One day, you may find yourself harangued by a utility land agent, eager to purchase an easement through your property.
The agent may start out offering you the lowest value in the company's prepared, secret value range for easements on your property. This number is derived from "market value" studies of similar properties in your area. The utility conducts these studies for its own information. Try asking to see the relevant market value study used to value your property and watch the agent dance.
The market value study attempts to make a comparison between your property and others that have sold in the recent past. But instead of using all data available, certain data is rejected. Everyone knows that this "Garbage In, Garbage Out" magic math method is used to skew the results.
Once a company has completed its market study, your property is compared to the typical property and adjustments are made, either positive or negative, based on your property's own unique attributes. If you've ever seen a property appraisal, it's the same basic concept.
The utility is comparing your agriculturally zoned property to another zoned the same way. However, zoning could change to allow other possible future uses, couldn't it?
In some instances, a farmer's wealth is tied up in his land. Instead of a fat 401(K) account stuffed with employer match, the farmer may rely on development or sale of his property to finance his retirement. Building an overhead electric transmission line, or a buried gas or oil pipeline changes future possibilities for the property. What once was a prime chunk of land for building new homes is now not suitable for that purpose. How is the landowner compensated for foregone future use of his property when a land agent makes an offer?
He's not. Consideration of factors like this, known as a property's “highest and best reasonably available use” under Pennsylvania law, only come into play when the value of your property is determined by a court during an eminent domain suit. You may end up being more suitably compensated if you refuse all the land agent's offers.
Check out this case from Pennsylvania that was recently decided by the 3rd Circuit. While the court found that the pre-taking valuation was too high, it was a matter of multi-family housing vs. single-family housing. It wasn't a choice between agricultural and residential or commercial. What was really interesting is the court's affirmation of the post-taking valuation which found that the easement materially affected the property's value for future development. It found that the utility's authority to "approve" future land use in the easement gave the utility the ability to arbitrarily deny any future land use proposed by the property owner, and this affected the property's future value for development.
How might a transmission line easement across your property affect your future plans and take money out of your pocket? Just one more reason to slam the door in the land agent's face.
The agent may start out offering you the lowest value in the company's prepared, secret value range for easements on your property. This number is derived from "market value" studies of similar properties in your area. The utility conducts these studies for its own information. Try asking to see the relevant market value study used to value your property and watch the agent dance.
The market value study attempts to make a comparison between your property and others that have sold in the recent past. But instead of using all data available, certain data is rejected. Everyone knows that this "Garbage In, Garbage Out" magic math method is used to skew the results.
Once a company has completed its market study, your property is compared to the typical property and adjustments are made, either positive or negative, based on your property's own unique attributes. If you've ever seen a property appraisal, it's the same basic concept.
The utility is comparing your agriculturally zoned property to another zoned the same way. However, zoning could change to allow other possible future uses, couldn't it?
In some instances, a farmer's wealth is tied up in his land. Instead of a fat 401(K) account stuffed with employer match, the farmer may rely on development or sale of his property to finance his retirement. Building an overhead electric transmission line, or a buried gas or oil pipeline changes future possibilities for the property. What once was a prime chunk of land for building new homes is now not suitable for that purpose. How is the landowner compensated for foregone future use of his property when a land agent makes an offer?
He's not. Consideration of factors like this, known as a property's “highest and best reasonably available use” under Pennsylvania law, only come into play when the value of your property is determined by a court during an eminent domain suit. You may end up being more suitably compensated if you refuse all the land agent's offers.
Check out this case from Pennsylvania that was recently decided by the 3rd Circuit. While the court found that the pre-taking valuation was too high, it was a matter of multi-family housing vs. single-family housing. It wasn't a choice between agricultural and residential or commercial. What was really interesting is the court's affirmation of the post-taking valuation which found that the easement materially affected the property's value for future development. It found that the utility's authority to "approve" future land use in the easement gave the utility the ability to arbitrarily deny any future land use proposed by the property owner, and this affected the property's future value for development.
How might a transmission line easement across your property affect your future plans and take money out of your pocket? Just one more reason to slam the door in the land agent's face.
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