1.4.6. Larger Parcel Analysis. Essential to the appraiser’s analysis of highest and best use is the determination of the larger parcel. These Standards define the larger parcel as that tract, or those tracts, of land that possess a unity of ownership and have the same, or an integrated, highest and best use.

The larger parcel is that tract of land which possesses a unity of ownership and has the same, or an integrated, highest and best use.

Determining unity of ownership may require legal instruction.

Elements to be considered in determining the larger parcel are contiguity (or proximity) as it bears on the highest and best use of the property, unity of ownership, and unity of highest and best use. 

The appraiser must make a larger parcel determination in every appraisal developed under these Standards.47 It is not uncommon for an appraiser’s conclusion regarding the larger parcel to be different from the specific parcel the client agency identified to be appraised, as the appraiser cannot determine highest and best use without considerable investigation and analysis. In such instances, the appraiser shall inform the client agency of the determination of the larger parcel and the agency shall amend the appraisal assignment accordingly. 

The appraiser must make a larger parcel determination regardless of whether the agency designated an acquisition as a total acquisition or a partial acquisition. This is so because whether an acquisition is a total or partial acquisition cannot be determined until the appraiser has determined the highest and best use and the larger parcel. Under the rules for larger parcel determination, as described in Section 4.3.4, two physically separate tracts may constitute a single larger parcel, or a single contiguous physical tract may constitute multiple larger parcels. This can be important not only in consideration of damages and benefits, but also in the selection and analysis of comparable sales.48 

In light of the discussion in Section 4.3.4 regarding the larger parcel, it is recommended that the appraiser begin an analysis of the unity of ownership test with the premise that, in making a larger parcel determination, it is allowable to consider all lands that are under the beneficial control of a single individual or entity even though title is not identical in all areas of the tract(s). If the appraiser then concludes that the larger parcel constitutes lands that are under the beneficial control of a single entity (but title is not identical), the appraiser’s larger parcel determination, together with the facts upon which it is based, should be submitted to the client agency’s legal counsel for review before the appraiser proceeds. Based on applicable case law and the facts of the case, legal counsel can then determine whether, as a matter of law, the unity of ownership test of the larger parcel is present, and provide written legal instructions to the appraiser accordingly. 

Larger parcel determinations in appraisals for federal land exchanges, or in connection with inverse condemnation claims, may require different considerations than those described above. For a discussion of those potential differences, appraisers should refer to Section 1.12 regarding federal land exchange appraisals and to Section 1.11 regarding inverse condemnation appraisals.