How to Evaluate an Eminent Domain Offer

If you are embroiled in an eminent domain fight right now, you are probably thinking about how the government can take your property, how unfair it is, and how in the end possibly no money can compensate you for what is being taken. It is also equally as likely that you have accepted the fact that your Seattle, Spokane or other Washington city or county you live in will be taken and you have now turned your attention to making sure you get as much money as you possibly can (otherwise known as just compensation). Either way, in the end, assuming the property is being taken for a valid public purpose, your fight with the condemning authority is going to be about money, and will cost money to correctly be evaluated.

The State Gives You $750 to Evaluate the Offer for Your Property!

The Revised Code of Washington section 8.25.020 provides you, the landowner, a sum equal to the various expenditures actually and reasonably incurred by those with an interest in the property in the process of evaluating the condemnor's offer to buy the property of up to $750.00. The title of the rule is Payment to Defray Costs of Evaluating Offer - Amount.

Do Not Spend This Money to Run Out and Hire an Appraiser!

You need an appraiser for trial, not for negotiation! If you are speaking with the condemning authority, in all likelihood they will tell you this money you are entitled to is available to you and suggest you hire an appraiser to take a cursory look at the property to determine the just compensation owed to you.

There are two major problems with this, however: first, $750.00 is not enough money for an appraiser correctly valuate your property; and second, without the proper instructions, or "problem," given to the appraiser, the determination they make will be flawed, and most generally flawed in the government's favor. It follows an old saying, garbage in, garbage out. This means if you use the wrong rules or information at the beginning of your analysis you are destined to get a wrong answer.

Before you are even reading this you are probably saying "I know what this attorney is going to say. He is going to tell me to spend the money on him." If you were saying this, you are actually correct. But let me explain why. If your property is being taken for eminent domain, it is subject to very specific valuation rules established by both statutory and case law. Some experienced appraisers may be aware of some of these rules, and have some experience in eminent domain law, but often they may not be aware of specific rules that can positively effect the value of your property (as time goes on I will explain and discuss some of these rules - for now you will just have to trust me!).

Appraisers generally have to follow what is called USPAP, or the Uniform Standards of Professional Appraisal Practice. It contains very specific rules, some of which are directly against the way a property in eminent domain is appraised. The primary way an appraiser can deviate from those rules, particularly in condemnation, is if an eminent domain attorney directs them to recognize a jurisdictional exception - basically a rule that does not conform to USPAP. Without this, you will in most circumstances start with "garbage in" to the appraisal problem, resulting in a worthless valuation. And in any event, what you need at this point in the process is not an appraisal, but someone who can evaluate the eminent domain offer given to you. Money is made for you by not getting your own expert but poking holes in theirs.

Use the Money Afforded to You to Have the Condemning Authority's Offer Evaluated and Gather Data for Your Counteroffer

Condemning authorities, including: Washington state, Washington Department of Transportation, Sound Transit, Washington counties, Washington cities, Washington water districts and utility companies, are generally trying to evaluate your property for taking by eminent domain in the most fair way possible. But the problem is, they often incorrectly diagnose the problem, and the appraisal that results is not indicative of the true measure of just compensation. In all honesty, condemning authorities know this. How do I know? I work for one (although shortly I'll be leaving it - in Kansas - to help property owners). Although it was always our goal to get the numbers right, often times we missed something or incorrectly evaluated a property under the rules of eminent domain.

And when was usually the first time we found out we missed something? When the landowner's attorney sent us a letter itemizing all of the things we missed. This includes incorrectly valuing the severance of a property, the damages to the remainder of a property, an incorrect determination of highest and best use, and failing to utilize relevant comparable sales. But often it amounted to a significant difference in just compensation. So utilize that money not by hiring an appraiser, but by putting it toward evaluating the condemning authority's appraisal.