Easement Appraisals

Easement appraisals consider the market value of air rights, surface rights, conservation rights and or subsurface rights in real property.  They are completed to form opinions of the value of utility easements, roadway easements and specialty easements like air rights that span a highway or air rights that rise above a building.  While there are theories regarding how each of these rights, being part of the "bundle of rights," should be considered and valued, there are no hard and fast appraisal rules.  Each appraiser must consider the specific appraisal problem and decide for themselves.

Many easement appraisals are completed for the government, for a utility company or for a private owner who is having a portion of their land taken for a public project.  Easement appraisals are often controvertial and disputed by owners who believe that an easement brings many negatives to a "pristine" property.  So your client may be a government entity or an owner but it is important to realize that if there is a dispute over value your report may end up being pulled into a litigation dispute.

Since the appraisal that you complete may end up in court you want to make sure that you use the appropriate market value definition.  If the appraisal is completed due to a potential government acquisition the definition that you use may appopriately be the one stated in your state statute related to Eminent Domain.

Since most roadway easements are narrow they affect only a portion of a property.  Easements often allow for the use of a property for other purposes so they may not require the taking of a 100% interests in a real property.  As an appraiser you need to know if the Client simply wants the easement valued or if (more likely) they are interested in values both "before" and "after" the taking of the easement.  If an easement taking is from a private party there is a good chance that everyone will want to know not only what the value of the easement was "before" the easement was taken but also the value of the remainder "after" the taking.

The market value of the easement itself should not be different for the party taking the property or the party having it taken, the definition doesn't change based on who you are doing the report for.  If you are working for one side or the other keep in mind that since appraisals of this type are often used as negotiating tools there will sometimes be pressure applied to the appraiser to bias a report one way or the other.  If you understand that this pressure may arise and you are prepared for that possibility you will be better prepared to thwart it.

There are a number of other considerations that must be made regarding easement appraisals, and I would suggest that you take a look at some of the work that has been completed by your contemporaries (or should I say competitors).  Their appraisal reports can often be had by requesting copies from governmental agencies who typically order reports of this type, like the Highway Department or the County Roadway Department in your locality.  Ask for copies and offer to pay for copies.  If you can't get them to release copies you can request them through a freedom on information act request.

For more appraisal information contact Glenn Rigdon, MA,MRICS, ASA a Las Vegas / Henderson Nevada commercial appraiser via email or via his business website Horizon Village Appraisal (http://www.horizonvillageappraisal.com), or you can also click on “Contact Us” on the home page of this website.

Article source: http://www.appraisalarticles.com/Real-Property-Appraisal/3020-Easement-Appraisals.html