Section 3: Legal Instructions - Noncompensable Items
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On a proposed partial acquisition for transportation purposes, the appraiser is to be advised that his/her analysis and report shall give no consideration to any damaging element, such as the exercise of the state’s police power, which may result in personal damages suffered by the owner. This is a sovereign power of the state, and resulting personal damages are classified as “damage without violation of a legal right”. Examples of such personal damages are loss in traffic volume, loss of income, change in direction of traffic flow, circuity of travel, and project influence. This also includes the denial of the right to cross an existing highway from one part of a property to another unless there is an existing retained right. Any one of such elements could result in a material loss to a business, but remain as a personal loss suffered by the owner. This loss in value is usually caused by the effect of the overall project on the neighborhood rather than by the acquisition of a portion of the property.
In addition, no damage shall be considered to result from any element creating an annoyance or inconvenience to the owner personally. Prime examples of such elements are the existence of noise, fumes, or dust or the loss of light, air, or view.
Damages attributable to noise, dust, increased traffic, or other temporary inconveniences incident to the construction of the highway are non-compensable [Felts v. Harris County, 915 S.W.2d 482 (1996)]. Generally, traffic noise from highway operation is considered to be a “community damage” therefore not constitutionally compensable [Felts].
The matter of whether an assessed damage is compensable presents a particular dilemma to the appraiser. Since this is a legal rather than an appraisal matter, the appraiser should request legal instructions. While his/her personal opinion may not be in agreement with such instructions, the report must be in accordance with them, and the resulting value is “subject to legal instructions” rather than an “instructed value.”