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How is fair market value determined in North Carolina condemnation cases?

How do we decide a value?

How is fair market value determined in North Carolina condemnation cases?

Determining fair market value in North Carolina condemnation cases involves assessing the value of the property being taken based on its highest and best use in an open and competitive market. The fair market value is crucial because it serves as the basis for calculating just compensation owed to the property owner. Essentially, we want to determine the best fair market value just before the taking, and the best fair market value just after the taking. The difference in those two numbers constitutes the amount our clients should be justly compensated. Here are key factors and methods used to determine fair market value in North Carolina condemnation cases:

1. Appraisal:
The primary method for determining fair market value is through a professional appraisal. An appraiser, typically hired by the condemning authority, assesses the property's value based on various factors, including location, size, zoning, potential uses, and comparable sales in the area.

2. Comparable Sales Approach:
This approach involves comparing the subject property to similar properties in the vicinity that have been sold recently. Adjustments are made for any differences between the subject property and the comparables to arrive at an estimated fair market value.

3. Income Approach:
If the property generates income, such as a rental property or a business location, the appraiser may use the income approach. This involves estimating the present value of the property's future income streams.

4. Cost Approach:
The cost approach determines value by estimating the cost to replace or reproduce the property, taking into account depreciation and obsolescence. This method is often used for unique or special-purpose properties.

5. Highest and Best Use:
The appraiser considers the property's highest and best use, which is the use that would result in the highest value for the property. This may involve considering potential future development or improvements that could enhance the property's value.

6. Expert Testimony:
At RHR, we regularly retain experts to help our clients determine the proper amount of just compensation that should be paid in connection with a property taking by a condemning authority. Both the condemning authority and the property owner may present expert testimony during legal proceedings to support their respective assessments of fair market value. The court may consider the testimony of appraisers, real estate experts, and other relevant witnesses.

It's important to note that property owners have the right to obtain their own appraisal and present evidence challenging the condemning authority's valuation. Our goal is to ensure that our clients receive just compensation for the taking of their property, and not a penny less.

Property owners facing condemnation in North Carolina are strongly encouraged to seek legal representation from an attorney experienced in eminent domain and condemnation law. The condemnation attorneys at RHR can help navigate the appraisal process, challenge unjust valuations, and advocate for fair compensation.

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