Eminent Domain Blog : Pennsylvania Eminent Domain Lawyer & Attorney : Fox Rothschild Law Firm : Condemnation, Real Estate Valuation : Philadelphia, Bucks County, Pennsylvania

The Federal Housing Finance Agency issued a notice seeking to address "misinformation" regarding the Home Valuation Code of Conduct. The notice, titled "Strengthening Appraiser Independence and Improving the Valuation Process," was issued July 22, 2009. According to the Notice, the Code, adopted in December 2008, "expanded on existing [Fannie Mae and Freddie Mac] appraisal standards, seeking to redress problems that contributed to the current mortgage crisis and to improve the quality of the mortgage loans they purchase. . . . The HVCC is designed to promote professional appraisals free from inappropriate pressure from lenders, borrowers or brokers."

To address the "misinformation", the Notice provides, among other things,:

"Contrary to some suggestions, the Code provides for communications with appraisers about errors, additional needed information and unprofessional conduct. . . . The real bar is on communications that seek to influence the appraiser to adopt a set valuation, which is prohibited."

"Contrary to some suggestions, the Code does not lead to lower appraisals for property. The Code insulates appraisers from pressures that led to higher or lower appraisals and should now lead to more accurate valuations."

"Contrary to some suggestion, the Code does not favor the use of [Appraisal Management Companies] over independent or in-house appraisers.

"The use of unqualified in-state or out-of-state appraisers, unfamiliar with local conditions, should be reported to state appraiser licensing agencies."

"Contrary to some suggestions, appraisals are transferable between lenders under the Code."
 

• Email This
• Print
• Comments
• Trackbacks

The Battle over the taking of property for, among other things, an NBA arena and 16 office and residential towers in Brooklyn has moved to New York’s highest Court. The New York Court of Appeals decided to hear the challenge by property owners and tenants to the taking of their property. The parties are submitting briefs and the case - Goldstein et al. v. N.Y. State Urban Development Corporation - will be argued in Albany on October 14.

The properties are needed to construct the “Atlantic Yards Project” consisting of the Barclays Center Arena and 16 skyscrapers. The condemnees challenging the taking claim the use of eminent domain for Atlantic Yards violates the New York State Constitution.
 

• Email This
• Print

The Appraisal Foundation – a nonprofit organization that establishes standards for appraisers – has announced that it is establishing a “Consistent Enforcement Task Force.” The Foundation stated, that “[w]ith 55 different state real property appraiser regulatory bodies enforcing USPAP, there is a wide range of disciplinary actions taking place. While uniformity may be an unrealistic goal, there is a need for greater consistency in enforcement. One objective is the development of recommended disciplinary guidelines.”

The Task Force will provide a set of recommended disciplinary guidelines. The Task Force is composed of Trustees, current and former state appraiser regulators and an Appraisal
Subcommittee representative.
 

• Email This
• Print

The Pennsylvania Supreme Court declined hearing a case that could have directly addressed “Kelo” issues. In In Re: Condemnation by the Redevelopment Authority of Lawrence County, properties were condemned pursuant to Pennsylvania’s Urban Redevelopment Law (“URL”). A precondition to condemning the properties under the URL was a determination that the properties or the area in which the properties were located were “blighted.” The URL has a very broad definition of “blight” and, in this case, the Lawrence County Planning Commission determined that the condemned properties were in a blighted area under the URL because they were “maintained in economically undesirable uses.”

An en banc panel of Pennsylvania’s Commonwealth Court – the Pennsylvania intermediary appellate court that hears eminent domain cases – sustained the property owners’ challenges to the takings. It stated that “[t]he critical issue before us is whether the URL, in specifying
‘economically undesirable use’ among the criteria listed in Section 2 that render an area blighted, opens the door to a condemnation for purely ‘economic development.’” The Commonwealth Court noted that the US Supreme Court in “Kelo v. City of New London . . . upheld a condemnation of residential buildings that were clearly not blighted in the sense of dilapidated but were located in a certified redevelopment area targeted for revitalization pursuant to a carefully considered plan, which included razing the residences to build a pharmaceutical research facility.” However, the Commonwealth Court continued, the relevant state in Kelo – Connecticut – had a statute that permitted condemnations for purely economic development regardless of blight issues.

Pennsylvania, however, does not have a statute that permits condemnation for purely economic development. However, the URL does use the phrase “economically undesirable land uses” in its blight definition. The Commonwealth Court held that this phrase “does not mean property that is merely put to a use other than the most economically profitable. Such an understanding of the term fails to focus the inquiry on the actual condition of the properties labeled as ‘blighted’ and instead improperly focuses the inquiry on a comparison of the present use with the proposed redevelopment use.”

Therefore, the Commonwealth Court held that the taking was improper and sustained the property owners’ challenges. The property owners attempted to appeal to the PA Supreme Court which is not an automatic right and is at the discretion of the Court. The PA Supreme Court declined to hear the appeal and, therefore, declined an opportunity to address Kelo type issues.

We should be careful, however, not to read too much into this. The case was specific to the URL. In addition, the Eminent Domain Code was amended in September, 2006 – after the takings in this case. The amended Code added additional restrictions to condemnations under the URL which would have made it highly unlikely that the condemnor would have even attempted to take the properties let alone survive a challenge.
 

• Email This
• Print
• Comments
• Trackbacks