Valuation
Valuing what the owner keeps
The after value is the most contested figure in condemnation appraisal, because it is an opinion about a property that does not yet exist in the form being valued.
The rule
The remainder is valued with the project in place
This is the point most often missed. The remainder is not valued as a smaller version of the original property. It is valued as it will exist once the project is complete, including everything the project puts next to it.
If a four lane road will run where the garden was, the remainder is a house next to a four lane road. If a transmission line will cross the paddock, the remainder is a farm with a transmission line across it. The physical reduction in area is often the smallest part of the harm.
A useful test when reading a report. Does the after value narrative describe the project at all? If the remainder is discussed only in terms of reduced acreage, the appraisal has valued a smaller parcel rather than the parcel the owner will actually have.
What changes
The six ways a remainder commonly loses value
Size and shape
A parcel reduced below a threshold, or left long and narrow, supports fewer uses than the same area in a workable shape.
Access
A changed entrance, a longer route or a loss of direct frontage affects commercial property immediately and residential property more slowly.
Proximity
Being closer to traffic, noise, light or activity reduces what residential buyers will pay, and the effect is measurable in comparable sales.
Utility of improvements
A building whose yard, parking or loading area has gone may no longer serve its purpose even though the building is untouched.
Compliance
Setbacks, parking ratios and lot coverage can fail after the taking, leaving a legal non conforming use with limited rights.
Operations
On farms and industrial sites, a severed service road or relocated irrigation changes how the whole operation runs.
Highest and best use, again
The remainder gets its own conclusion
A complete appraisal states highest and best use twice: once for the whole property before, once for the remainder after. Where a report states it only once, the appraiser has assumed the remainder can still be used as the whole was used, which is sometimes true and often not.
A development site reduced below the minimum area for subdivision has a different highest and best use. So does a corner commercial lot that loses its corner. So does a farm whose only crossing point has been removed. Each of those changes shows up as a lower after value, and each is invisible if the question is not asked.
Questions about the remainder
Can I be paid for the remainder as well, if I no longer want it
Where the remainder is an uneconomic remnant, the agency generally must offer to buy it. Where it remains usable, the remedy is severance damages rather than acquisition.
The project has not been built yet. How can anyone value the result
By valuing the remainder as it will be once the project is complete, using the plans. That is a projection, which is why it is contested, and why plans and cross sections matter as evidence.
My neighbour lost nothing and their property is as close as mine
Damage shared generally with the neighbourhood, rather than arising from the taking of your property, is usually not compensable. The distinction between general and special damage is a real one and it frequently feels arbitrary to owners.
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.