Valuation
Cost to cure, and when it is the wrong answer
Where a taking creates a problem that can be fixed, the fix may be cheaper than the loss in value. Paying for the fix is then the correct measure. The method is sound, and it is also the most common way severance damages get written out of a report.
The principle
The cheaper of two measures, not a cheaper measure
Suppose a taking removes a driveway. The remainder is worth sixty thousand dollars less without access. A new driveway can be built for twelve thousand dollars and restores access completely. The correct compensation is twelve thousand, not sixty, because the owner can be made whole for less.
That is the principle, and it is right. Compensation is indemnity, and indemnity is satisfied by the cheaper of restoring the property or paying the loss.
The abuse is the second half of the test. Cost to cure is valid only where the cure actually works. Where the new driveway is steeper, narrower or worse positioned, the property has not been restored, and the residual difference is still compensable. A report that pays for the cure and stops has paid for part of the loss.
Testing a proposed cure
Four questions to ask of any cure in a report
| Question | Why it matters |
|---|---|
| Does it restore the same utility | A replacement parking area with fewer spaces is not a cure for the lost spaces |
| Can it be built on the remainder | A cure that needs land the owner no longer has is not available |
| Is it permitted | Setbacks, access permits and zoning can rule out the fix the appraiser assumed |
| What is left over | Any loss remaining after the cure is severance damage and must still be paid |
Typical cures
Where the method is genuinely appropriate
Replacing a driveway or entrance
Where the new one serves the property as well as the old one did.
Relocating a well or septic system
Where the remainder has suitable ground and permits are available.
Rebuilding fencing or a retaining wall
Straightforward where the replacement is equivalent.
Regrading a disturbed area
Where the finished levels restore drainage and usability.
Moving irrigation or farm infrastructure
Where the operation can continue as before once moved.
Replacing lost parking on remaining land
Only where the remainder genuinely has room for it.
Questions about cost to cure
The agency has offered me the cost of a new driveway. Should I accept it
Only if the new driveway restores what the old one did. If it is longer, steeper, on a worse sight line or serves the property less well, the difference is still a loss and still compensable.
Who pays if the cure costs more than estimated
The award is a sum of money, not an obligation to perform the work. If the estimate was low, the shortfall usually falls on the owner, which is a reason to test the estimate before accepting it.
Can I take the money and not do the work
Generally yes. The award compensates the loss; how the owner uses it is the owner\u2019s decision. The figure should still be tested as though the work would be done.
Does cost to cure cap my compensation
Only where the cure is complete. Where it is partial, compensation is the cost of the cure plus the loss that remains.
Get a valuation question answered
If an offer has arrived and the number does not match what you believe the property is worth, the appraisal behind it is the place to look. Start with the pages below.