Chapter 1: Introduction

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Section 1: Preface

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Purpose

The purpose of this manual is to provide a flexible guide to the understanding and effect of the existing state and federal laws and policies, as they apply to the field of appraisal and appraisal review, for those appraisers or reviewers working for the Texas Department of Transportation (TxDOT) or local public agencies (LPAs) involved with TxDOT on transportation projects.

The appraisal policy subjects discussed here are not usually encountered in other types of appraisals. They are unique to right of way appraising, particularly for partial acquisitions.

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Manual Organization

Chapter 2, Operating Procedures, covers the type & number of appraisals, appraiser qualifications, & evaluations, use of fee and staff appraisers, other services, assigning appraisals, independent appraisals, confidentiality of appraisals, working with property owners, reappraisals, property adjustment work & economic adjustments, and other matters pertaining to the appraisal assignment.

Chapter 3, Valuation – Legal Aspects and Policy, considers those items specific to right of way appraising and reviewing. Items discussed are the purposes of appraisals; the definition of market value; Legal instructions on Personalty and Realty, Non-compensable Items, Damages and Enhancements, Control of Access Rights; and, procedures on appraisals of specific types and situations such as Advertising Sign and Leasehold interests, Bisected Improvements, Convenience Stores, Fencing, Mobile Homes as Realty, Partial Acquisitions, Private Utility Lines, Project Influence, etc. The discussions of a legal nature do not attempt to give the full basis for the law. They set forth the accepted opinions concerning the handling of items in the appraisal process. The appraiser may or may not agree with these conclusions. However, these conclusions conform to the laws of Texas and the appraiser must follow them for an appraisal to be legally correct. In its role as a sovereign governmental agency, TxDOT determines policy on right of way appraisal procedures with these conclusions in mind.

Chapter 4, Appraisal Forms, discusses requirements and instructions in completing the Real Estate Appraisal Report (forms ROW-A-6 and ROW-A-5); Real Estate Value Finding Report (form ROW-A-7); and, the Memorandum of Value Determination (form ROW-A-8). Also discussed are miscellaneous forms such as forms ROW-A-9 (Property Classification Agreement); ROW-A-10D (Value Determination); ROW-A-13 (Declaration as to Method of Handling of Mobile Home); and, form ROW-A-PVD (Parcel Value Determination for LPA’s).

Chapter 5, Appraisal Review, discusses the review of appraisal reports plus special appraisal problems that do not appear in all reports. The sections within this chapter discuss reviewing personnel; reviewing for completeness, consistency, and variances in land and component values; reviewing the appraisal of the “Remainder After” and “uneconomic” remainders; and reviewing the appraisal of lessee interests and updated values.

Chapter 6, Establishing Right of Way Values, describes the completion of form ROW-A-10 (Tabulation of Values) to obtain approval of a recommended value, a revised value, a cancellation of a value, and/or an administrative settlement. Also discussed are “overlooked items of value” and the discussion of an “X-parcel.”

Chapter 7, Eminent Domain – State Acquisition, deals with the recommendations of appraisers and expert witnesses for eminent domain proceedings and/or jury trials; obtaining updated or new appraisal reports; Special Commissioners’ Award and Mediation Settlements analysis procedures; participation guidelines for the Pre-Mediation Conference and the actual Mediation; and, a discussion on using comparable sales subsequent to the “Date of Taking” in appraisal reports.

Chapter 8, LPA Acquisition, provides information on the state's program to acquire right of way in cooperation with LPAs (Local Public Agencies), with or without federal-aid, though most of the information in the manual applies to both the federal aid and LPA programs. The exceptions that apply to the LPA program are noted in this special chapter. Appraisal, appraisal review, and eminent domain guidelines are also included in this chapter.

Chapter 9, Special Site Appraisal Situations, contains information and procedures regarding appraisals and valuations of:

There is an appendix:

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Acronyms and Abbreviations Used in This Manual

CFR

Code of Federal Regulations

Commission

Texas Transportation Commission

CS (formerly OAS)

Commercial Signs (formerly Outdoor Advertising signs (billboards))

DBE

Disadvantaged Business Enterprise

FHWA

Federal Highway Administration

LG

Local Government

LPA

Local Public Agency, i.e., a municipality, county, city, etc.

OAG

Office of the Attorney General

PREAS

Professional Real Estate Appraisal Services

RFP

Request for Proposal

ROW

Right of Way

ROW PD

Right of Way Project Delivery

ROW Program Office

Right of Way Division Headquarters in Austin, TX

ROWAPS

Right of Way Acquisition Professional Services

ROWIS (former software application system)

Right of Way Information System, TxDOT's former right of way acquisition data storage, tracking and retrieval software application

TAC

Texas Administrative Code

TALCB

Texas Appraiser Licensing and Certification Board

TxC (This software replaces ROWIS.)

TxDOTCONNECT

TxDOT

Texas Department of Transportation

USPAP

Uniform Standard of Professional Appraisal Practice

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Definitions Used in This Manual

Administrative Review - An administrative review process performed by a TxDOT staff member that is not a licensed appraiser.

Administrative Reviewer - A TxDOT staff member who signs the administrative review document only, but is not a licensed appraiser.

Appraisal - The term appraisal means a written statement independently and impartially prepared by a qualified appraiser setting forth an opinion of defined value of an adequately described property as of a specific date, supported by the presentation and analysis of relevant market information. (source: 49 CFR 24.2(a)(3))

Appraisal Consulting - The act or process of developing an analysis, recommendation, or opinion to solve a problem, where an opinion of value is a component of the analysis leading to the assignment results. An appraisal consulting assignment involves an opinion of value but does not have an appraisal or an appraisal review as its primary purpose.

Appraisal Practice - Valuation services performed by an individual acting as an appraiser, including but not limited to appraisal and appraisal review. Appraisal practice is provided only by appraisers, while valuation services are provided by a variety of professionals and others. (source: USPAP 2022-2023 edition)

Appraisal Review - (noun) The act or process of developing an opinion about the quality of another appraiser's work (i.e., a report, part of a report, a work file, or some combination of these), that was performed as part of an appraisal or appraisal review assignment; (adjective) of or pertaining to an opinion about the quality of another appraiser's work that was performed as part of an appraisal or appraisal review assignment. (source: USPAP 2022-2023 edition)

Appraiser - One who is expected to perform valuation services competently and in a manner that is independent, impartial, and objective. (source: USPAP 2022-2023 edition)

(2nd Option) “Certified appraiser” means a person who is certified under this chapter to practice as a certified general or certified residential appraiser.(source: Texas Occupation Code, Chapter 1103.003(5-a))

(3rd Option) An individual certified by the Texas Appraiser Licensing and Certification Board to provide real estate appraisal services in Texas.(source: 43 TAC 9.81(1))

Commercial Sign - A sign that is: (A) at any time intended to be leased, or for which payment of any type is intended to be or is received, for the display of any good, service, brand, slogan, message, product, or company, except that the term does not include a sign that is leased to a business entity and located on the same property on which the business is located; or (B) located on property owned or leased for the primary economic purpose of displaying a sign. (source: 43 TAC 21.142)

Department -Texas Department of Transportation (also see TxDOT as an acronym).

Department Certified Appraiser - A real estate appraiser, either state-certified general or state-certified residential having received department certification with TxDOT. (See definitions at 43 TAC 9.81)

Eminent Domain - Authority to exercise the power to take private property for public use upon payment of just or adequate compensation, based on the theory that property is granted to the property owner upon condition that it may be taken to serve the necessities for the sovereign power. Agencies created by the state to serve the public may exercise the power of eminent domain where that power is conferred by statute.

Jurisdictional Exception - An assignment condition established by applicable law or regulation, which precludes an appraiser from complying with a part of USPAP. (source: USPAP 2022-2023 edition)

Off-System - Off-system is off the TxDOT-designated highway system. (source: TxDOT Glossary October 2013)

On-System - On-system is on the TxDOT-designated highway system. (source: TxDOT Glossary October 2013)

OnBase - OnBase is the enterprise content management platform used by TxDOT to electronically store documents.

Professional Services - Services directly related to professional practices as defined by Texas Government Code, Chapter 2254, Subchapter A.

Real Estate Appraiser - An individual licensed and having either residential certification or general certification to provide real estate appraisal services in the State of Texas. For the purposes of this manual, the term “contract fee appraiser” is used when referencing a licensed certified residential appraiser or certified general real estate appraiser that is performing appraisal services for TxDOT and is signing and certifying the appraisal document.

Real Property Consulting - The act or process of developing and reporting an analysis, recommendation, or opinion concerning real property, where an opinion of value is not a component of the analysis, recommendation, or opinion.

Request for Proposal (RFP) - A request for submittal of a proposal that demonstrates competence and qualifications of the provider to perform the requested services and shows an understanding of the specific project.

Review Appraiser - An individual licensed and having residential certification or general certification to provide real estate appraisal services in the State of Texas. For purposes of this manual, the term “contract review appraiser” is used when referencing a licensed certified residential or certified general real estate appraiser that is performing appraisal review services for TxDOT and is signing and certifying the appraisal/review document. The type of property reviewed must fall within the appraiser's permitted scope of practice under the Texas Appraiser Licensing and Certification Act.

Right of Way Acquisition Professional Services (ROWAPS) - Work disciplines of right of way acquisition services, including appraisal services, but excluding surveying, engineering, or architectural services.

TxDOTCONNECT (TxC) - TxDOT's custom-built system for managing the delivery of transportation programs, projects, and right of way. Visit TxDOT's website for more TxDOTCONNECT resources. TxC replaces the Right of Way Information System (ROWIS) software program.

Uniform Act - The term Uniform Act means the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (Pub. L. 91-646, 84 Stat. 1894; 42 U.S.C. 4601 et seq.) and amendments thereto.

Work Authorization - A written authorization to begin work issued according to the entity and prime contract in place with TxDOT. The work authorization includes a detailed scope of work as well as a contract period and maximum amount payable that does not exceed the time or money restrictions specified in the prime contract.

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The “Prompt Payment Law”

The “Prompt Payment Law,” codified in Government Code, Section 2251, prescribes that a payment by a state governmental agency under a contract executed on or after September 1, 1987, is overdue on the 31st day after the later of:

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  • the date the governmental entity receives the goods under the contract;
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  • the date the performance of the service under the contract is completed; or
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  • the date the governmental entity receives an invoice for the goods or service.

A payment begins to accrue interest on the date the payment becomes overdue.

Therefore, it is imperative that the ROW Program Office, Real Estate Services Section of ROW Division, and ROWAPs make every effort to process appraisal payments in a timely manner, and thereby avoid incursion of interest.

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