PA law requires that challenges to condemnations must be filed within 30 days of service of the Declaration of Taking. The document that is filed challenging the taking is called “Preliminary Objections.”
HB 2387, currently being considered in the PA House of Representatives, would increase the time for filing the Preliminary Objections to 90 days. This would be a significant change. A condemnee is required to properly state all of its objections within 30 days. Failure to include an objection may waive the ability to assert that objection. Therefore, it places significant pressure on the condemnee to file its challenge correctly and asserting all of its challenges within the 30 day period. Increasing that period to 90 days would help alleviate that pressure.
The PA Senate is considering a bill which would make minor changes to the PA eminent domain statute providing for reimbursement for professional fees and expenses. Generally, PA requires reimbursement for up to $4,000 for those fees and expenses. If enacted, SB 1096 clarifies that this payment is owed “per property, regardless of right, title or interest [of the claimant].”
It also would change the statute, 26 Pa.C.S.A. § 710(a), to only provide for a reimbursement of $1,000 “where the taking is for an easement related to underground piping for water or sewer infrastructure.” This would be the only distinction based upon the purpose of the taking.
We recently had a significant victory in a large tax appeal case in Allegheny County, PA. The property included 2 office buildings that were being transitioned from a single tenant to a multi-tenant property. There were 2 years under appeal and, prior to our challenge, the assessed fair market value was $49 million. Our appraised values were $16.7 million and $21 million. The taxing authority’s appraised values were $20 million and $30.9 million. I attempted to settle the case, but the taxing authorities were not interested in a reasonable resolution. It went to a full hearing and the award was for our exact values. The taxing authorities did not appeal the decision.
A part of California’s statutory eminent domain law has been declared unconstitutional. The Third Appellate District Court of Appeal ruled in Property Reserve, Inc. v. Super. Ct. of San Joaquin County that pre-condemnation entry statues violate California’s version of the US Fifth Amendment’s taking clause – Article I, Section 19 of the California Constitution. This will make it more difficult for condemning authorities to conduct pre-condemnation planning. The Court ruled that any entity wishing to conduct statutory pre-condemnation studies must do so after filing a condemnation action.
California’s eminent domain statutes permit a condemnor to enter a property to conduct surveys, engineering tests and appraisals prior to the initiation of a condemnation action. Most states have similar statutes.
The Property Reserve Court ruled that the condemning authority’s proposed geological tests constituted a taking and found that the pre-condemnation entry statutes are unconstitutional. There will undoubtedly be an appeal.
The city of Orlando initiated eminent domain proceedings to take property owned by a church to build a new soccer stadium. A judge ruled in January that Orlando could take the property via its eminent domain powers. Orlando spokesperson Heather Fagan issued this statement:
”We have spent the last year trying to work with the Williams family [which owns the church]. The City was willing to pay the Williams family a fair amount–substantially more than the appraised value plus relocation costs, but the City has to balance this with our duty to safeguard the assets of the City. When the Williams family retreated to their original demand of over $30 million we had no choice but to take this issue to the courts for resolution.”
Each state has its own set of appraiser regulations. Although there are substantial similarities, they can vary. The Appraisal Institute has assembled a document titled “Provisions of State Appraiser Licensing and Certification Laws Applicable to Appraisal Review” which is available free to its members and may be purchased by non-AI professionals. The document provides information on state agencies, definitions, certification and/or licensing requirements, as well as appraisal management company requirements.
According to an article in the Appraisal Institute’s Valuation magazine, litigation regarding appraisal reviews has been increasing. One possible explanation cited in the article is that there are simply more appraisal reviews. It also states that some review appraisers lack the necessary competency to perform the work.
One of the major categories of claims is for those used in loan origination/purchasing. In essence, appraiser reviewers have the same potential liability as those who actually perform the appraisal. The second major category is defamation claims. In these cases, the appraiser whose work is reviewed may be offended or injured by a negative review.
The PA Superior Court recently addressed issues regarding determining the fair market value of property in the context of a “deficiency judgment” proceeding. In Liberty Philadelphia REO, LP v. EFL Partners V, L.P., the Superior Court held that it was proper in that case to fix the fair market value of condominiums based on the developer’s approach. The appellee argued that the appraiser employing that approach used the “bulk sales” approach which it claimed was prohibited by Cheltenham Federal Savings and Loan Associations v. Pocono Sky Enterprises, Inc., 451 A.2d 744 (Pa. Super. Ct. 1982). The Court held the appraisal was proper and that Cheltenham did did not reject the bulk sales approach in all circumstances.
One of the hot issues in the PA Governor’s race is natural gas drilling. One small component of that is a utility’s power of eminent domain. State Treasurer Rob McCord (Dem.) has stated that he would seek to rescind the power of eminent domain by a company developing a natural gas storage facility.
The New Jersey legislature is considering a bill that would abolish NJ’s Real Estate Appraisers Board and transfer regulation of appraisers to the state’s Real Estate Commission. Bill A2387 was unanimously passed by the Regulated Professions Committee March 13. The Appraisal Institute strongly opposes the bill. The Bill’s sponsors, Troy Singleton, and representatives of the Appraisal Institute are scheduled to meet. A copy of the bill can be found at http://www.njleg.state.nj.us/2014/Bills/A2500/2387_R1.HTM