When the Valuation Premise Itself Must Be Tested
THE CHALLENGE
A property dispute involving an easement of right of way may initially appear to present a simple valuation question.
A proposed six-meter-wide right of way would affect approximately 655 square meters of a servient property while providing access to a 15,285-square-meter dominant estate. At first glance, the assignment appears straightforward: determine the value of the 655 square meters affected by the proposed easement.
But the area to be valued is itself based on assumptions that may materially affect the valuation result. Why this route? Why six meters? Would three or four meters adequately provide the required access? Are other feasible routes available? How would each alternative affect the servient and dominant estates?
The valuation problem therefore extends beyond assigning a unit value to the affected land. It requires determining the economic consequences of the proposed easement and its feasible alternatives.
THE AA+ CONSULTING APPROACH
AA+ does not begin by simply multiplying 655 square meters by a unit value. We first examine whether the assumptions defining the valuation problem should themselves be tested.
Alternative routes and widths are identified and evaluated as separate property scenarios. For each feasible configuration, the analysis considers the area burdened, the resulting effect on the use and development potential of the servient estate, and any corresponding diminution in its market value.
The analysis also examines the other side of the transaction. Access created over a relatively small portion of one property may materially affect the utility, development potential, highest and best use, marketability, and value of a much larger dominant estate. The economic effect of access must therefore be distinguished from the value of the land physically occupied by the easement.
AA+ does not determine which route or width the law ultimately requires. That determination belongs to the appropriate legal decision-maker. Our role is to transform the property and economic issues embedded in the dispute into independently supportable valuation evidence.
In Litigation Valuation & Consulting, sometimes the difficult valuation question is not “What is the value?” but “What exactly should be valued, and why?”
Consulting identifies the valuation problem. Valuation measures its economic consequences. Expert evidence brings that analysis into the adjudicative process.
AA+ APPRAISAL & CONSULTANCY, INC.
Litigation Valuation & Consulting
When Property Value Becomes the Dispute
