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Eminent Domain and Real Estate Valuation Blog

Condemnation and Real Estate Litigation

$22.5 Million Victory

Posted in Eminent Domain

You may recall a prior blog post regarding a case where we proved a “de facto” taking of a property.  A “de facto” condemnation – sometimes known as an “inverse condemnation” – occurs when a condemnor’s actions cause the equivalent of a taking before a declaration of taking is filed.  Our client was in the process of developing a property for residential condominiums.  PennDOT did not initiate a condemnation action until May, 2009.  We established that PennDOT’s actions caused a taking in December 2006.  As a result, the property will now be valued as of December 2006 and not May 2009.

We recently tried the damages part of the case before a “Board of View.”  PennDOT alleged the value of the condemned property was $6.75 million.  We presented evidence that the value was $25 million.  The Board entered an award of $22.5 million.

One other benefit of our de facto win is the amount of delay compensation – interest – owed to the property owner.  It will now be calculated beginning in December 2006 as opposed to 2009.  The amount will be substantial.

PennDOT will undoubtedly appeal.

St. Louis Eminent Domain Protest Held

Posted in Eminent Domain

A protest was held Sunday in North St. Louis to demonstrate against a city bill which would allow the city to condemn property in the city’s third and fifth wards.  The bill is part of attempts to encourage the new National Geospatial Agency facility construction to take place within city limits.

Homeowners spoke out in front of city leaders Sunday with the hope to save their homes.

The next hearing on the eminent domain bill is not yet scheduled.

CT State Senator Seeks To Ban Takings Of Intangible Property

Posted in Eminent Domain

A CT state senator wants to ban the Connecticut Department of Transportation’s ability to use its power of eminent domain to seize “intangible property,” such as bus companies’ licenses to carry passengers on specified routes.  CT Sen. Joe Markley, introduced a bill “to limit the state’s power of eminent domain to the taking of tangible real property” – and to “specify that such power does not extend to the taking of licenses or permits.”  “This radical expansion of eminent domain threatens every business person and property-holder in Connecticut,” Markley said.

The bill is a reaction to the DOT’s recent taking of four private bus companies’ long-standing licenses to carry passengers over certain routes.

DOT Commissioner James P. Redeker stated has said that the condemnation of the bus companies’ certificates is a continuation of a DOT effort dating back five years to put the companies’ commuter routes out to competitive bidding. He said such bidding wasn’t done decades ago when the companies obtained their certificates under a noncompetitive state regulatory system that he called “ancient.”

Idaho Sen. Seeks To Restrict Eminent Domain Powers

Posted in Eminent Domain

The Idaho Senate recently passed a bill which would prevent the use of the power of eminent domain to create hiking trails, bike paths or greenways. The bill, SB 1044, passed the Senate 20-13. It bans the use of condemnation “for trails, paths, greenways or other ways for walking, running, hiking, bicycling or equestrian use, unless adjacent to a highway, road or street.”

Critics of the bill argued that it could prevent cities from creating greenways or even to create safe walking routes to school for kids.

Sen. Jim Guthrie, the bill’s sponsor, compared the power of eminent domain to his sister once being robbed at gunpoint at the family’s grocery store. “Even though he didn’t fire the gun, there’s no question in my mind that he used it,” Guthrie said. “How fair is it, when at the beginning of the negotiation process the other party has something in their tool bag, as the cities put it, that you don’t?”

The bill now goes to the State House of Representatives.

$1,250,000 Award

Posted in Eminent Domain

I recently litigated a partial taking of a truck stop outside of Harrisburg, PA.  The most significant impacts to the property were caused by the closure of one of the driveways.

The condemnor claimed that the taking did not cause any damages.  We were able to prove that the taking caused significant damages to the functionality of the property.  The Board of View award $1,250,000.

As with many cases, it was important in this case to present experts in addition to an appraiser to further support the appraiser’s opinions.  A critical component of proving the impact was presenting industry experts including a nationally recognized truck stop expert and an engineer.  They established the real impacts of the closure of the driveway.

Pa. Commonwealth Court Addresses Tax Sales Notification Requirements Tax Sales

Posted in Valuation

The Pennsylvania Commonwealth Court recently ruled that the failure of a local sheriff’s office to include a return of service document in filings related to a disputed tax sale violated notification requirements under state law.  In that case, the allegation was that the Montgomery County Tax Claim Bureau failed to comply with notice provisions because affidavits filed in court by the county sheriff did not include notice of the tax sale.  “In this case, Bureau relied on the affidavits to meet its burden of proving compliance with all applicable statutory notice requirements,” ” Judge Patricia McCullough said in the opinion. “However, because the affidavit of personal service did not include the copy of the notice required by [the statute], that affidavit of personal service was not ‘complete on its face.'”  The court also reversed the trial court’s reliance on the incomplete affidavits to conclude that there was proper notice, emphasizing that “law is clear that ‘no owner occupied property may be sold’ unless the owner has received personal service of notice.”

TX May End Takings By Private Entities For Toll Roads

Posted in Eminent Domain

Texas lawmakers may eliminate a private North Texas company’s ability to use eminent domain to build toll roads.  State Rep. Cindy Burkett, R-Garland, introduced a bill in response Texas Turnpike Corp.’s plans for a rural toll road from Garland to Greenville. The company is believed to be the only private entity in the state that an old law still allows to use eminent domain for projects.

Appraisal Institute and Appraisal Foundation Spat Continues

Posted in Appraisers

The Institute has been harshly critical of the Appraisal Foundation.  Most recently, the Appraisal Institute, in a Dec. 12 comment letter, reiterated its concern to the Appraisal Foundation’s Appraisal Practices Board regarding an exposure draft that the Institute alleges contains numerous errors.  It alleges that it could damage the appraisal process and impose additional burdens on appraisers.  AI noted in its letter that the APB has no statutory authority and is strongly opposed to the Appraisal Foundation encouraging regulators to consider utilizing information in the materials for enforcement purposes.   It ends the letter by stating, “As you know, the Appraisal Institute has many objections to the existence of the Appraisal Practices Board and its functions. Should The Appraisal Foundation continue with this effort we certainly hope that it will ensure, at a minimum, that appraisers receive accurate, proper and competent guidance.”

It is truly amazing that these two important bodies can’t get along.

NC Bill Seeks To Limit Eminent Domain Powers

Posted in Eminent Domain

One of the first bills introduced in the newly convened North Carolina State Legislature seeks to limit condemnation powers.  House Bill 3, seeks to amend the North Carolina State Constitution to ban the use of eminent domain for private use.  Specifically, House Bill 3 seeks to amend N.C.G.S. 40A-3 to limit takings by “private condemnors” to those for “public use” only, a change from the current “private condemnor” power to take for “public use or benefit”.  However, it also adds takings by “private condemnors” for the construction of “facilities related to the distribution of natural gas” to the list of permitted takings. 

NC is one of the few states that did not pass legislation in the wake of the 2005 US Supreme Court Kelo case.  That case held that a condemnation for economic development satisfied the US constitutional “public purpose” requirement even if a private entity would ultimately own the condemned property.  The Kelo Court stated, however, that it was only ruling on the constitutionality of the taking and that federal and state legislatures could limit the powers if they felt it was necessary.  If passed, the NC bill would appear to prevent that type of taking. 

GA: Appraiser Owes No Duty of Care to Borrower for Appraisal Prepared for Lender

Posted in Appraisers, Valuation

One issue that continues to be litigated around the country is the extent to which an appraiser is liable to a borrower for a negligent appraisal prepared for a lender.  This issue was recently addressed by the Georgia Court of Appeals. 

In Adams v. DeWitt, 2014 WL 2609974, a purchaser of a property allegedly relied upon an appraisal in deciding to purchase the property.  However, the appraisal expressly stated that the appraisal was intended solely for the use of the lender.  This is generally standard language in appraisals for lenders.  The Court of Appeals held that the appraiser owed no duty of care to the borrower and that it was proper for the appraisal to contain limitations such as those contained in the appraisal.

The law on this subject varies by state and should be consulted if this is an issue.