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

The New Jersey General Assembly overwhelmingly passed a bill intending to “clarify” the use of eminent domain by a municipality and amending the due process provisions of the Local Redevelopment and Housing Law (LRHL) that fall within the area of eminent domain, according to the bill’s sponsors. Under the bill, A-3615, a municipality condemn properties if an area is determined to be in need of redevelopment and after the municipality follows established criteria in making such a determination. The bill provides notification requirements and rights of property owners if a town determines an area to be a focus of redevelopment and authorizes the taking of property by condemnation. The new provisions require property owners within such an area to be advised of the municipality’s intention of whether it will use or not use eminent domain at the outset. Unless a municipality properly notifies owners, the LRHL will not authorize the use of eminent domain.

The General Assembly passed the bill 78-0 with 2 members abstaining. The bill now will be reviewed by the NJ Senate.
 

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The Georgia Real Estate Appraisers Board recently adopted its final regulations regarding standards for developing and reporting an “evaluation appraisal.” The regulations state that, where permitted by federal law and policies, a state-licensed or certified appraiser performing an evaluation appraisal need not comply with the Uniform Standards of Professional Appraisal Practice.

The new regulations state that a licensed or certified appraiser may offer “an appraisal which is limited in its scope and development” where an appraisal by a licensed or certified appraiser is not required by federal law. These situations include transactions with a value less than or equal to $250,000, transactions where there is no advancement of new money other than funds necessary to cover reasonable closing costs and transactions with business loans with a value equal to or less than $1 million in which rental income from the property is not the primary source of repayment.

The regulations contain a list of approximately 20 items that a certified appraiser must include in each evaluation appraisal.

Also significant: the regulations state that the evaluation must contain “an estimate of the property’s market value” and that “a valuation that does not provide a property’s market value or sufficient information and analysis to support the value conclusion is not acceptable as an evaluation appraisal. While a broker price opinion, a competitive market analysis, an automated valuation model and a tax assessment value may be useful in developing an evaluation appraisal, the information obtained from these methods of valuation is insufficient standing alone to meet all of the criteria necessary to be an evaluation appraisal.”
 

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Forty-two U.S. appraisal firms announced March 18 that they now are operating as Valbridge Property Advisors. The new firm is comprised of independent, local-market valuation firms with each office run by the local practice leader who must hold an MAI designation of the Appraisal Institute.

The new firm will specialize in office, industrial, retail, multifamily, hospitality, recreation and other special-purpose property types, and the MAI designation is held by appraisers who are experienced in the valuation and evaluation of these types of properties, as well as by those who advise clients on real estate investment decisions.

The firm is shareholder-owned with a board of directors and officers, including Richard L. Armalavage, MAI, serving as president and chief executive officer. It is headquartered in Naples, Fla. “Client demand for a strong independent national commercial property appraisal services platform has driven the formation of Valbridge,” Armalavage said in a news release. “Valbridge will be able to maximize opportunities for clients by elevating industry standards for accuracy, integrity, reporting and technology in service to current and future clients.”
 

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Legislation was introduced in the Pennsylvania General Assembly to expand the ability of real estate sales professionals to provide Broker Price Opinions and Comparative Market Analyses outside of the real estate brokerage context. This legislation would amend the Real Estate Licensing and Registration Act and the Real Estate Appraisers Certification Act.

A Comparative Market Analysis or Broker Price Opinion is developed by a licensed real estate broker, associate broker, or salesperson and provides an estimate of the probable selling price or leasing price of a particular parcel of property. Currently, a Pennsylvania licensed real estate broker or salesperson is permitted to perform a CMA in the real estate brokerage context for “the purpose of determining the asking/offering price for the property by a specific actual or potential consumer or for the purpose of securing a listing agreement with a seller.” Brokers and salespersons are currently prohibited from doing CMAs outside the brokerage context because a value or price opinion provided for a fee is defined in PA law as an “appraisal” and requires an appropriate appraisal license or certification to be held by the individual performing that work

The legislation – SB 869 – was introduced in the Pennsylvania Senate on April 18, 2013. It is sponsored by Sen. Robert M. Tomlinson and has 16 co-sponsors. Senator Tomlinson is the Chair of the Senate Consumer Protection and Professional Licensure Committee.
 

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One of the communities hardest hit by Hurricane Sandy is preparing to use eminent domain to take easements from oceanfront homeowners who are holding up a beach replenishment project, according to the Newark Star-Ledger. These homeowners won't sign easements that would allow federal officials to carry out the work. Mantoloking saw every one of its 521 homes damaged. The Mayor stated the town has no choice if it wants to survive. He said Mantoloking has either signed easements or has verbal commitments from 121 of 128 oceanfront homeowners.

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The Bipartisan Policy Center issued a report proposing changes to current appraisal policy. Although it was primarily focused on reducing the government’s role in the nation’s housing finance system, it had appraisal related recommendations. For example, it recommended banning the use of distressed home sales as comparables which the BPC said was helping to decrease local home values and buyers’ ability to secure financing.

The BPC Housing Commission is led by former U.S. Sens. George Mitchell, Mel Martinez and Kit Bond and former U.S. Housing and Urban Development Secretary Henry Cisneros. The report titled “Housing America’s Future: New Directions for National Policy,” can be found bipartisanpolicy.org/sites/default/files/BPC_Housing%20Report_web.pdf
 

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The Appraiser Qualification Board issued the Second Exposure Draft of Proposed Interpretation and Revision to the Real Property Appraiser Qualification Criteria. The AQB is an independent board of The Appraisal Foundation and composed of at least five practicing appraisers who are appointed by the Foundation’s Board of Trustees for three-year terms. Under the provisions of Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), the AQB establishes the minimum education, experience and examination requirements for real property appraisers to obtain a state certification. In addition, the AQB performs a number of ancillary duties related to real property and personal property appraiser qualifications.

“In 2006, the AQB issued an Interpretation to the Criteria, addressing continuing education for appraisers returning from active military duty. Based on recent events such as Hurricane Sandy, the AQB has recognized that appraisers impacted by a state- or federally-declared disaster may be similarly situated,” the board wrote. “Therefore, the AQB is exposing a revision to the previously adopted Interpretation (that will apply to the current, or 2008 Criteria), as well as a revision to the already adopted Criteria (that becomes effective on Jan. 1, 2015).”

The changes can be found at The Appraisal Foundation’s website appraisalfoundation.sharefile.com/d/s5763fd573e94aafa.
 

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The North Carolina House of Representatives has passed legislation to amend the state Constitution to limit certain eminent domain powers. House Bill 8 would specifically prohibit condemnation of private property except for a public use and provides for the payment of just compensation with right of trial by jury in all condemnation cases. The N.C. House passed the Bill 110-8.

The Bill – an obvious continued reaction to the U.S. Supreme Court decision in Kelo v. New London, Conn. (2005) – would put the constitutional amendment on the General Election ballot in November 2014. It does not appear to change the law other than to specifically include it in that state’s constitution.
 

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I am often asked whether governmental actions can cause a taking even if the government does not formally initiate an eminent domain case. These cases are known as "de facto" or "inverse condemnations" and are difficult to prove. However, establishing a de facto taking can have substantial benefits.

 

The Commonwealth Court recently affirmed a trial court’s ruling finding that we proved a de facto taking in Philadelphia.

 

Our client was in the process of developing a property for residential condominiums. It took substantial steps including obtaining architectural and engineering designs and lining up financing. PennDOT, however, targeted the property for a road project and announced in August, 2006 that it was going to condemn the property. PennDOT did not initiate a condemnation action until May, 2009. However, we alleged that PennDOT’s action destroyed any opportunity to develop the property for its "highest and best use" – condominiums – and caused a de facto taking.

 

After a two day hearing involving testimony of four experts and numerous fact witnesses, the Judge ruled that PennDOT’s actions constituted a de facto taking by December 2006. PennDOT appealed. After briefing and oral argument, the Commonwealth Court affirmed that ruling and found that we proved a de facto taking.

 

This has a significant impact on the case. For example, the property will now be valued as of December 2006 and not May 2009. PennDOT will also be required to pay professional fees (attorneys, experts, etc.) for the entire case.

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The US House of Representatives recently passed the "Private Property Rights Protection Act of 2012." The Act prohibits the federal government and states and municipalities from exercising its power of eminent domain over property to be used for economic development if the state or municipality receives federal economic development funds during any fiscal year in which the property is so used or intended to be used. "Economic development" is defined as the taking of private property, without the consent of the owner, and conveying or leasing that property from one private person or entity to another for commercial enterprise. Any state or municipality violating this Act would render it ineligible for any federal economic development funds for two years.

The bill is now pending in the Senate. Many states, including Pennsylvania, passed similar statues in the wake of the US Supreme Court Kelo case.

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In Shelp v. City of Scranton, a Pennsylvania trial court ruled that, in some cases, property sellers and brokers may be required to disclose the fact that a property was previously condemned to potential buyers. In that case, the defendant sold property to the plaintiff that had been previously condemned. The defendant had acquired the property from the City of Scranton after it was condemned by the City. The defendant did not disclose the prior condemnation to the plaintiff. The City later evicted the plaintiff at which point the plaintiff was informed that the property was condemned.

The plaintiff alleged that seller and real estate broker should have disclosed the prior condemnation. The facts are somewhat unclear, but it appears that the plaintiff was evicted by the City due to the unsafe condition of the property. The seller and the real estate broker filed a motion – known as preliminary objections – alleging that, as a matter of law, there was no duty to disclose the prior condemnation.

The Court denied the motion as to the seller and broker and ruled that the case could proceed. It found, for example, that the plaintiff relied upon the seller and broker’s representation that the property was fit for residential habitation and ultimately it was not fit. The defendants will now have the opportunity, as the case proceeds, to contest the factual arguments so this case is far from over.
 

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US Airways and the City of Philadelphia issued a joint statement in which they state they are working out their differences regarding the Philadelphia Airport expansion project. US Airways has objected to the costs it would bear for the expansion. The City has threatened to impose new airport-use rates if US Airways did not agree to a new 15-year airport lease by July. The joint statement said recent talks between the two sides had been "very productive" and that "our paramount objective [is] to conclude an agreement on a long-term airport lease …."

The city estimates the airport expansion project would cost $6.4 billion over 13 years. US Airways and other airlines at the airport estimate the cost at about $10.5 billion. The proposed expansion would, among other things, add a fifth runway to the airport, shift the UPS airfreight operations hub to the western side of the airport, lengthen two existing runways and build a new commuter terminal.

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I am often asked whether governmental actions can cause a taking even if the government does not formally initiate an eminent domain case. These cases are known as “de facto” or inverse condemnations and are difficult to prove. However, establishing a de facto taking can have substantial benefits. We recently were successful in establishing a de facto taking in Philadelphia.

Our client was in the process of developing a property for residential condominiums. It took substantial steps including obtaining architectural and engineering designs and lining up financing. PennDOT, however, targeted the property for a road project and announced in August, 2006 that it was going to condemn the property. PennDOT did not initiate a condemnation action until May, 2009. However, we alleged that PennDOT’s action destroyed any opportunity to develop the property for its “highest and best use” – condominiums – and caused a de facto taking.

After a two day hearing involving testimony of four experts and numerous fact witnesses, the Judge ruled that PennDOT’s actions constituted a de facto taking by December 2006. This has a significant impact on the case. For example, the property will now be valued as of December 2006 and not May 2009. PennDOT will also be required to pay professional fees (attorneys, experts, etc.) for the entire case.

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The Pennsylvania Game Commission filed a protest with the Federal Energy Regulatory Commission objecting to Central New York Oil and Gas Co. LLC’s attempt take over land the commission manages. PGC stated, "If FERC allows [Central New York Oil and Gas Co.] to file eminent domain proceedings against the Commonwealth of Pennsylvania, it will bring into contention the implicit federal preemption of state's regulatory authority. The inequitable burden placed on Pennsylvania's wildlife resources is in stark contrast to a project that neither increases the capacity of the downstream gas delivery system, nor increases the supply of gas feeding into the gas supply system, but at best only allocates the direction gas will flow for the private pecuniary benefit of some at the expense of efficiency and economy for all."

The PGC said its interests in maintaining control over state game lands in Bradford County, Pa., outweigh the interests of CNYOG in forcing an eminent domain action. This issue will undoubtedly continue be hotly contested.
 

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One of the largest and most controversial projects being discussed in Southeastern Pennsylvania is the expansion of the Philadelphia International Airport. US Airways Group Inc. is now increasing its efforts to oppose the project. As the Philadelphia Inquirer reported, “the move by US Airways, backed by other airlines, throws the massive airport project into turmoil after a decade of reviews. Philadelphia officials say they will push ahead with or without airline support - even though airlines will pay much of the bill and could cut service here.”

This project has been the subject of attacks from a variety of sources including property owners in the footprint of the proposed expansion. Now, Philadelphia's biggest airline is publicly stating that another runway would not noticeably reduce delays for passengers because congestion is caused largely by traffic in the skies. However, the city is not changing its commitment to the project. Rina Cutler, Philadelphia’s Deputy Mayor for transportation said, “We are going to move forward. We are going to do the runway."

 

This fight will likely continue and become even more intense. 

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We were recently involved in a very controversial condemnation matter. We were retained by the Ludwig’s Corner Horse Show Association to challenge a condemnation filed by West Vincent Township. The Township passed a resolution and filed a declaration of taking to condemn 33 acres owned by the Association. The Association is a true treasure in the horse community as well as the community in general. A firestorm erupted and the Township agreed to rescind the condemnation.

 

I have seen governmental entities far too often become entrenched in their actions and irrationally refuse to reconsider their decisions.  Fortunately, the Township was an exception.

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A federal appeals court recently held that a condemnee who successfully challenges a taking may be entitled to “just compensation” during the period between the filing of the declaration of taking and the revesting of title. In R&J Holding Company v. Montgomery County RDA, the property owner successfully challenged the taking of its property. The property owner was awarded its attorneys’ fees and expenses as mandated by Pennsylvania law in cases where there are successful condemnation challenges. That challenge took approximately five years including a review by Pennsylvania’s appellate courts.
 

The condemning authority, the Montgomery Count RDA, held title to the property throughout the state court action. The property owner filed an action in state court alleging it was deprived of certain fundamental property rights, including the right to improve the property and the right to sell the property during the pendency of the condemnation challenge. The Pennsylvania Commonwealth Court reversed rejected the claim holding that the Pennsylvania Eminent Domain limits a prevailing condemnee's recovery to professional fees and expenses. The Commonwealth Court's opinion never explicitly addressed whether denying just compensation violated the state or federal constitutions.

The property owner then filed suit in federal court seeking the “just compensation” promised by the Fifth Amendment. The RDA argued that there was no taking and that without an accompanying attempt to take physical possession of the property, transfer of title to the government does not constitute a taking. The Third Circuit rejected the argument finding that it was “a per se” taking because title to the land actually passed upon the filing of the Declaration of Taking.
The Third Circuit did not elaborate as to the nature of the “just compensation,” however. It will be interesting to monitor this case as it proceeds.
 

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The Commonwealth Court of Pennsylvania recently addressed the requirement that a condemnor must initiate the condemnation action within one year of the action authorizing the condemnation. In In Re: Condemnation by the Redevelopment Authority of the City of Allentown, the condemned property was determined to be blighted on March 8, 2004. On June 14, 2005, the Redevelopment Authority of the City of Allentown (RACA) adopted a resolution authorizing the executive director to acquire the property through eminent domain. On June 15, 2005, the Allentown City Council adopted a resolution authorizing RACA to acquire the property through eminent domain, if necessary.

The RACA waited until September 15, 2008 to file the Declaration of Taking – the filing that initiates a condemnation case in PA. Section 302(e) of the PA Eminent Domain Code, 26 Pa.C.S. § 302(e), states: “The condemnor shall file within one year of the action authorizing the declaration of taking, a declaration of taking covering all properties included in the authorization not otherwise acquired by the condemnor within this time.”

The Condemnee challenged the taking alleging that the Declaration was not filed within the required year from the date of authorization. On December 3, 2008, the RACA adopted another resolution continuing the authorization of the taking of the property. On December 11, 2008, the RACA filed an Amended Declaration of Taking. Condemnee challenged the Amended Declaration. The Court of Common Pleas of Lehigh County sustained the challenge to both the Declaration and Amended Declaration.

On appeal, the Commonwealth Court affirmed the trial court’s ruling. The RACA argued that amended declarations may be filed as of course without instituting new court actions in order to cure technical defects. The Court rejected that argument and held that the the RACA, “only had one year from the date of the resolution to file its Declaration. Clearly, it did not do so. There is nothing in [The Code] giving RACA authority to extend the one year time period by adopting another resolution ‘continuing’ the authority to condemn.”
 

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PennDOT has shown signs that it is pursuing property acquisitions for Route 422 projects in Berks and Montgomery Counties (PA). PennDOT published a notice on September 3, 2011 in The Pottstown Mercury newspaper that it intends to acquire property in Lower Pottsgrove (PA) Township for that portion of its 422 reconstruction project. Property owners are also receiving notices of potential acquisition for various other 422 projects.

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The Pennsylvania Luzerne County Court of Common Pleas recently upheld a condemnation of property for a “charter school.” In Bear Creek Township v. Riebel, decided June 2, 1011, Bear Creek Township condemned property that would ultimately be used for a “Pennsylvania Public Charter School.” The property owners alleged, among other things, that the taking violated the Pennsylvania Eminent Domain Code’s prohibition against condemning properties for “private enterprise.” That prohibition is found in Chapter 2 of the Code and was enacted in 2006 in response to the United States Supreme Court’s Kelo decision.

Although the challenge was based on Chapter 2 of the Code, the Court virtually ignored those provisions in its analysis. Instead, the Court applied cases prior to the enactment of Chapter 2 which analyzed the “public use” – also referenced as the “public purpose” – requirement of the Pennsylvania and United States Constitutions.

The Court ruled, “After careful review, this Court finds ample evidence by way of law, testimony and documentary exhibits, that the proposed Recreation/Charter School Project does primarily benefit the public and is for a public purpose.”

The property owners have appealed to the Commonwealth Court. It will be very interesting to watch this appeal to see how the Commonwealth Court will address the Code’s prohibition against condemning properties for “private enterprise.”
 

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Congress is considering a bill that would prohibit a state or local government from exercising its power of eminent domain over property to be used for economic development or over property that is used for economic development within seven years after that exercise. The bill would establish a private cause of action for any private property owner or tenant who suffers injury as a result of a violation of this Act. The bill would also prohibit a state or local government from exercising its power of eminent domain over property of a religious or other nonprofit organization because of the organization's nonprofit or tax-exempt status or any related quality.
The bill is currently pending in the House Judiciary Committee’s Constitution Subcommittee.
 

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We represent the former owners of property in Delaware County, Pennsylvania. A Township condemned the property and claimed that the property was worth only $1.26 Million.

A Board of View Hearing was held which lasted four days. Both sides presented fact and expert witnesses including appraisers and zoning experts. Our appraiser testified the fair market value of the property was $6 Million.

Last week the Board of View issued its decision. They awarded the entire $6 Million to our clients. The Report of the Board stated that the decision was made “after a full and impartial consideration of all the testimony submitted to them; after careful review of the subject property as appropriated by the Township of Haverford, and acting in accordance to their best judgment”.

Articles regarding this case can be found at:

www.mainlinemedianews.com/articles/2011/03/16/main_line_times/news/doc4d80a2c59454d334142055.txt

 

http://www.philly.com/philly/news/20110317_Value_of_plot_Haverford_bought_is_disputed.htm

delcotimes.com/articles/2011/03/20/opinion/doc4d856d7b240cb460653052.txt

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A Pennsylvania condemnee has two procedural mechanisms to assert a de facto taking. Which mechanism is appropriate depends upon whether a declaration of taking has been filed. A condemnee may file a petition for appointment of board of view before a declaration of taking is filed or file preliminary objections after a declaration of taking is filed. The Commonwealth Court recently reaffirmed that preliminary objections are the exclusive method to allege a de facto condemnation after a declaration of taking is filed.

In Lang v. Dep't of Transportation, (Pa. Commw. Feb. 18, 2011), PennDOT filed a declaration of taking and the condemnee did not file any preliminary objections. The condemnee later filed a petition for viewers as a separate action alleging a de facto taking. PennDOT filed preliminary objections to the petition alleging that the condemnee waived his right to claim a de facto taking by not filing preliminary objections to the declaration of taking.

The trial court and the Commonwealth Court both held that the failure to file preliminary objections after a declaration of taking is filed precludes the condemnee’s ability to assert a de facto taking in any action.
 

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A Lehigh County Trial Court recently held that an eminent domain action was void ab initio where the condemning authority did not file a declaration of taking within one year of the authorization of taking. In In re Condemnation by the Redev. Auth. of the City of Allentown, (C.P. Lehigh Jan. 13, 2011), the Allentown City Council adopted a resolution authorizing the Redevelopment Authority to acquire a property through eminent domain in 2005. However, the declaration of taking was not filed until Sept. 15, 2008.

The PA Eminent Domain Code was amended effective Sept. 1, 2006 – after the authorization was adopted and before the filing of the declaration of taking. One of the amendments provided that "the condemnor shall file within one year of the action authorizing the declaration of taking a declaration of taking...." The Court sustained the condemnee’s objections to the taking on the basis that the declaration of taking was filed over one year after the authorization. It reasoned that the time limit for filing a declaration of taking is analogous to a statute of limitations. "A statute of limitations is procedural; statutes relating to procedural matters, such as statutes of limitation, are applicable to cases filed after the effective date of the statute."
 

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Congressman Patrick Meehan (D-PA) recently questioned Federal Aviation Administrator Randy Babbitt regarding the Philadelphia International Airport Expansion Project. The questioning was part of a Transportation and Infrastructure subcommittee on Aviation hearing. Part of the questioning related to whether the FAA intended to condemn properties outside of Philadelphia for the project.

Congressman stated in a press release: “I sought clarification on eminent domain powers in relation to the Philadelphia Airport expansion.” However, there was no such clarification given during the hearing as Congressman Meehan’s allotted time ran out. A video of the questioning can be found at:
 

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The Pennsylvanian House of Representatives is once again considering a bill that would increase the amount of professional fees in eminent domain cases to $25,000. The Pennsylvania Eminent Domain Code was amended in 2006 and currently provides that a property owner “shall be reimbursed in an amount not to exceed $4,000 as a payment toward reasonable expenses actually incurred for appraisal, attorney and engineering fees.” Prior to the 2006 amendment, property owners were entitled to $500 for professional fees.
The same bill was introduced during the last session in 2009 and never made it out of the State Government Committee.
This issue continues to be controversial. In 2007, the United States Government Accountability Office issued a report regarding eminent domain. In that report, the GAO stated: “Multiple property rights groups further explained that owners often are unable to fight a condemnation action if they want to retain their homes or businesses or seek additional compensation because costs related to hiring an appraiser or attorney, as well as court costs, are too high.” Of course, increasing the reimbursable amount could also increase the cost of a project.
It is unclear whether this version will fare any better than its predecessor.
 

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After over a decade of planning, a $5.2 billion expansion of Philadelphia International Airport was approved by the Federal Aviation Administration. The project will require a significant amount of land acquisition in Philadelphia and Delaware County.

Those properties in Philadelphia could be acquired through the City’s power of eminent domain. However, airport chief executive officer Mark Gale stated that “We do not have eminent-domain power in Delaware County. We will try to voluntarily have a transaction with a willing seller.” His statement presumably is based upon a 2006 amendment to the Pennsylvania Eminent Domain Code which generally prohibits "extraterritorial" condemnations – i.e., condemnations beyond a municipality’s borders.

If your property is being considered for acquisition – either through a condemnation proceeding or amicably – you should know your rights and potential for compensation. It appears that this project will be a reality and should not be ignored.
 

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In Borough of Walnutport v. Dennis, the Commonwealth Court of Pennsylvania restated Pennsylvania black letter law that any claim for damages caused by an alleged condemnation must be brought pursuant to the procedures of the Eminent Domain Code. In that case, decided December 3, 2010, a borough sued a property owner for costs associated with installing curbing on the property. The property owner sought to include in his counterclaim that the Borough interfered with access to his property which effected a taking. The Commonwealth Court restated the long standing rule in Pennsylvania that any claim for an alleged condemnation must be brought pursuant to the Eminent Domain Code.

The lesson is that if you believe that the action of a governmental entity has caused the taking of your property, you may only pursue eminent domain damages pursuant to the Eminent Domain Code.
 

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The PA Supreme Court recently ruled that the PA Private Road Act may facilitate unconstitutional takings. In In the Matter of Opening a Private Road For The Benefit of Timothy P. O’Reilly, a landlocked property owner proceeded under the Private Road Act to open a private road to connect to a public road. The Private Road Act permits the owner of a landlocked property to petition the Court of Common Pleas for the appointment of a board of viewers to evaluate the necessity of a private road to connect such property with the nearest public thoroughfare or private way leading to a public thoroughfare. Upon a finding of necessity, the board will lay out a private road to cause the least damage to private property. The Act requires the owner of the landlocked property to pay damages to persons over whose property the new road is built; the owner is then afforded exclusive use of the road.

The owners of the property where the proposed private road would be located filed preliminary objections alleging that the Private Road Act facilitates an unconstitutional taking of private property for a private purpose in violation of the Fifth Amendment to the US Constitution and similar sections of the PA Constitution. They claimed that the PRA is unconstitutional because it facilitates the transfer of property from one private property owner to another private property owner for a private use. The landlocked property owner argued, in part, that the creation of a private road under the Act is not a taking, but, instead, embodies reasonable regulation of property usage or provision of an otherwise unavailable private easement, both exercised under the Commonwealth's police power.

The trial court overruled the preliminary objections and the Commonwealth Court affirmed that decision. The PA Supreme Court vacated the Commonwealth Court’s decision and ruled that the creation of a private road is a taking. It held that “irrespective of the police-powers rubric, a physical invasion and permanent occupation of private property, such as that which would be accomplished by the creation of a private road under the Act, is a taking.” The Court also concluded that the lower courts did not perform the necessary analysis to determine if the taking was proper under the test for whether a taking is for a public use. Therefore, the Court remanded the case to perform that analysis.

It will be interesting to see how the lower courts deal with this issue. It is the first time the PA Supreme Court considered this issue and it could open the door to challenges of any taking under the PRA.

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The Pennsylvania Commonwealth Court recently ruled that PennDOT met its burden to condemn agricultural property for a project in Lebanon County. In Dept. of Transp. v. Agricultural Lands Condemnation Approval Board, PennDOT sought to condemn productive agricultural lands for a transportation use. Pursuant to the Farmland Protection Policy Act, the Agricultural Lands Condemnation Approval Board considered the PennDOT project. It found that PennDOT did not prove that there was no reasonable and prudent alternative to the alternative selected by PennDOT and denied PennDOT’s request to use its condemnation power to acquire the lands. On appeal, the Commonwealth Court reversed holding that the Board acted capriciously and ignored overwhelming evidence that there was no reasonable and prudent alternative to the condemnation of the lands.

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In a move that sent tremors throughout the appraisal community, the Appraisal Institute withdrew its sponsorship of The Appraisal Foundation on September 7. (See my September 16, 2010 entry).

The Appraisal Foundation has now posted a “Q&A” on its website regarding this important issue. That post can be found at: www.graphicmail.com/new/viewnewsletter2.aspx

According to the Appraisal Foundation,

“the Appraisal Institute once again failed to communicate with the Foundation regarding a matter directly related to our organization. In this case, without the Foundation’s knowledge or approval, the Appraisal Institute approached three other organizations with the following proposed revision to the federal law (FIRREA) which grants authority to The Appraisal Foundation:

“to maintain the independence of the Appraisal Standards and Appraiser Qualifications Boards and to avoid potential conflicts of interest, The Appraisal Foundation shall not directly or indirectly offer or sponsor any qualifying or continuing education courses for certified or licensed real estate appraisers beyond the National Uniform Standards of Professional Appraisal Practice course specifically required for licensure and certification.”

According, to the Appraisal Foundation, this was not the first time the Appraisal Institute allegedly violated similar Foundation rules.

The Foundation also stated that “under the right circumstances, there will always be a door open for the Appraisal Institute to return to The Appraisal Foundation.” However, the Foundation expressly stated, “we are always willing to talk with their representatives. We hope and believe the opportunities associated with a change in their leadership in a few months may be constructive.”

Once again, I truly hope these important organizations resolve their differences.
 

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In a move that sent tremors throughout the appraisal community, the Appraisal Institute withdrew its sponsorship of The Appraisal Foundation on September 7.

The Appraisal Institute is the most prestigious real estate organization and has more than 25,000 members and 91 chapters throughout the world. I am an affiliate member of AI (the designation for non-appraiser real estate professionals). The Appraisal Foundation was founded in 1987 by eight major appraisal organizations to help regulate the appraisal profession within the US. It is perhaps best known for its promulgation of the Uniform Standards of Professional Appraisal Practice (“USPAP”) which contains the generally accepted standards for professional appraisal practice in North America.

AI and the Appraisal Foundation have been fighting throughout this year regarding AI actions relating to proposed legislation. The Appraisal Foundation claimed that AI improperly sought to influence other Appraisal Foundation members to support legislation that may have been contrary to the Foundation’s interests. The Foundation ultimately sanctioned AI for its alleged actions.

The AI Board of Directors’ letter to the Foundation stated: “The Appraisal Institute must be able to discuss freely issues of concern to, and advance the interests of, its members, the profession and the public, which The Appraisal Foundation has made clear, is inconsistent with Foundation sponsorship. Moreover, the Foundation has decided to punish the Appraisal Institute for actions that it did not commit. That decision is grossly unfair, unacceptable, and attacks the very integrity of the Appraisal Institute.”

AI’s statement regarding its withdrawal can be found at appraisalinstitute.org/newsadvocacy/news/2010/090710_AI_WithdrawalFromTAF.aspx

It is truly sad that these two important organizations cannot work together. Hopefully, cooler heads will prevail and will close this rift.
 

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Funds for widening Route 202 on the section of the highway that runs from near Route 29 to the Exton Bypass will be delayed until at least 2011. The Delaware Valley Regional Planning Commission voted 17-1 to wait until 2011 to begin releasing the PennDOT funds needed to widen this section of the highway. PennDOT’s current plans for this section – known as “Section 300 – anticipate expanding from four to six lanes. It appears that this delay is another example of budget concerns being felt at PennDOT. PennDOT made a decision this year to focus its funding on projects involving bridge repairs.

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Our eminent domain team won a $17.25 million jury verdict for client, Peter Alecxih, in a controversial eminent domain case that has played out in York County, Pennsylvania, over the past four years. The award was $15.25 million higher than the County’s original offer when it seized the land. The award is believed to be one of the highest ever awarded in an eminent domain case in Pennsylvania.

The case involved a 79-acre tract of land known as Highpoint, which was taken in May 2004 by the County for use as a park. Working on behalf of Alecxih, the Fox team, led by Herbert Bass and his team of Fox Rothschild attorneys David Snyder, Marc Needles and Brett Berman, took the case to trial. After presenting the testimony of various witnesses who valued the property between $16 and $17.775 million, the jury returned a verdict in Alecxih’s favor of $17,250,000.

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PennDOT has re-launched its Marshalls Creek Bypass website. The Monroe County, Pennsylvania project’s website was unavailable for at least a few months. It is now up and running again at www.marshallscreekbypass.com/main.cfm. You can find information regarding PennDOT’s intended construction schedule and other topics. However, the site does not shed any new light on the third phase of construction which was temporarily put on hold in the spring. It appears that PennDOT still intends to move forward at some point with phase 3 of the project. However, it is still considering design issues. Stay tuned.

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