The California Court of Appeal, Third Appellate District certified for publication its recent decision in Tindell v. Murphy. In that case, mortgage borrowers sued an appraiser saying they relied on his appraisal to purchase their home. The trial court had dismissed the suit because the borrowers were not intended users of the appraisal since the appraisal was prepared for the lender, and the Court of Appeal upheld that decision. A discussion of that case can be found at http://www.appraiserlawblog.com/2018/05/newly-published-california-case-helpful.html
The Appraisal Institute reported that 21 pieces of legislation affecting the valuation profession are pending in 14 states. A list can be found at https://www.appraisalinstitute.org/advocacy/washington-report/washington-report-state-news-current-issue/#15
The House Financial Services Committee recently passed legislation exempting appraisers from having to conduct evaluations in accordance with the Uniform Standards of Professional Appraisal Practice for loans under $250,000 that were held in a portfolio for three years. Appraisals are not required for loans of $250,000 or less, but federal bank regulatory policy requires lenders to obtain an evaluation to understand the collateral risk involved with the loan. HR 3221 is intended to create greater flexibility for lenders.
The PA Commonwealth Court recently held that a claim of adverse possession could be brought against a municipality when the municipality’s only use of the property during the statutory period was to hold the property for possible future sale. In City of Philadelphia v. Galdo, the City of Philadelphia obtained title to a property by condemnation in 1974. The City has not physically occupied or provided any maintenance of the Property since the late 1970s. The City filed a complaint against Galdo – the current owner of the property – for continuing trespass, permanent trespass, and ejectment, and Galdo filed a counterclaim to quiet title, claiming ownership by adverse possession.
The trial court found in favor of the City and ordered Galdo ejected from the disputed property. The trial court further determined that Galdo could not sustain a claim for adverse possession against the City because the Property was devoted to public use.
The Commonwealth Court, in a 2-1 decision, reversed the trial court finding that Galdo could bring a claim for adverse possession. The Court explained:
The City does not provide any analogous obligation imposed by law or evidence of any public use of the Property to justify holding and neglecting it for decades. Furthermore, were we to determine that a municipality that condemns and holds previously private property for possible future sale did so for a public use, we would essentially hold that municipalities could institute a taking of private property for a land bank, keeping the property until the market provides a considerable profit upon its sale. Such a holding would be detrimental to private property rights. The City is not, therefore, immune from Galdo’s counterclaim for adverse possession because it did not hold the Property pursuant to a legal obligation, or for public use.
The US Supreme Court issued its Kelo eminent domain case in 2005. That case held that it is not necessarily unconstitutional to take private property for another private entity to use. Now the subject of that case is the subject of a new movie. In Little Pink House, the movie centers on Suzette Kelo – the first named plaintiff in the case and describes her fight to save her house from eminent domain. David Crosby also added music to the movie.
The North Carolina Supreme Court has held that real estate brokers may legally testify regarding the fair market value of real property in condemnation cases. In NCDOT v. Mission Battleground Leasco, LLC, the condemnee attempted to offer the testimony of a licensed real estate broker as to the property’s fair market value . The NCDOT argued against allowing the broker’s testimony based upon state law that says licensed real estate brokers are only allowed to provide opinions of the “probable selling or leasing price” of real property. NCDOT argued that a state-certified appraiser is the only party legally allowed to estimate the fair market value of real property.
The trial court agreed with the NCDOT and excluded the broker’s testimony. The Court of Appeals unanimously affirmed the trial court’s decision. On appeal, the NC Supreme Court stated that the authority allowing experts to testify is found in the state’s Rules of Evidence, and not in a statute such as the one that allows licensed real estate brokers to offer broker price opinions and comparative market analyses. The court also stated, “Any person who can qualify as an expert under that standard . . . , can testify without having to invoke any other source of authority. Meeting that standard is both necessary and sufficient.”
I tried a case in York County, PA involving a condemnation of the former York County Prison. My clients purchased the property in the ‘80s and were waiting for the right time to develop the property when it was taken by the City of York RDA.
The RDA claimed it was worth about $65,000. We presented evidence that the property was worth $1,250,000.
After less than ½ hour, the Jury returned a verdict of $1,250,000 – the full amount we alleged.
Unfortunately, the RDA chose to appeal the verdict to the Commonwealth Court. The Court affirmed that verdict. Once again, it was very gratifying to see that the Judge and Jury agreed with our evidence and we hope the RDA will now pay what our clients rightfully deserve.
A New Jersey appellate Court on Monday upheld a $4.4 million valuation of a parking lot condemned by the city of Hoboken. In Ponte Equities Inc. et al. v. City of Hoboken, the property owners sought additional damages claiming that the city lowered the market value of the 1-acre lot before taking it for a park. They argued that the valuation date should have been earlier due to these alleged actions. The court rejected the argument and held that there was insufficient evidence that the city “directly, unequivocally and immediately stimulate[d] an upward or downward fluctuation in value and which is directly attributable to a future condemnation,” the opinion stated.
The U.S. Supreme Court has decided not to hear the appeal of the owner of a Florida Keys island who alleged that increasingly restrictive development regulations have harmed his property rights. The property owner argued that the zoning of the 9-acre Bamboo Key as a bird rookery constituted a taking. Florida’s lower court ruled that the city of Marathon’s payment of rate of growth ordinance points, which can be used toward the purchase of one of a limited number of development permits, was just compensation for the property. The property owner argued that the compensation received was a nonmonetary credit that was virtually useless.
The U.S. Supreme Court denied a petition to hear a developer’s case against the Florida Department of Environmental Protection over a permit denial for a beachfront parcel. The case relates to a DEP denial of a final permit for a project to build 17 luxury townhouse units on an oceanfront site. After the DEP’s decision, the developer lost the property through foreclosure, and a principal at the firm ended up with a roughly $10 million personal judgment, which prompted the firm to sue the DEP and claim the denial was a regulatory taking. The company won at the trial court level, but the Fourth District Court of Appeal last year held the case was in part “unripe” because the developer could have considered an alternative development plan. The Florida Supreme Court declined to revive the decision in March.