It's not just a good idea and not just the law. It's your constitutional right!

If the government wants to condemn your property or take it from you utilizing eminent domain, you must receive "just compensation". Just compensation must be paid according to the Fifth Amendment to the U.S. Constitution (and counterpart state constitutions) when private property is taken or damaged for public use. For reasons of expedience, courts have generally been using fair market value as the measure of just compensation, reasoning that this is the amount a willing seller would accept in a voluntary sales transaction and, therefore, it should also be payable in an involuntary one. However, the U.S. Supreme Court has repeatedly acknowledged that fair market value, as defined, falls short of what sellers would demand and receive in voluntary transactions.

Condemnation appraisals are not simple. There are many legal and procedural issues involved in an accurate condemnation appraisal. A federal condemnation will require a different analysis and report format than a state or local condemnation. Hiring an appraisal firm with experience and training in these valuations is essential.

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. For an added wrinkle, it will often be necessary for the appraiser to determine the value of the "remainder" before the action and after the development or use prompting the taking because they are likely to be very different.

If you have reached this page, you most likely have an issue with a government agency approaching you about taking your property or gaining a right to do so.  Rest assured, it's not as bad as most think.  First, keep in mind this is not much different than a private party wanting to purchase your land or use it by buying a right. Most of the time, it's a right they wish to gain.  You won't lose your property thoroughly and will be paid a fair market value. The difference here is that you can challenge the agency in court. Sometimes, the property owner wins big; other times, the deciding authority gives the fair market value.  Remember that by the time you pay the appraiser fee, legal representation can eat into the settlement.   The agency obtaining the property starts off by ordering an appraisal since by law, they are required to offer fair market value to the property owner. Usually, the Sales Comparison Approach is used based on vacant land. The courts will not recognize business loss per the Uniform Appraisal Standards for Federal Acquisitions, the Federal Government's book on guidelines for land acquisitions. Sometimes referred to as the "Yellow Book."  This book is used if the govt agency does not have its own guidelines for land acquisitions.

 Sometimes, it is just a small part of the property, and how much is it worth?  What does it affect?  An easement may have already encumbered it, and placing another easement on the property has less impact. This is where a good appraiser with knowledge of easements comes in.  At RU Appraisals, LLC, we have the knowledge to help you with a fair market valuation. You most likely will want to compare the value that the agency comes up with vs. your appraisal. A reminder it does not include the value of business loss.  Something you can consult an attorney on as well.  

Since an appraiser may have to testify in court, specific steps in valuation methodology -- such as selecting and analyzing comparable sales -- must be performed thoroughly.  The appraiser must have the knowledge of the particular type of appraisal performed. One of the first mistakes an appraiser makes is not using vacant land but improved land unless the taking is impacting the improvements.  Just compensation is based on vacant land. Locating those sales requires research, and the level of analysis required should be handled by someone with experience in asking the right questions.  One also has to know if the site is contaminated, whether it's the subject property or the sales. What does one do with that knowledge? Again,  one with experience knows.

Another issue that one might encounter is a property in a redevelopment zone. How does one handle that type of property? Are all properties equal throughout the municipality?  How does this affect value?  Does the area involve land speculators pushing up values?

Typically, it's an easement the agency wants or a right to enter upon your land to do the necessary work if it's construction, water, or sewer lines. The rights come in a bundle or collective group of rights, which is what we in the appraisal business call a bundle of rights that runs with the land.  Usually, it's one of those rights the agency is seeking out.  An appraiser performs a before and after value of the land to determine the easement's impact on the property. Once they determine the fee value on a price per square foot or acre, they then selects a percentage of the fee value for the easement. Then the agreement comes into play they are impacting my setbacks or minimal lot requirements.  Based on my experience, the local government does not penalize a taking from a government agency.

Similarly, if they are acquiring a temporary easement, the same procedure is followed with the exception of a duration or the time that the agency will be on the property. This is based on a rental rate for the land. If one would like to simplify it, they can say it's the rental value of the land, much like renting a building or office for a duration of time.

A fee taking or taking of the whole property and appraisal is done following the guidelines for condemnation procedures.  Again, the Yellow Book contains the guidelines that appraisers use unless the agency directs the appraiser otherwise.

Since an appraiser may have to testify in court, specific steps in valuation methodology -- such as selecting and analyzing comparable sales -- must be performed thoroughly.  The appraiser must have the knowledge of the particular type of appraisal utilized. One of the first mistakes an appraiser makes is not using vacant land but improved land unless the taking impacts the improvements.  Most of the time, the agency pays only for vacant land. Locating those sales requires research, and once discovered, the necessary level of analysis should be handled by someone with experience in asking the right questions.  One also has to know if the site is contaminated, whether it's the subject property or the sales. What does one do with that knowledge? Again, experience knows.

I hope this page sort of hits on the highlights of condemnation, along with showing you our firm has the knowledge and experience to help you with your valuation issue. Ray has worked in the condemnation field as an appraiser since 2004 and recently retired from NJDOT.. Please don't hesitate to call the office and talk about your situation.  If we can't help, you may be at least direct toward someone who can.

Browse our website to learn more about our qualifications, expertise, and services offered.

 Contact Ray @ 609-203-1194 or text: email me at raymondunderhill@gmail.com

https://www.ruappraisals.biz/aboutraymondunderhill