Section 11: Reviewing Updated ValuesAnchor: #i1001459
Occasions will arise when it becomes necessary to obtain updated appraisal reports on a property after a value has been previously approved. It may be that additional support is necessary for eminent domain testimony or an unusual length of time has elapsed since the value was originally approved, placing its validity in doubt due to depreciation of improvements or market changes. In addition, improvements may have been overlooked, added, destroyed by fire, or damaged. Right of way design changes (such as additional right of way being needed after an offer was made), as well as ownership changes due to severing the original parcel, will also necessitate an updated appraisal report. Normally, in such instances the original appraiser is requested to update the report.
When it is necessary to obtain a new or an updated appraisal report after a value has been approved; and, a new value is indicated, the new appraisal data should be reviewed in the same careful manner as the original appraisal report(s). An examination should be made to be sure that there is no conflicting information in the new appraisal(s) when compared to the original appraisal(s) and that all new opinions are properly supported. It is important that any change in value is supported with new appraisal data; otherwise, it would appear that there was only a change in an opinion of value without proper documentation.
The review appraiser should be sure that the new appraisal data was not available at the time the original report(s) were made, or have an adequate explanation from the appraiser as to why this information was not used if it was available. Appraisers sometimes make errors and should be prepared to update their values and furnish a complete analysis of the matter to support their revision(s). The appraiser must submit new pages in this case.
One of the most frequent reasons given for an updated value is an increase in value due to the lapse of time. The appraiser’s revised estimate must be due to an actual increase in value as measured by subsequent appraisal data. An increase in value due to time cannot be assumed, but must be measured and supported.
In order for the influence of the proposed facility/highway project not be reflected in the updated value, comparable sales that have not been affected by the proposed facility should be given the greatest weight. For those sales that are affected by the proposed facility, it is usually extremely difficult to separate a general increase in value from an increase in value caused by the facility. It is very undesirable to use this type of comparable sale in a condemnation trial; therefore, every effort should be made to support the appraisal by comparable sales that have not been influenced by the project, except as support for the value of the remainder after.
When a major or substantial increase in value is indicated from the information obtained in a single updated appraisal, an additional appraisal report by a different appraiser should be obtained to document properly the state’s position on the value.