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Eminent Domain and Real Estate Valuation Blog

Condemnation and Real Estate Litigation

Orlando Avoids Eminent Domain For Soccer Stadium

Posted in Eminent Domain

Orlando City Soccer will apparently purchase a necessary property to build its new soccer stadium rather than rely upon the City’s power of eminent domain. The City of Orlando previously was proceeding to acquire the property though the exercise of its power of eminent domain.  However, apparently concerned that it could not then transfer the property to a private entity, the City “unwinded” the process according to the City’s attorney.  It told the owner it was backing out of the eminent domain process, and convinced that owner to sell directly to Orlando City Soccer.

PA Considers Amendment To Relocation Law

Posted in Eminent Domain

The PA House is considering a bill that would amend the PA Eminent Domain Code’s relocation statute.  That statute applies where a business or residence is forced to relocate due to a condemnation and is in addition to damages for the loss of the real estate.  The bill would increase the reimbursement amount for “reestablish[ing] a displaced farm, nonprofit organization or small business at its new site” from $12,000 to $25,000.  It would also increase the additional amount paid to homeowners under certain circumstances from $27,000 to $31,000.  It is too early to predict the likelihood that this bill will become law.

Appraisal Foundation Adopts Green Valuation Advisory

Posted in Appraisers

The Appraisal Practices Board (APB) of The Appraisal Foundation has announced the adoption of the first of three Valuation Advisories related to the valuation of green buildings.  The Appraisal Foundation provides guidance to appraisers and is best known for its “USPAP” publication.

The Advisory, entitled “Valuation of Green and High Performance Property: Background and Core Competency,” offers voluntary guidance to appraisers on the background and competency necessary to credibly value green buildings and/or energy-efficient features. According to the Appraisal Foundation, these Advisories are part of an ongoing joint project with the United States Department of Energy (DOE) to develop guidance and educational materials for appraisers on green valuation. Representatives from the DOE are actively participating in the development of these Valuation Advisories as Subject Matter Experts (SMEs).

To view the Advisory, please visit:  https://appraisalfoundation.sharefile.com/d-s5f8aa66a58a41f09

Pa. Court Overturns $35M Reassessment

Posted in Uncategorized

PA’s Commonwealth Court found that Fayette County waited to assess a property owned by Duke Energy Corp until a tax abatement ended instead of assessing it when Duke Energy upgraded the property because it lacked the money to conduct a proper assessment and wanted to wait until the property was taxable. The Court overturned a trial court’s opinion, saying state law is clear that property assessments must occur when improvements are made on the property, not after.   “Here, although an outside appraiser would have been necessary and costly, the costs of the appraisal at the proper time is not a factor which the board had the luxury of weighing,” the Commonwealth Court explaine.

Duke used 60 acres to build a gas-fired electric-generating station and applied to enroll those acres in the Keystone Opportunity Zone tax abatement program. Duke finished construction on the station in 2003 and told Fayette County. But the county waited to assess the property because it felt the assessment would be expensive — about $25,000 to $50,000 — and it didn’t want to expend funds until the property became taxable and it could see a return on its investment.

Over 200 Properties To Be Taken For California Rail Project

Posted in Eminent Domain

It is projected that over 200 properties may be condemned for a high-speed rail project in California.  The California Public Works Board adopted 23 resolutions to acquire properties in Fresno, Madera, Kings and Tulare counties. The land, adding up to more than 115 acres, is deemed necessary by the California High-Speed Rail Authority for the first two construction segments of its statewide bullet-train network.  Since December 2013, the Public Works Board has adopted 230 such resolutions covering more than 625 acres of land in the four counties. The entire 520-mile line is estimated to cost about $68 billion by the time it is planned to be fully operational in 2028.

NC House Passes Eminent Domain Constitutional Amendment

Posted in Eminent Domain

North Carolina’s State House passed HB 3 which attempts to limit eminent domain powers.  The bill, which has 69 House sponsors and co-sponsors, would add language to the North Carolina constitution specifying that local and state governments can take private property with “just compensation” only for a “public use” and would guarantee a jury trial if requested by the condemnee.  Sponsor Rep. Chuck McGrady, stated his belief that these requirements are already in North Carolina law, but unlike most states, are not in its constitution.  It is the first step towards a ballot measure to amend the NC Constitution.

The US Constitution – and many other state constitutions – have a “public use” requirement that must be satisfied before the power of eminent domain can be exercised.  However, federal law – most notably restated in the infamous Kelo case, holds that the term “public use” means “public purpose” and does not mean that the public must be permitted to use the condemned property.  Rep. McGrady stated, “Some courts have talked in terms of a public purpose or public benefit, and with time, the test has gotten rather fuzzy or has morphed.”  “The bill will mean that a public use does not mean the taking of property in order to convey an interest in that property for economic development,” McGrady said. “We’re not trying to make new law here. We’re just trying to make sure North Carolina’s law stays what it is.”

Nearly identical provisions passed the House in 2013 and 2014 by overwhelming margins, and similar bills won House approval in prior years, but Senate leaders have refused to take up the matter.  It is currently in the Senate Rules Committee.  If passed by the NC Senate it will allow a ballot measure to amend the State constitution.

Interthinx Q4 2014 Report Indicates Mortgage And Property Valuation Fraud Risk

Posted in Valuation

According to Interthinx, Inc., a subsidiary of First American Financial Corporation, the “National Mortgage Fraud Risk Index” increased 3 percent from the last quarter, and is unchanged from one year ago.  However, the “Property Valuation Fraud Risk Index is down 2 percent from Q3 2014.  According to the report, Florida is the riskiest state this quarter with Property Valuation and Occupancy Fraud Risk being the main drivers of Florida’s overall risk index.  Mortgage fraud risk is also rising in MSAs in Texas, Oklahoma, Kansas and the Dakotas.

Eminent domain Restrictions Approved By Iowa House, Senate panels

Posted in Eminent Domain

Legislation making it more difficult for private utilities to acquire access to private property through condemnation cleared two Iowa subcommittees.  Subcommittees in both the Iowa House and Senate approved Senate Study Bill 1276 to change the process for private companies to build underground pipelines and overhead transmission lines. The bill, according to House Government Oversight Committee Chairman Bobby Kaufmann, R-Wilton, would require projects be recommended in the Iowa Economic Development Authority’s annual energy report and that proponents pay attorney fees for landowners who cannot afford their own attorney. It would prohibit companies from telling landowners that unless they sign voluntary easements their land will be condemned and they will be paid less for their land.  In addition, SSB 1276 would require companies to get voluntary easements from 75 percent of the landowners in the path of their projects before the Iowa Utilities Board would consider a request for condemnation.

The Bill now moves to the full House and Senate.

Virginia Supreme Court Permits Admission Of Condemnor Appraisal Used For Intial Offer

Posted in Eminent Domain, Valuation

The VA Supreme Court recently heard an interesting case involving facts that should be cautionary to litigants.  In that case, VDOT made an initial offer to the property owners of $246,292 based on an appraisal.  When the condemnees rejected the offer, VDOT obtained another appraisal estimating the damages at $92,127.  VDOT told the condemnees that they could either accept the offer or VDOT would only present the lower appraisal at trial.

The condemnees would not agree to the initial offer and at trial the jurors were only allowed to hear the lower value.  The condemnees ultimately appealed to the VA Supreme Court alleging, in essence, that the VDOT engaged in an improper use of its power and the jurors should be permitted to hear the story of the negotiations.  The Court agreed and held that allowing the jury to hear the whole story – the initial appraisal and the state’s explanation for why subsequent appraisals were less – provides a “limited and wholly appropriate check on the broad powers of the state in condemnation proceedings.” The justices ordered a new trial for the condemnees.

FL. SC To Consider If Fee Award Statute Is Unconstitutional In Cases With Excessive Litigation Caused by Condemnor

Posted in Eminent Domain

The Florida Supreme Court is considering whether a statute used to calculate attorneys’ fees in Florida eminent domain cases is unconstitutional when applied in the event of excessive litigation by the condemning authority.  The condemnor in that case is the Central Florida Expressway Authority and the jury returned a verdict valuing the property at more than $5.7 million. The court found that the counsel for the property owners obtained a benefit of $832,000 for their clients after considering the difference between the original offer and the verdict. The Florida fee award statute mandated a fee award of close to $228,000 and the attorneys also were to receive nearly $118,000 pursuant to their contract with the owners.

The property owners argued the statutory fee was unconstitutionally low due the number of hours expended to respond to allegedly excessive litigation by the Expressway Authority.  The case is Joseph B. Doerr Trust et al. v. Central Florida Expressway Authority et al., case number SC14-1007, in the Supreme Court of Florida.