Eminent Domain, litigation and related issues make up a rather specialized discipline in Real Estate Appraisal generally referred to as condemnation. In fact, a substantial number of properties are acquired and/or leased by government and government agencies without actual condemnation, which is the court action taken to enforce the government’s right of Eminent Domain. Real Estate Appraisers are often initially involved in the process as “consultants in feasibility” where the government agencies may include our services to “test the waters” in order to analyze budget requirements for a proposed project. Many times the appraiser’s involvement stops here.
Next, the Appraiser may be asked to perform valuations services which may include acquisitions of whole properties, partial acquisitions, easement acquisitions, etc., depending on the scope of the government project. In addition to valuation of properties acquired, a determination of potential damages to the remaining property may need to be shown. Appraisals of this nature are often obtained for negotiators.
Certain arms of government that have the right of Eminent Domain operate differently. Entities such as local municipalities, county governments, school districts, junior college districts, state departments of transportation, natural resources, public service and assistance departments, sewer and water departments, building and housing departments, sports authorities, park districts, environmental agencies, toll road and highway authorities, as well as Federal agencies such as the National Park Service and the Army Corps of Engineers, have varied and specific requirements for appraisers with regard to Eminent Domain and subsequent Condemnation. In fact, federal agencies generally utilize a series of standards, the Uniform Appraisal Standards for Federal Land Acquisitions, commonly referred to as the “yellow book.” When considering potential litigation, emphasis is given to the requirements of discovery, verification, documentation and reporting which may differ from any other type of appraising background.
Finally, if actual acquisition negotiations prove unsuccessful, appraisers may be deposed and testify on behalf of the client. The appraisers, as well as the appraisal report become part of the public record. Again, the process is unique as the appraiser must prepare for court and be available to share his/her valuation insight, knowledge and appraisal application, practices and procedures (USPAP) with attorneys trying the case. This special knowledge can provide counsel with additional litigation support by ascertaining the reasonableness of opposing appraisal reports.