01543588

Monograph

http://www.trb.org/Main/Blurbs/171619.aspx

http://www.trb.org/Publications/Blurbs/171619.aspx

Since 2005, a myriad of social and economic circumstances, including, but not limited to, diminished property values, foreclosures, loan values exceeding actual fair market values, natural disasters, and other casualties have presented significant challenges in the acquisition of properties for transportation projects. Outstanding liens encumbering those properties often exceed the actual and current fair market values. Figures prepared by First American CoreLogic, a real estate information company in California, showed that at the end of the third quarter of 2011, 10.7 million, or 22.1 percent of all residential properties with a mortgage, were in negative equity. The fair market value rule in these circumstances works an involuntary hardship on property owners and lienholders, leaving a forced loss on one or more parties (i.e., the property owner, condemnor, or lienholder). How do condemning agencies and the courts resolve the problem of just compensation in light of declining property values caused by financial calamities beyond the parties’ control? Do statutory remedies exist or have courts created judicial exceptions to the fair market rule for just compensation? This digest considers whether other approaches to valuation, such as the income approach or the replacement or reproduction cost method, are alternatives to the comparable sales approach that may result in a higher valuation for the purpose of deciding just compensation. The digest discusses whether the concept of just compensation allows for any judicial flexibility in determining the value of real property when valuations are generally depressed. This digest also discusses whether there are Depression-era and later precedents that are relevant to the determination of just compensation, such as during the recent financial crisis. The material discussed in this digest should be useful to attorneys, real estate officials, planners, financial officials, developers, engineers, property owners, and community leaders.

Project 20-6

English

64p

2014-10

NCHRP Legal Research Digest

9780309284271

Digital/other

Appendices; References

Eminent domain; Legal factors; Property values; Real property; Valuation

Administration and Management; Finance; Highways; Law; I10: Economics and Administration

TRIS, TRB, ATRI

Nov 18 2014 12:04PM