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The Forensic Scrapbook will periodically post interesting items pertaining to real estate practices, forensic appraisal investigations, court cases and quasi-judicial hearings of general interest, in particular, the exposure of real estate appraisers, analysts and consultants who advocate junk science, while enjoying immunity as "so-called" expert witnesses. Those readers wishing to participate in this forum are invited to email a summary of their experiences and encounters to info@intval.com

 

Appraising The Other Parcel - Not to be Confused With The Larger Parcel

Bait and Switch - Highest and Best Use

The AACI Puppet Appraiser - Highest and Best Use

 

Appraising The Other Parcel - Not to be Confused With The Larger Parcel

 

When the appraiser couldn't find comparable sales for the taking of an easement strip measuring 30' by 4,600' (3.2 acres) across a 272-acre farm, he ingeniously substituted another parcel for the taking, which he then appraised at an amount which formed the basis of the compensation awarded.

 

[The appraiser's] analysis was not designed to find the market value of the easement actually condemned; it was designed to find the market value of a piece of land the Authority did not take: a 3.2 acre rectangular tract with frontage on Highway 123 and direct utilities access. The comparable sales method fails when the comparison is made to sales that are not, in fact, comparable to the land condemned.The two sales [the appraiser] used as comparables may have had characteristics similar to his hypothetical tract, but they were not comparable to the easement actually taken.The easement condemned ran through undivided grazing land 3,900 feet from the highway and utilities access; the sales [the appraiser] used were commercial and subdivided residential tracts with road frontage and utilities directly on site. These sales were not comparable to the condemned easement as a matter of law.

 

This case had to go all the way to the Supreme Court of Texas, where the award was overturned on the realization that the landowner had been compensated for a hypothetical property that had not been taken. Guadalupe-Blanco River Authority v. Kraft, No. 01-0150 (Tex. 2002).

 

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Bait and Switch - Highest and Best Use

 

What's that stuff called that baffles brains? An appraiser valuing an undevelopable 28-acre narrow strip taking of 5,200 feet along the western boundary of a 346-acre unserviced parcel as part of a future highway went to great lengths in discussing highest and best use. He concluded that the highest and best use of the 346-acre parcel before the taking was as "a short term holding for fully serviced, mixed use development". Obviously, this appraiser is a true believer of spontaneous development and absorption.

 

Without providing any indication of highest and best use for the land actually taken, and no before and after valuation undertaken, the appraiser was not deterred in his pursuit of valuing the taking directly. He took primarily small economically viable, in-fill, stand-alone comparable sales, and then concocted numerous adjustments in comparing the transactions to the 28-acre taking, which could not stand-alone as a marketable entity, and for which there was no independent highest and best use. The 28-acre taking was erroneously treated as the Larger Parcel (which would eliminate any claim for injurious affection or severance damage), yet the appraiser proceeded to enhance the landowner's claim for compensation by introducing a number of nonsensical claims to the remaining 318 acres for injurious affection or severance damages involving the mythical subdivision of the lands and their subsequent development with houses over a period spanning 22 years after the effective date of the taking.

 

One of the claims for injurious affection or severance damage involved houses built on the remaining lands some 17 years after the taking with a hypothetical reduction in value illustrated by way of a proximity study. The appraiser compared the houses abutting the highway, which formed the land taken, with houses built on an interior street to illustrate the difference in value due to the highway. Although this exercise was irrelevant, a proper proximity study, had one been warranted, would have compared a raw tract adjacent to a major arterial road which the lands abutted before the taking to a major highway which the lands abutted after the taking. This case was settled before the appraiser had an opportunity to mesmerize the Board with his "junk science".

 

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The AACI Puppet Appraiser - Highest and Best Use

 

Thank God I don't get paid to think! Another appraiser representing the same party as in the preceding expropriation did what he was told to do by his legal counsel. Of course, the appraiser made full disclosure in his appraisal report of his accommodating, obedient, faithful and loyal observance acknowledging that he had been

 

"requested [by legal counsel] to prepare a draft appraisal report estimating the loss in market value and injurious affection, if any, caused to the owner's remaining lands, due to a partial expropriation by the...[expropriating authority]" and "to assume a land use potential the same as that set out in a[n].appraisal report.prepared by [the expropriating authority's appraiser]" that "the Highest and Best use of the site would be a development in accordance with the Official Plan, and the proposed plan of subdivision... the density factor ... we have utilized (is) 10.5 units per acre...2 acres is...the balance (is) low density residential, (with) 0.095 acres is subject to an easement for sewers, with draft plan approval assumed in one to two years from the effective date...of appraisal)".

 

I suspect the reason that the appraiser submitted his report in "draft" form, prior to issuing a final report was to ensure that he had complied with his marching orders and to have had his report blessed by his legal counsel. Too bad the case was settled prior to the appraiser testifying, as the Board's response to this appraisal would have been illuminating. Perhaps, opposing counsel and the Board may have cross-examined the lawyer rather than the appraiser. What does AACI stand for?

 

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