UP Standards

4.13.3. Landowners. Each and every federal acquisition involves a landowner—usually, but not always, as a willing participant. Landowners are entitled to just compensation if their property is acquired for public purposes, and to receive fair and equitable treatment no matter which agency is acquiring their land. During the appraisal process, landowners must be given an opportunity to accompany the United States’ appraiser on the inspection of their property under the Uniform Act.1199 The site visit is a chance for landowners to share information about their property that they believe should be considered in the valuation process (Section 1.2.6.4). 

4.13.2. Government Agency Staff. Federal realty acquisitions require the contributions of a variety of government agency staff, including realty specialists, surveyors, engineers, title researchers, negotiators, project managers, contract procurement specialists, executives, appraisers, review appraisers, and attorneys. Critical to the valuation process, agency staff identify property for federal acquisition; work with government and outside appraisers to develop an appropriate scope of work for each valuation assignment; provide necessary information to appraisers, such as property descriptions, title information, maps, surveys and other data; and issue legal instructions. Agency staff are also tasked with explaining the United States’ offer of just compensation and its basis, which often involves explaining the appraisal process, the data considered by the appraiser, and the reasons improper considerations…

4.13.1. Appraisers and Other Experts.Appraisers assist in the determination of just compensation by developing an opinion of market value,1188 often in consultation with experts in other fields.1189 In fact, there is a long history in the United States of objective evaluators appraising property value to assist and inform the determination of just compensation—since well before a distinct real estate appraisal profession began to emerge in the early twentieth century.1190  Serving this important function requires expertise, diligence, sound judgment, and objectivity, whether appraisers or other experts are retained by the United States, landowners, or other parties.1191 The appraiser must be diligent in data collection and competently apply the accepted methods and techniques of the appraisal profession as well as the special…

4.13. Common Purpose (Roles and Responsibilities).The importance of sound appraisals in federal acquisitions cannot be overstated. It is the United States’ obligation to serve the general public and protect the common welfare by paying just compensation whenever property is needed for public purposes, and reliable, objective valuations are critical to achieving this end.1187 Appraisers, landowners, attorneys, and government agency staff all play important roles in the federal acquisition process, whether or not litigation is anticipated. 

4.12. Appraisers’ Use of Supporting Experts’ Opinions.Some appraisal assignments may require the appraiser to rely on other experts’ opinions on technical or other specialized issues.1178 “An expert cannot be an expert in all fields, and it is reasonable to expect that experts will rely on the opinion of experts in other fields as background material for arriving at an opinion.” 1179 But the appraiser cannot merely assume such supporting experts’ reports are accurate and reliable. Rather, the appraiser must review all supporting opinions and can rely on or adopt them only if the appraiser determines, after review, that all supporting opinions are credible, reliable, and factually supported.1180 As the Tenth Circuit succinctly stated: “[Any expert] opinion . . . must…

4.11.3.3. Substitute-Facility Compensation.As noted above, it is constitutionally permissible for the United States to provide compensation in the form of a substitute facility instead of cash.1161 This form of compensation may be the most practical and equitable means of compensating landowners in certain “peculiar” acquisitions.1162 In such circumstances— typically acquisitions of properties that are owned by a public entity, dedicated to public use, and for which a functional substitute is required and payment of market value would deviate significantly from making the owner whole—“compensation by substitution would seem to be the best means of making the parties whole.”1163  But while a substitute facility is a constitutionally acceptable form of just compensation instead of cash, the Supreme Court has repeatedly rejected…

4.11.3.2. Corridors and Rights of Way.Acquisitions of strips, corridors, or rights of way via negotiated purchase or affirmative condemnation involve many similar valuation problems to those found in acquisitions of streets. Such acquisitions often involve preexisting encumbrances, such as easements for rail or transmission line use, that may deprive them of value for other uses.1150 The appraiser must understand the precise property interest(s) being acquired and the impact of any existing encumbrances.1151 Typically, legal instructions are required.1152  Rails-to-Trails Claims.These issues frequently arise in so-called rails-to-trails cases. The National Trails System Act Amendments of 19831153 has prompted numerous inverse takings claims regarding adjacent landowners’ potential reversionary interests in rail corridor lands.1154 As in any inverse taking claim, the court must first…

4.11.3.1. Streets, Highways, Roads, and Alleys.Under federal law, streets, roads, highways, and alleys typically have only nominal market value, and therefore only nominal compensation is due for their acquisition.1130 This is because streets and similar property are normally long narrow strips of land that have been legally dedicated to use as streets or highways, depriving them of value except as thoroughfares.1131 As discussed in more detail in Section 4.6.5 (Easement Valuation Issues), it is critical for the appraiser to understand the precise property interest(s) being acquired and the impact of any existing encumbrances.1132 Legal instructions are typically required. The Ninth Circuit explained the process for determining just compensation for the taking of state-owned lands dedicated as public thoroughfares in California…

4.11.3. Streets, Rail Corridors, Infrastructure, and Public Facilities.Federal acquisitions may involve property already being used to benefit the public—such as a street, landfill, or other public facility—owned by public or private entities that may be obligated to replace the facility acquired by the United States. But the Supreme Court has unanimously held that none of these facts “require suspension of the normal rules for determining just compensation.”1127 Accordingly, compensation for streets, highways, roads, alleys, other infrastructure, or public facilities is measured by the same market value standard applied to other types of property, whether publicly or privately owned. “Deviation from this measure of just compensation [is] required only ‘when market value [is] too difficult to find, or when its application…

4.11.2. Federal Grazing Permits.In federal acquisitions involving ranch lands, appraisers must disregard any value added to those lands as a result of their actual or potential use in combination with adjacent federal lands under revocable grazing permits.1118 Federal grazing permits are chiefly administered by the Bureau of Land Management (U.S. Department of Interior) under the Taylor Grazing Act 1119 and the Forest Service (U.S. Department of Agriculture) under the Granger-Thye Act.1120 By law, these federal permits to use the public domain for grazing are revocable and create no property rights in the holder.1121 Thus, while grazing permits typically remain with a privately owned base property for many years, permits revert to the federal agency when the base property is sold…