Selecting an Appraiser in Eminent Domain
In eminent domain cases, the offer made to the property owner reflects the value determined by an appraiser hired by the condemning authority. If you are undergoing eminent domain you should know that this value determination might not be accurate. The appraiser could have overlooked access issues or severance damages, or they may not have considered the property’s highest and best use. If an appraiser overlooks these damages, then the amount of compensation paid to you by the condemning authority will be less than what you are entitled to receive.
When property owners are presented with what they believe is a ‘low ball’ offer from the government, they typically exercise their right to another appraisal. What they oftentimes fail to realize is not all appraisers are equal, and not all appraisers will be appropriate for the assignment that they will be facing in an eminent domain case.
First of all, eminent domain is an oddball quirky area of the law. Eminent domain cases are not prevalent, which means many appraisers lack the experience necessary to accurately value property in eminent domain cases. The key issue in appraising property in eminent domain cases is knowing how to evaluate and determine severance damages, which is a valuation concept unique to these cases. If you hire an appraiser that doesn’t have the kind of experience or background with valuing property in eminent domain cases, then you could very well select on your own an appraiser who does not understand the full level of components and severance damages that should be included in your case to make sure you’re getting your full amount of just compensation.
Second of all, there are a lot of areas in eminent domain that are not black and white; it’s not always this way or always that way. I like to call them ‘gray areas’. These areas of grayness frequently arise in all the concepts that determine just compensation. Because of that, an appraiser is going to have a certain degree of latitude with regards to how they look at a particular issue; it’s not that one way is right or one way is wrong. In many assignments there are two possible different ways to evaluate a property and these differences may be grounded in an interpretation of law.
If you on your own select an appraiser that does a lot of work for condemning authorities, and that appraiser is confronted with a gray area that would have one way being what I’ll call a ‘government favored methodology’ and another way being a ‘property owner favored methodology’ chances are very high, since this is the only time you ever work with this appraiser, that he is going to simply default to what he’s normally accustomed to doing which is defaulting to the government’s appraisal methodology. If you select this appraiser without knowing this, you have effectively selected an appraiser that has not evaluated your case to the full extent that you might be entitled under the rules of eminent domain as they apply to private property owners.
I don’t want to say that the government’s methodology is always wrong, but with the many gray areas in eminent domain, selecting the wrong appraiser can be detrimental and even fatal to your determination of just compensation in your case. It’s very important to note that if you hire the wrong appraiser on your own and ultimately hire a new appraiser later, the original appraisal is still discoverable and can be used against you if your case has to go to court.
The key point to take away from this article is be vigilant about hiring an appraiser; I can’t stress enough the importance of speaking to an eminent domain attorney prior to hiring an appraiser on your own. This value determination directly affects the amount of compensation you will receive and you will more than likely not get a second chance if this is done incorrectly the first time. A property owner’s appraisal can make or break their case. If have any additional questions regarding appraisers, need a referral to one or are interested in a consultation with one of our attorneys, give us a call at 866-339-7242.