Easements are the right to use another person's land for a specific purpose. They can benefit only a named individual, or they can be "easements appurtenant," which means that they attach to and run with the benefiting land, no matter who owns it. Easements are an interest in land and, as such, they have a value. Determining that value is important, both on the acquisition of a proposed easement, and when the burdened is being sold.
Gather details of the easement. If it is already granted, obtain a copy of the easement deed. The value of the easement depends on its location, purpose and use. Put simply, appraisers do not value the easement itself, but its effect on the burdened property. For example, a small gutter overhang between two residential houses is unlikely to have any impact on the use of the burdened house, so has minimal value. A large right of way that prevents an owner from developing his tract of land is another matter.
Ascertain the market value of the whole of the burdened land, as if the easement does not exist. This is not just the land over which the easement is exercised, like the width of a right of way, but the larger plot owned by the burdened landowner. Express the market value as an appropriate per unit value (per square foot, per acre). This is your "before scenario."
Consider the remainder. This is the burdened landowner's larger tract of land, less the easement area. Value the remainder on the basis that it is subject to the easement. Use comparison or paired sales analysis to assess the value of other plots in the locality, sold with and without the burden of a similar easement, to ascertain the impact of the easement. Adjust for special circumstances; for example, the easement will have a lesser value on the remainder if it is limited in time. Express the value according to your price per unit. This is your "after scenario."
Measure the easement land. Include the whole length and width. Do this by reference to plans and a ground inspection.
Deduct the "after scenario" value from the "before scenario" value to arrive at a value per unit of the easement land. Multiply by the measured area of the easement land to arrive at a total market value.
- Appraising easements is neither an exact science nor a straightforward task. It relies heavily upon the appraiser having access to comparable market evidence. Unless you have experience in easement appraisal, consult an expert.
- The "before and after" technique is not the only appraisal methodology. Different jurisdictions use different methodologies for appraising easements. Use the one applicable to your jurisdiction, otherwise your appraisal will be out of kilter with your local market.
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