protected. If a government entity or any agency wants to condemn or acquire any property by means of eminent domain or negotiation it must offer “just” compensation, this protects the constitutionally granted 5th Amendment right to own land free from seizure by the government.

A federal condemnation will require a different analysis and report format than a state or local taking. The jurisdiction proposing to condemn the property is likely to have its own rules for appraisal that must be followed. It is important to hire an appraisal firm 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. The government may petition to take only part of, or a partial interest in, the 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.  It is also necessary for the appraiser to determine his or her opinion of value on the “remainder” before the taking and after the taking to determine any damages to apply to the compensation to be received. For many condemnation appraisals, 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 appraiser with experience and training.

Because an appraiser may often have to testify about his or her condemnation appraisal, 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 appraiser/company that has experience and training. We perform work for government clients and individual property owners to provide “just” compensation in eminent domain cases. A USPAP-compliant appraisal is the best way to determine market value of any property. Our training includes courses by the Appraisal Institute and the International Right of Way Association (IRWA) on all topics of condemnation procedures and appraisal practices.

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