The Appraisal Institute has been advocating the use of alternatives to the Uniform Standards of Professional Appraisal Practice (“USPAP”). USPAP is provided by the Appraisal Foundation and is described as “the generally accepted standards for professional appraisal practice in North America. USPAP contains standards for all types of appraisal services.” The Institute’s Florida government relations leaders and staff met with the Florida Real Estate Appraisal Board in October and December to discuss the possibility of the FREAB allowing state-licensed and state-certified appraisers to utilize standards of valuation practice other than the Uniform Standards of Professional Appraisal Practice when performing non-mortgage lending, non-federally related appraisal assignments. A similar meeting was held with the Montana Board of Real Estate Appraisers on Dec. 9.
According to the Institute, a rulemaking proceeding will commence in Florida in early 2016, and all stakeholders will have input into the development of rules allowing for the use of alternate valuation standards. In Montana, the next steps have not yet been finalized.
The Texas Legislature has directed the Texas comptroller of public accounts to assemble an online database of entities claiming eminent domain powers in Texas. They recently opened the online reporting form for these entities and expect to have the completed database ready later this year. The database will include contact information for each entity, the legal provisions granting it eminent domain authority and the focus or scope of that authority among other data. The statute provides for up to a $2,000 civil penalty for entities that don’t provide their information.
Sen. Rand Paul said at a recent Iowa town hall meeting that as president he would never let the government “take away private property and give it to somebody else” through eminent domain. The Kentucky senator said while he is in favor of creating energy independence by building domestic pipelines, he is opposed to any land being taken from private property owners without proper compensation.
“One of the worst powers, one of the most egregious powers you can give a government is the power to take your property,” he said. “And we have a government that’s grown too large in this sense.” Paul said while he supported the Keystone XL pipeline, he said he voted against a bill that would allow the use of eminent domain to gain easements.
“I don’t think it’s a good idea to use eminent domain for private enterprises,” Paul said. “Here in Iowa, (the Bakken pipeline) would have to go through a utility commission, but if I were on the utility commission I would vote that it doesn’t sound like it’s a utility to me, it sounds like it’s a private enterprise.”
Donald Trump’s position on the use of eminent domain has once again be raised by his critics. One example they cite is that he used that power to expand his Atlantic City casino over 20 years. Trump had the New Jersey’s Casino Reinvestment Development Authority take Vera Coking’s for his project. “Cities have the right to condemn for the good of the city,” Trump told ABC News at the time. “Everybody coming into Atlantic City sees this terrible house instead of staring at beautiful fountains and beautiful other things that would be good.” Trump wanted to build a limousine parking lot on Coking’s lot.
The Club for Growth, a conservative lobby, ran a television ad in Iowa in October saying Trump supports “massive new power to take private property and give it to corporations.” In New Hampshire, an anti-Trump super-PAC called Make America Awesome began running radio ads last week criticizing Trump on this issue. “He’s even used government power to seize private property — and brags about it,” the narrator says.
Trump has been consistent in his opinion. Trump, when asked about the controversial Kelo decision in 2005, said he backed it “100 percent.” He told Fox News in October: “If somebody has a property in the middle of a 7,000-job factory, as an example, that’s going to move into the town, but they need this one corner of this property, and it’s going to provide 7,000 jobs in a community that’s dying, of which we have many in this country, OK? I am for that.”
South Carolina State Representative Bill Herbkersman recently wrote a newspaper column explaining the State’s legislative agenda for 2016. The first issue he named was “a reform of eminent domain.” He stated that, “The condemnation action is serious business and is not usually considered except in legally defined circumstances. That said, there are times when private entities are allowed to request eminent domain for projects with a certifiable public benefit. Unfortunately, this private condemnation process has been, from time to time, used in what many of us think are questionable circumstances.”
As to the nature of the reform, he stated, “Our reforms will tighten up the language so as to make absolutely certain that the condemned property is for public use, and that it will never be diverted to private control.” So, 10 years after the infamous Kelo decision, eminent domain reform remains a hot button issue.
Eminent domain statutes generally provide for reimbursement of relocation expenses incurred by condemnees. These amounts are in addition to other potential damages such as the value of the condemned property. Both the Pennsylvania Senate and House are considering bills that would increase the limits of the amounts that could be reimbursed to condemnees for relocation expenses. Those bills would increase the cap for damages to reestablish businesses and farms operations from $12,000 to $25,000. It also would increase the cap for displaced homeowners from $27,000 to $31,000 and residential tenants from $6,300 to $7,200.
Eminent domain once again appeared as a topic in the Republican Presidential race. Kentucky Sen. Rand Paul appeared at an Iowa farm to criticize the use of eminent domain for a pipeline project proposed in that state. “There are times we have to use eminent domain for roads and things like that, but for this, if it is going to another private property owner, I don’t think the government should be taking property through eminent domain,” Paul said.
The Florida Supreme Court ruled Thursday that a formula in the state law used to calculate attorneys’ fees in state eminent domain cases is unconstitutional where there is excessive litigation by the condemning public authority. The Court issued its ruling in response to a certified question of great public importance from the Fifth District Court of Appeal, arising out of a dispute between a group of condemnees against the Central Florida Expressway Authority.
The Court stressed the importance of preserving private property owners’ right to full compensation in eminent domain cases under the Florida Constitution, while maintaining consideration of the Florida Legislature’s previous actions setting the benefits-achieved formula for calculating attorneys’ fees. “We conclude that where private property owners are forced to defend against excessive litigation caused by a condemning authority, a mandatory statutory formula that generates a fee award below that which is considered reasonable denies those property owners their right to the full compensation that is guaranteed by the Florida Constitution,” Justice R. Fred Lewis wrote in the Supreme Court’s opinion.
The Supreme Court declined to attempt to define what constitutes excessive litigation, saying only that it is generally litigation that “diverges from what both trial courts and the legal community would normally expect” in a standard eminent domain case, and that the state’s trial courts are best suited to make that determination.
The impact “green” aspects of a property has on its value continues to be a subject of study and debate. The Appraisal Institute recently reported that a study by a member specializing in the valuation of green homes found that homes with host-owned solar photovoltaic energy systems are sold at a premium compared to homes without PV systems.
Sandra K. Adomatis, SRA, of Punta Gorda, Florida, served as the lead author of the study, which engaged a team of seven appraisers, with the support of the U.S. Dept. of energy, across six states to determine the value added to homes with host-owned PV systems. The study – “Appraising Into The Sun: Six-State Solar Home Paired-Sales Analysis” – compared comparable sales of 43 homes in six states: California, Florida, Maryland, North Carolina, Oregon and Pennsylvania. The study can be found at: https://emp.lbl.gov/sites/all/files/lbnl-1002778.pdf
Members of the Arkansas Congressional Delegation have introduced legislation aimed to give more leverage to states faced with new interstate power-line projects. Sen. John Boozman and Rep. Steve Womack have submitted matching versions of the Assuring Private Property Rights Over Vast Access to Land, or APPROVAL, Act, which would rewrite Section 1222 of the 2005 Energy Policy Act in the House and Senate. They recently testified before a house subcommittee in support of their bills
The bill is a response to a proposal by Clean Line Energy Partners of Houston to construct a $2 billion, 700-plus-mile, 3,500 megawatt, high-voltage-direct-current power line from Great Plains wind farms to the Tennessee Valley Authority. The APPROVAL Act would require the Department of Energy to obtain approval from a governor and state public service commission prior to approval of any Section 1222 transmission project and subsequent use of federal eminent domain, as well as the approval of any tribal government for the affected lands.
“States and local communities must know their voices will be heard in the transmission siting process and that a transparent process will be followed,” Boozman said Wednesday to the House Natural Resources Committee’s Subcommittee on Water, Power and Oceans.