Section Six: Compensation Summary

  • Page 6: Compensation Summary The top portion of this page has a section for an explanation of Damages and/or Cost to Cure Estimates. According to
    The Dictionary of Real Estate Appraisal,
     “cost to cure” may be defined as “The cost to restore an item of deferred maintenance to new or reasonably new condition.” The Appraisal Institute,
    Real Estate Valuation in Litigation
     (1995 publication) defines cost to cure as the method “used in situations where a property has suffered a damage which can be physically and economically corrected, e.g., correction of drainage, replacement of fencing, reestablishment of physical access, and replacement of sewage or water systems. Under no circumstances, however, can the cost to cure measure of damage be applied if the cost to cure exceeds the diminution in value if such cure were not undertaken.” The appraiser should discuss the cost to cure analysis and its feasibility.
  • This section is the appropriate place for the appraiser to reference a technical expert’s report(s) relied upon to arrive at a cost to cure. The technical expert’s report(s) should be included in an addendum in or to the appraisal report.
    Care must be exercised to avoid any double compensation. An example would be the payment of a private water line or fence as an improvement and a “cost to cure” payment for replacing it (the double compensation would occur if the improvement’s depreciated value was not deducted from the cost of replacing it to determine its “net” cost to cure).
  • Compensation Summary: The bottom portion of this page is a summary of the compensation due the property owner because of the state’s acquisition. This table will show the value of the whole property, the value of the part to be acquired, the value of the remainder before the acquisition, the value of the remainder after the acquisition, and any damages or enhancements resulting from the acquisition. If it is necessary to include a separate cost to cure, the amount should be inserted below Net Damages or Enhancement. This item may be included in the Total Compensation. The total compensation shown on this page is the same as the compensation figure reflected on page 1.
  • Access Damages: The appraiser is to consider access damages in accordance with Texas Property Code Section 21.042(d) of the Texas Property Code and find as follows:
    1. Is there a denial of direct access on this parcel?
    2. If so, is the denial of direct access material?
    3. The lack of any access denial or the material impairment of direct access on or off the remaining property affects the market value of the remaining property in the sum of $XXX.