236.6 Appraisal and Appraisal Review

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Forms
Adjustment of Value or Just Compensation (Form 6.4.4)
Application for Employment as Contract Appraiser (Form 6.5.3)
Appraisal Review and Approval of Just Compensation (Form 6.4.3)
Assumptions and Limiting Conditions (Form 6.3.1A)
Certificate of Appraiser (Form 6.3.1B)
Comparable Lease (Form 6.3.5C)
Fee Appraiser Performance Evaluation (Form 6.5.13)
Nonresidential Sale (Form 6.3.5A)
Proposal for Appraisal Work (CCO RW16)
Realty Asset Estimate Greater Than $25,000 (Form 6.3.7C)
Realty Asset Estimate Less Than $25,000 (Form 6.3.7B)
Renewal Application for Employment as Contract Appraiser (Form 6.5.3a)
Residential Sale (Form 6.3.5B)
Right of Way Appraisal Agreement (CCO RW17)
Roster of Approved Contract Appraisers
Scope of Assignment (Form 6.2.2)
Standard Appraisal Format (Form 6.3.1)
Summary Value of Tenant Interests (Form 6.3.1C)
Uniform Residential Appraisal Report and Addendum (URAR) (Form 6.3.4)
Value Finding Appraisal Format (Form 6.3.2)
Value for Realty Asset Inventory (Form 6.3.7A)
Waiver Valuation - Payment Estimate (Form 6.3.3)

Contents

236.6.1 Overall Operating Policies

236.6.1.1 Appraisal Reports Required

It shall be the policy of The Missouri Department of Transportation (MoDOT) to secure at least one appraisal of each fee hold which is sought, or from which is sought certain realty rights having an estimated value that exceeds $10,000. Said appraisals shall be prepared on approved formats and comply with accepted appraisal practices.

Non-complex valuations of acquisitions of less than $10,000 shall be prepared on a Payment Estimate, (Form 236.6.3.3) or other Waiver Valuation document that has been approved by Right of Way Section, Waiver Valuations, including Payment Estimate are not considered an appraisal.

An exception to this policy shall include lands or rights owned by the United States of America or any other entity where the owners thereof are willing to donate necessary rights or parts thereof subsequent to being informed of MoDOT's policy with regard to appraisals and grantors' rights to receive just compensation.

District right of way management may assign additional appraisal reports by the same staff or fee appraiser that prepared an initial appraisal report (i.e. changed conditions, time, different format for condemnation, etc.) or assign an additional appraisal report to a different appraiser. Additional appraisal reports by two appraisers for the same time and conditions should only be assigned when the complexity of the acquisition already necessitates a Standard Format appraisal and should only be assigned under the most complex and high value situations. Complexity and relative high value varies by location, available data, unique nature or property type, extent of property impact, etc. A second appraisal of the same conditions and effective date might be considered when an initial appraisal submittal is found to be inadequate or inappropriate, as determined by district right of way management. Additional appraisal reports by the same or different appraiser may be considered prior to condemnation action, as determined by district right of way management.

A specialty appraisal shall be secured when affecting or acquiring all or a part of equipment, trade fixtures, or specialty items and the evaluation thereof is beyond the expertise of realty appraiser(s), as indicated by the Scope of Assignment, (Form 236.6.2.2).

A. Valuation Reports Provided to Owner and Tenant
MoDOT adopted policy January 1, 2004 to provide valuation reports to owners at the initiation of negotiation (EPG 236.7 Negotiation).
Chapter 523 RSMo requires "(1) Any condemning authority shall, at the time of the offer, provide the property owner with an appraisal or an explanation with supporting financial data for its determinations of the value of the property for purposes of the offer made in subsection 1 of this section. (2) Any appraisal referred to in this section shall be made by a state-licensed or state-certified appraiser using generally accepted appraisal practices."
The above licensing and certification requirement is satisfied by the co-signature of a certified person on Waiver Valuations and review by a certified person on value finding and standard appraisals.
B. Guidelines for Valuation Reports Provided to Owner and Tenant
  • Approved appraisal report or Payment Estimate/Waiver Valuations will be provided to owners, with all analysis and adjustment grids, exhibits, certificates, etc.
  • Reviewers should not remove any material, approach, conclusion, exhibit, etc. from reports without the cooperation and consent of the appraiser.
  • When a reviewer is required to reconcile between two MoDOT-authorized appraisals, district management shall make a determination of what report(s) and other supporting rationale are to be provided to the owner. Each report shall contain its own sale data, with only location, size, price and other comparative data being included.
  • If Sale Data Sheets are provided to owners, it will necessitate that the appraiser using the form will be fully responsible for the content of sale forms written by others.
  • Confidentially confirmed sale information cannot be included in appraisals provided to owners. If there is no substitute for the use of confidential information, the method of its use must be addressed by the district on a case-by-case basis. The information may only be useable as backup or support in the appraiser’s file, rather than in the report.
  • When tenant owned improvements, fixtures or personalty are acquired or affected by the acquisition, the district should prepare and provide a Summary Value of Tenant Interests (Form 236.6.3.1.C), to the tenant.
C. Review Forms to Right of Way Section
Copies of appraisals shall be maintained in the district according to document retention schedule and are not sent to Right of Way Section. A copy of Appraisal Review and Approval of Just Compensation (Form 236.6.4.3) and Adjustment Of Value Or Just Compensation (Form 236.6.4.4) shall continue to be sent to Right of Way Section.

236.6.1.2 Certification and Appraisal Assignment

All fee appraisal work performed for MoDOT for realty acquisition, shall be by contractual agreement with certified appraisers from the Roster of Approved Contract Appraisers.

Any right of way personnel that have a Residential or General Certification are authorized to prepare appraisal reports and Waiver Valuations. The district right of way manager may authorize non-certified senior, intermediate and right of way specialists to prepare and sign Waiver Valuations. The Right of Way Section may authorize non-certified senior, intermediate and right of way specialists to prepare and sign Value Finding, Standard Format and URAR appraisal reports.

Waiver valuations shall be prepared or cosigned by certified personnel. Value Finding, Standard Format and URAR appraisal reports prepared by non-certified personnel will be reviewed by, and just compensation approved by certified personnel.

236.6.1.3 Moonlighting

The practice of right of way personnel holding additional jobs in the real estate profession, such as sales, brokering, appraising, researching, or sale of realty information and escrowing realty accounts, is strictly prohibited. Refer to Personnel Policy 2514 Conflict of Interest.

236.6.1.4 Employment of Retirees

Human Resources, Personnel Policy Manual, Policy 0514, Employment of Retirees, governs contracting for appraisal or other realty and relocation services by retirees.

236.6.1.5 Separation of Functions

A. Valuation Limit
The same individual may value and negotiate for simple acquisitions with compensation of $10,000 or less (excluding fence), and valued by a Waiver Valuation. Valuation conclusions less than $10,000 and prepared on other than a Waiver Valuation (for complexity purposes) must be negotiated by personnel other than the valuer.
B. Relocation Restriction
An appraiser, having appraised a given parcel containing occupied improvements, may compile a rental subsidy study or replacement housing comparison record for that given property.

236.6.1.6 Use of Forms

The forms provided shall be used without alteration, to the extent practical. Since appraisals and Waiver Valuations may be provided to property owners, each report should contain all necessary supporting information to make the report complete and informative.

Use of alternative sale forms by fee appraisers is addressed in EPG 236.6.3.5.D.

236.6.1.7 Commission Member and Employee Property Valuation

See EPG 236.3.4.13.

236.6.2 Scope of Assignment

236.6.2.1 Scope of Assignment

49 CFR 24.103(s) requires minimum standards for appraisals consistent with established and commonly accepted appraisal practice, including all relevant and reliable approaches to value. These appraisal requirements accommodate an appraisal reporting level commensurate with complexity. Uniform Standards of Professional Appraisal Practice (USPAP), (see EPG 236.6.3.1.d.17), contains a “Scope of Work Rule”, which requires identification of the problem to be solved, determination and performance of the scope of work necessary to develop credible assignment results, and disclosure of the scope of work in the report. To fulfill the objectives of the CFR and USPAP, the Missouri Department of Transportation (MoDOT) has developed the Scope of Assignment process to assure appraisal reports meet reporting requirements, appraisal principles and standards, and provide a high quality appraisal document. The Scope of Assignment preparer must be familiar with the requirements of the various formats (see EPG 236.6.3).

All Scope of Assignment documents will be prepared by an individual familiar with all appraisal requirements for proper appraisal practice, approaches to value, rules and laws relevant to valuation for condemnation purposes, 49 CFR, USPAP, etc. The scope will identify the anticipated minimum requirements for an appraisal document to address all issues resulting from acquisition from a property. The Scope of Assignment preparer shall assign a level of documentation consistent with the complexity and anticipated value conclusion range of each acquisition. The assignment criteria must assure adequate documentation yet not assign or pay for more work than meets MoDOT’s needs.

The Scope of Assignment is a working document throughout the life of the appraisal work for a project, and only finalized when all assignments are complete. Attach an electronic copy of the finalized Scope of Assignment in the comments section of the right of way parcel acquisition project form, consistent with the documentation schedule.

The completed Scope of Assignment, whether a parcel listing of format assignments, an in-depth scope for each parcel, or a combination of both are to be dated and signed by the person who prepared the study. If the Scope of Assignment is prepared by someone other than the assistant right of way manager – certified, the assistant right of way manager or district right of way manager shall cosign those Scopes of Assignment prepared by other staff. The intent of the co-signature is to assure an adequate appraisal document has been required and the writer of the scope has required an adequate level of documentation.

The Right of Way Section and other assigned personnel will periodically perform quality assurance reviews to assure adequate appraisal documentation is required in the Scope of Assignment, in order to maintain the highest appraisal standards (See EPG 236.12 Quality Assurance Reviews).

236.6.2.2 Scope of Assignment Processes

Two Scope of Assignment processes are available. A Scope of Assignment may merely direct an appraiser experienced with MoDOT formats and their instructions, what format to use along with any special instructions. Otherwise, a more detailed Scope of Assignment shall be used for staff or fee appraisers less experienced with MoDOT formats, when fee appraisers will be competitively bidding, or when the appraisal assignment is so complex as to necessitate an in-depth Scope of Assignment.

A. Scope of Assignment for Simple Assignment or Experienced Staff and Fee

MoDOT has established detailed instructions and formats that fulfill its appraisal needs. Through training and repetitive similar work assignments, staff and fee appraisers become familiar with the detailed instructions and their associated formats. Therefore, for experienced staff and fee appraisers, the Scope of Assignment preparer may merely reference the format required and any other special instructions or approaches to value. Even this abbreviated Scope of Assignment will follow the principles of a Scope of Assignment as set out for inexperienced staff or fee, below.

B. Comprehensive Scope of Assignment for Complex Assignment or Inexperienced Staff and Fee

A comprehensive Scope of Assignment shall indicate the following for each parcel, when applicable:

1. Total land area, proposed acquisition area, temporary and permanent easement, etc.
2. A brief but comprehensive description of land and improvements.
3. The manner in which proposed highway improvement might affect remaining real property.
4. Identify and explain all observed elements of loss or damage.
5. Identify curable losses, if any are observed.
6. Under all appraisal formats the value estimates must include all fee owned and tenant owned improvements, both affected and unaffected. The scope may authorize the appraiser to estimate the contributory value of unaffected improvements.
7. A statement from Commission's counsel with regard to special benefits when it is anticipated that such benefits may accrue to a remaining fee hold.
8. An in-depth explanation of those appraisal problems that warrant two appraisals on the same parcel.
9. A comprehensive Scope of Assignment shall indicate what evidence is required to support depreciation rates for affected improvements when a cost approach is specified. If primary reliance is likely to be placed on the cost approach a higher standard of support for the depreciation estimate should be required.
10. A comprehensive Scope of Assignment shall indicate if specialty appraisals to evaluate affected machinery, specialty items, trade fixtures, etc. are required. Also, if MoDOT or the fee appraiser is responsible for obtaining said appraisal and which party is responsible for the cost of specialty appraisals.
11. A comprehensive Scope of Assignment shall indicate a suggestion or requirement to engage a contractor to furnish cost to cure estimates for rehabilitating remainder buildings, correcting or revising affected sewer systems, water lines, fence, etc., and if MoDOT or the fee appraiser is responsible for obtaining and the cost of the contractor’s services.
12. Approaches to Value
The sales comparison approach often develops the most credible indication of value. In most situations this may be the only approach necessary to estimate just compensation. The cost less depreciation approach is best applied to newer, special use, or unique improvements not normally transferring in the market place. An income approach may be implemented when appropriate.
The Scope of Assignment shall indicate the recommended approach or approaches to value "before" as well as "after" when applicable.
The sales comparison approach shall be shown for parcels where appraiser relies upon vacant land sales and may estimate contributory value of unaffected improvements.

236.6.3 Valuation Formats and Instructions

236.6.3.1 Standard Appraisal Format

Use of the Standard Appraisal Format (Form 236.6.3.1) is required when:

  • the appraisal problems are judged complex
  • the highest and best use of a property as improved is different than the highest and best use as if vacant
  • residential or other major improvements are acquired, unless use of the URAR appraisal is specified.
  • there is a change in the highest and best use after the acquisition.

The appraiser shall adhere to the following format and shall include paragraph headings and numbers as shown. The appraisal shall be typewritten on 8 1/2" x 11" paper with the pages numbered sequentially.

These format instructions set out appraisal requirements of the Missouri Department of Transportation (MoDOT) and the Federal Highway Administration (FHWA). It is inevitable that appraisers will occasionally encounter situations that are not specifically addressed herein. In all cases the appraiser is responsible for a credible, adequately documented appraisal. Reasonableness and typical professional appraisal practices are the standard.

There are a number of ownership items and appraisal problems frequently encountered in valuing acquisitions for transportation purposes, on which policies have been established by case law, management decision and precedent. These policies apply to all appraisal formats and are described in EPG 236.6.3.1.D, Other Appraisal Considerations.


A standardized identification block (see example at right) shall be included at the front of the appraisal, without deviation.


Reporting the effective date of appraisal and date of report are required by Code of Federal Regulations (CFR) and Uniform Standards of Professional Appraisal Practice (USPAP). The effective date of appraisal establishes the context for the value opinion, generally the date of last inspection. For condemnation appraisal reports, the effective date will be the date the commissioners’ award is paid into court. The report date with the signature on the certificate should normally be the date the appraisal is complete or turned in for review.

1. Owner and Tenant Owner
Identify owner and tenant owner by address, phone number, etc.
2. Purpose of Appraisal
The purpose of this appraisal is to estimate just compensation due the owners as a result of acquiring land and realty rights as herein described.
Fair Market Value Definition: Fair market value is the value of the property taken after considering comparable sales in the area, capitalization of income, and replacement cost less depreciation, singularly or in combination, as appropriate, and additionally considering the value of the property based upon its highest and best use, using generally accepted appraisal practices. If less than the entire property is taken, fair market value shall mean the difference between the fair market value of the entire property immediately prior to the taking and the fair market value of the remaining or burdened property immediately after the taking. See RSMo 523.001.
Do not use definitions from various appraisal organizations and sources. Failure to use the above definitions can result in having the testimony of a witness stricken.
Intended Use: The intended use of the appraisal report is to assist MoDOT establish of the amount of compensation to pay for the land and property rights to be acquired.
Intended Users: Intended users of this report are the Missouri Highways and Transportation Commission (the client), the MoDOT, the FHWA and the United States Department of Transportation and persons authorized by the client. Although the MoDOT authorizes a copy of this appraisal report be provided to the owner of the subject property for information only, the owner is not an intended user as defined by USPAP.
Uniform Standards of Professional Appraisal Practice (USPAP): The appraiser shall include the following statement in the appraisal report:
USPAP Compliance Statement: This appraisal was prepared according to the contract/assignment from the MoDOT. The intended use of the appraisal is for eminent domain related acquisition and MoDOT is the only intended user (except as indicated above). MoDOT bears responsibility for contract/assignment requirements that meet it’s needs and therefore are not misleading. In combination with the Scope of Assignment and review function, all appraisal reports assigned by MoDOT identify the problem to be solved, determine the scope of work necessary to solve the problem and correctly complete research and analysis necessary to produce a credible appraisal, and are therefore in compliance with USPAP Standard 1. In that MoDOT is an intended user of the report and others may be provided copies for informational purposes, the agency has determined that reports prepared in conformance with these procedures constitute a Summary Appraisal Report, which fulfills MoDOT’s needs. Any inconsistencies with USPAP are covered by the USPAP Jurisdictional Exception provision.
3. Interest Appraised
The interest appraised will normally be fee simple interest. If the ownership is encumbered with a lease, the value conclusion may be a leased fee estate. Easement encumbrances impacting market value shall be identified.
4. Scope of Work
Reference the information researched and the analysis applied in an assignment. Appraisers have a responsibility in determining the appropriate scope of work for an appraisal assignment. Credible assignment results require support by relevant evidence and logic. Scope of Work includes, but is not limited to:
  • The extent to which the property and comparable sales were inspected
  • The extent of data research
  • The extent of analysis applied to arrive at opinions or conclusions.
The Scope of Work is supplemented by the Scope of Assignment (Form 236.6.2.2), a document prepared by individuals other than the appraiser, and setting out the minimum reporting requirements of the appraisal.
5. Identification of the Property
The real estate involved in the appraisal can be specified by a property description, address, map reference, copy of a survey or map, property sketch and/or photographs or the similar information. Lengthy property descriptions should not be reiterated within the report, but rather copies of the title report or last deed of record should be reviewed by the appraiser and retained in the appraiser’s work file.
6. History of the Property
The appraisal report must state the history of the property and cannot merely say, "No transfers" or "none". Indicate all transfers of subject realty for the five years immediately preceding the date of the appraisal. Show the parties to the transactions, dates of transactions, books and pages, instrument numbers and verified sale prices when possible to obtain. If sales of the subject are comparable sales in the report, reference to them will satisfy the requirement of this section. Include details of any current sale agreement, option or listing of the subject property if such information is available to the appraiser in the normal course of business. If the information cannot be determined, the report should state the reasons. If the report states there has been no sale, contract, option, or listing, it must also state how that determination was made.
Good appraisal practice dictates that appraisers consider and analyze recent sales, contracts, options or listings of the property being appraised. If, in the appraiser’s opinion, any of the above does not reflect current value of the property, the appraiser must provide reason. The phrase "not an arms length transaction" is not adequate without explanation.
7. Description of Property Before Acquisition
A. Zoning:
The applicable code and category of zoning should be stated (for example, R-1 (the code), Single-Family District (the category)). Special zoning provisions or restrictions should be noted, such as minimum lot size or number of developed units allowed. The report should state whether the subject property is in conformance with the zoning code.
If the subject is non-conforming, the highest and best use and value analysis sections of the report must deal with any effect of the non-conformity upon use and value. Probability of zoning change should be addressed in the highest and best use analysis.
  • Code
  • Category
  • Compliance
  • None
B. Land:
Site description should include dimensions, shape, size and frontage as appropriate. Describe the topography, roads or streets and frontages, legal access rights and physical entrances, and all non-structural site improvements including but not limited to paving, curbing, retaining walls, landscaping, ponds and terracing.
If agricultural land, information on soil types and productivity, percent cleared and timbered, and historic uses such as cropland and pasture land may be appropriate.
Information should be included on encumbrances, recorded or unrecorded, such as deed restrictions, limitation of access, utility easements, flowage or drainage easements, etc. which may affect market value.
  • Access Before Acquisition: The report shall discuss the available legal and physical access of the subject property as well as the comparable sales. Legal access represents a deeded or permitted access point to a property. Physical access merely reflects the presence of existing entrances, which may or may not be legal.
  • Utilities In Use Before Acquisition:
  • Utilities Available Before Acquisition: Identify what utilities are in use, whether public or private, and what utilities are reasonably available to the property.
C. Fee Owned Improvements, Fixtures and Personalty:
These items shall be inspected, identified and described in sufficient detail to indicate their uses, quality, condition and location upon the premises.
The description of affected improvements shall include such items as significant deferred maintenance, recent renovation and a statement of actual and effective age.
Unaffected improvements shall be inspected to the extent that they can be adequately described. If directed in the Scope of Assignment, the appraiser may estimate the contributory value of unaffected improvements without support.
The appraiser shall identify and value personal property, trade fixtures, or intangible items that are not real property but are impacted by the acquisition and are included in the valuation. When there are items such as appliances, fireplace inserts, equipment, on-premise signs, mobile homes, etc., which could be realty or personalty, the report shall identify them and state whether they are considered personalty or realty. See EPG 236.6.3.1.D.12 for instructions on personalty and fixtures.
When appropriate the impact of Title III of the Americans With Disabilities Act of 1990 as outlined in EPG 236.6.3.1.D.1, Other Appraisal Considerations should be addressed.
D. Tenant Owned Improvements, Fixtures and Personalty:
All buildings, structures or other improvements, except outdoor advertising structures, which are a part of the realty and owned by someone other than the fee holder shall be valued as such items contribute to the fee or valued for removal (salvage), whichever is greater.
The report shall identify the terms of the lease and describe buildings, structures or other improvements owned by someone other than the fee holder, which the tenant has the right or obligation to remove at the expiration of the lease term.
All tenant owned improvements including outdoor advertising structures shall be identified and described as separate assets from that of the fee holder. Follow instructions for describing improvements in Paragraph 7C of this section. See EPG 236.6.3.1.D.12 for instructions on personalty and fixtures.
When appropriate the impact of Title III of the Americans With Disabilities Act of 1990 as outlined in EPG 236.6.3.1.D, Other Appraisal Considerations should be addressed.
E. Other Appraisal Considerations:
Methods and directions for addressing other property elements are set out in EPG 236.6.3.1.D.
8. Highest and Best Use Analysis Before Acquisition
The appraiser shall analyze the highest and best use before acquisition to the extent commensurate with the appraisal problem. Estimation of market value requires consideration of the highest and best use or uses for which the property is suited. Conclusion of highest and best use of vacant land should be consistent with zoning or evidence shall be included supporting the probability of zoning change. If the subject property is unzoned vacant land, highest and best use should be consistent with surrounding land use and area trends or evidence supporting the different use shall be offered. If the highest and best use is the existing use as improved, reasons supporting this conclusion should be explained. If the highest and best use is different from the current use as improved and particularly if other than allowed by current zoning, this conclusion should be supported by market evidence and analysis showing that this use is financially feasible, physically possible, and that there is a high probability of obtaining the necessary zoning. An unsupported statement of conclusion will not meet the requirement for highest and best use analysis in the Standard Format.
A.Valuation of Properties with Multiple Highest and Best Uses:
Properties with the potential for multiple highest and best uses may be valued from comparable sales with like potential or as an alternative, the appraiser may value each use area by data comparable to each specific use to reach a value conclusion. Should an appraiser pursue the latter method of evaluation three sales comparable to each specific use area must be included and analyzed in the sales comparison approach, appropriate cost and income data for each use area shall be included if these approaches are utilized, and it must be shown that the owner may convey each specific use area without affecting the value of the remaining area(s).
B.Valuation of Improvements That Do Not Represent the Highest and Best Use of the Property:
If improvements do not represent the highest and best use of the property they may have interim use value, depreciated in place value, salvage value (value of salvage exceeds cost of removal), no value (removal cost equals salvage value) or negative value (removal cost exceeds salvage value). The analysis should be clear as to which valuation premise is being used. Compensation for improvements, like fence, that may not contribute to the fulfillment of the highest and best use may be considered when the property was previously fenced and the owner utilizes the property for livestock confinement.
If a salvage value is included in Paragraph 18 (Salvage Value), the before value of that improvement must be at least equal to that salvage value.
9. Valuation Before Acquisition
Required Approaches:
Appraisers shall as a minimum complete the approach or approaches to value as specified within the body of the appraisal agreement and/or elements of the Scope of Assignment. If the appraiser determines the appraisal problem is more or less complex than reflected in the Scope of Assignment, it is the appraiser’s responsibility to communicate the necessity to amend the Scope of Assignment, which may necessitate renegotiation of the agreement.
Each required approach to value, both before and after when applicable, shall be compiled in accordance with accepted appraisal principles and techniques, with appropriate specifications contained in these instructions and in compliance with 23 CFR – Highways and 49 CFR – Transportation.
Sales of the subject within the past 5 years and current Agreements of Sale, options and listings of the subject property shall be considered and analyzed. In some cases, sales of the subject over 5 years old may still be relevant.
Sales Data and Other Market Support:
Each appraisal report prepared on the Standard Appraisal Format shall contain sufficient documentation, including valuation data and the appraiser's analysis of that data, to support the opinion of value.
Appraisers shall incorporate within the appraisal reports adequate sales and other supporting data to relay the necessary comparative information using Comparable Sale Forms 236.6.3.5.A and EPG 236.6.3.5B.
The report shall contain a sales map in sufficient detail to allow the reader to drive to each sale.
A. Sales Comparison Approach Before Acquisition:
When a sales comparison approach is applicable, an appraiser must analyze such comparable sales data as are available to indicate a value conclusion.
A comparable sale may be considered as follows:
  • a real property transferring on the open market within approximately 5 years of the date of appraisal in which the sale is referenced as a basis for conclusion of value,
  • a sold property which is similar and/or suitable for comparison with realty being appraised with regard to land area, shape, location, topography, utilities, improvements when applicable, potential highest and best use(s) and any other sufficiently similar qualities which may enable an informed person to arrive at a reasonable estimate or conclusion of value.
  • Pending contracts should be considered but not relied upon.
  • Contract for Deed may be used, however, if the contract is not recorded, a copy of the contract must be part of the appraiser’s file.
Comparable sale data shall be reported in each applicable portion of Sale Form 236.6.3.5.A or Form 236.6.3.5.B.
A minimum of three comparable sales is required as a basis for an evaluation by the sales comparison approach in the Standard Format, unless a different number is authorized in the Scope of Assignment. An arms-length sale of the subject property may be considered a comparable sale provided the transfer occurred within approximately 5 years of the date of appraisal. Adjustments for changes in market conditions and/or improvements may be necessary to align sale price with current value.
Each comparable sale shall be compared with the appraised realty and adjustments implemented for each significant element of difference affecting value. An explanation shall be offered for each individual adjustment. Differences may be measured by either dollars or percentage. A lump-sum adjustment for more than one difference is not acceptable.
The appraisal report shall contain sufficient sales data or other factual data and analyses of such data as to lend credible support to an opinion of each adjustment or value differential applied to the comparable sale. The only exception to this policy shall apply when such supportive data cannot be abstracted by sales analyses and the appraiser so states. Comments regarding adjustments abstracted from or based upon sale analyses shall include reference to the section or page number of the report where the abstraction is explained. Comments sufficient to explain the appraiser's rationale and reasoning shall be offered for each adjustment which could not be supported by sales, sales analyses or other factual data.
Comparable sales used as a basis for evaluating unimproved land must be either unimproved or all improvements totally and completely depreciated and offering no contributory value at date of sale. The procedure of abstracting estimated contributory value of improvements from selling price to arrive at residual value for unimproved land shall not be considered credible sale evidence or a basis for valuing unimproved realty.
Use of sales that have improvements located on them as vacant land sales, when it has been confirmed that those improvements did not contribute to value, is acceptable provided that during the course of time that the sale is being relied upon, those improvements have not been rehabilitated for renewed use. Once it becomes apparent that an improvement, formerly concluded to have no contributory value, has been put back into productive use, a sale written to the contrary has lost much of its credibility and is not to be used as a comparable for land valuation.
Each sale shall be analyzed to yield a value indication for the subject. These value indications shall be reconciled to a value conclusion by the sales comparison approach. A final conclusion of value differing from the range indicated by the comparable sales must be explained in depth.
Before Value by Sales Comparison Approach: $_______________
B. Cost Approach Before Acquisition:
When a cost approach is applicable, an appraiser must:
  • develop an opinion of site value by an appropriate appraisal method or technique
  • analyze such comparable cost data as are available to estimate the cost new of the improvements
  • analyze such comparable data as are available to estimate the difference between the cost new and the present worth of the improvements (accrued depreciation)
When utilizing the cost approach the appraiser shall offer a minimum of three unimproved land sales to serve as a basis for evaluating unimproved land, unless a different number is authorized in the Scope of Assignment. Each land sale must meet the criteria as prescribed for comparable sales in Paragraph 9A of this Section.
The appraiser shall compare each individual comparable land sale with the subject property. Adjustments to each comparable sale shall be in accordance with specifications set forth in Paragraph 9A of this section.
Improvement Costs: All elements recited in the cost approach must be substantiated by reference to specific sections of acceptable cost manuals, contractor's estimates, manufacturer's or dealer's cost data or by other appropriate sources. The appraiser may determine the value of nominal or unique elements in the cost approach with the best available method, with the requirement for support relative to the value conclusion.
The use of either replacement or reproduction cost is acceptable if the following two definitions are properly applied:
Replacement cost is the estimated cost to construct at current prices a building with utility equivalent to the building being appraised, using modern materials and current standards, design and layout.
Reproduction cost is the estimated cost to construct at current prices an exact duplicate or replica of the building being appraised using the same materials, construction standards, design, layout and quality of workmanship, and embodying all of its deficiencies, superadequacies and obsolescence.
Depreciation of Improvements: When completing the cost approach, the appraiser shall determine from market data or by the age/life method the applicable rate of depreciation for residential units, commercial buildings and other principal capital improvements. Improvements of a minor nature may be depreciated based on observed condition. Depreciation rates for mechanical appurtenances and/or trade fixtures may be estimated from age/life data furnished by the manufacturer or supplier, or from accepted cost manuals.
Before Value by Cost Approach: $____________
C. Income Approach Before Acquisition:
When an income approach is applicable, an appraiser must:
  • analyze such comparable rental data as are available and/or the potential earnings capacity of the property to estimate the gross income potential of the property;
  • analyze such comparable operating expense data as are available to estimate the operating expenses of the property;
  • analyze such comparable data as are available to estimate rates of capitalization and/or rates of discount; and
  • base projections of future rent and/or income potential and expenses on reasonably clear and appropriate evidence.
The appraiser shall, when implementing an income approach to value, develop an overall capitalization rate from sales of comparable realty investments, band of investment or other accepted method. Discounting to present value of some income streams may be an acceptable technique. The appraiser shall also offer evidence supporting income and expense estimates.
Before Value by Income Approach: $_______________
10. Reconciliation of Value Before Acquisition:
If more than one approach to value is used, the appraiser shall correlate the resultant value estimates and explain the rationale for deciding which approach and data provide the best support for the conclusion of value before acquisition.
Total Value Before Acquisition: $_______________
11. Description of Property After Acquisition
The appraiser shall describe the remaining realty to the extent necessary to provide a word picture of the after condition. If the remainder is substantially changed from the before condition the appraiser shall describe the remainder as if the before condition never existed. Partial acquisitions of a minor nature may best be described by discussing changes caused by the acquisition rather than repeating the contents of Paragraph 7 of this section.
  • Impact on Zoning: Describe impact on zoning.
  • Access After Acquisition: The report shall discuss the available legal and physical access of the subject property as well as the comparable sales. The report must address if the legally provided access points are comparable to the physical access available to the property before the acquisition in regard to topography, timber, etc. See EPG 236.6.3.6 for applicable laws and definitions regarding access.
  • Impact on Utilities: A statement is required regarding the impact, if any, on all public and private utility services which the property has in use or available in the before condition. Special considerations apply when it is necessary to to adjust the property owner’s service lines located on existing right of way. The cost to move and reconnect service lines that lie within the existing right is not compensable to the owner if such reconnection is included in the construction contract. See EPG 643.2.1.6 Service Lines Owned by Property Owners.
  • Utilities In Use After Acquisition:
  • Utilities Available After Acquisition:
Other Appraisal Considerations:
Methods and directions for addressing other property elements are described in EPG 236.6.3.1.D.
12. Highest and Best Use Analysis After Acquisition
The report may indicate that the highest and best use of the remaining realty is unchanged and an explanation supporting such a conclusion is required. Should the acquisition cause a change in highest and best use or uses, the appraiser shall analyze the new highest and best use in depth commensurate with the appraisal problem.
Loss of access, loss of traffic, circuity of travel, placement of a median barrier, loss of visibility, loss of privacy, loss of security, etc., are to be considered elements by the appraiser in formulating an opinion of the highest and best use of the property in the after condition. If the appraiser determines there is no diminution in highest and best use of the property, even though these elements are present, the appraisal report is to include an explanation supporting such a conclusion.
The change(s) caused by the property acquisition may make it necessary for the appraiser to utilize new comparable sales data. Special Benefits reflected in a report must be supported by written concurrence from Commission's Counsel and addressed in the Scope of Work of the report if special benefits are recognized subsequent to the initial Scope of Assignment.
13. Valuation After Acquisition
The analyses and valuation sections relating to the remainder property constitute a new appraisal. In cases of an insignificant acquisition, the remainder may be so similar to the whole property before the acquisition that the same highest and best use analysis and the same cost, market, and income data and analysis will remain applicable and can therefore be referenced and employed in analyzing and valuing the remainder property. However, a change in the basic physical or economic character of the remainder may result in a change in the remainder’s highest and best use or the intensity of that use and may result in damages or benefits to the remainder property which will require different market data and/ or analysis than that which was used in the whole property valuation.
Follow instruction as shown in Paragraph 9 of this section as well as EPG 236.6.3.1.D.
A. Sales Comparison Approach After Acquisition:
Follow Instructions as shown in Paragraph 9A above.
After Value by Sales Comparison Approach: $_______________
B. Cost Approach After Acquisition:
Follow Instructions as shown in Paragraph 9B above.
After Value by Cost Approach: $________________
C. Income Approach After Acquisition:
Follow Instructions as shown in Paragraph 9C above.
After Value by Income Approach: $_______________
14. Reconciliation of Value After Acquisition
If more than one approach to value is used, the appraiser shall correlate the resultant value estimates and explain the rationale for deciding which approach and data provide the best support for the conclusion of estimated value after acquisition.
Total Value After Acquisition: $_______________
15. Estimate of Total Just Compensation
Total Just Compensation is computed by subtracting the estimated value after the acquisition from the estimated value before the acquisition.
Estimated Value Before Acquisition $_______________
Estimated Value After Acquisition $_______________
Indicated Just Compensation Due to Acquisition $_______________
16. Allocation of Just Compensation
The appraiser shall offer an opinion of reasonable allocation of the estimate of just compensation between realty acquired and damages to the remainder for .the interests of both fee holders and tenants who own improvements, fixtures or personalty included in the value.
A. Allocation of the Fee Holder’s Interest:
1. Land Acquired: $ ______________
Report the calculated value of the land acquired.
2. Improvements, Fixtures and Personalty: $_________________
3. Total Land and Improvements, Fixtures and Personalty: $_________________
4. Damages to the Remainder: $_________________
Damages to the remainder including permanent and temporary easements shall be identified and individually valued, and their values combined to a total. Losses caused by temporary borrow pits must be set apart from other damages. Fencing required as a cost to cure due to road realignment, temporary fencing etc. shall be included as a damage to the remainder. See additional discussion on Damages in EPG 236.6.3.1D.
5. Total Just Compensation Due Fee Holder: $________________
B. Allocation of the Tenant Owner’s Interest:
1. Tenant Owned Improvements, Fixtures and Personalty:
Item _________________ $_________________
Item _________________ $_________________
Identify each tenant owned improvement within the new acquisition and/or easement area and estimate its value. Use the greater of its contributory value or value for removal (salvage value).
2. Damage to Tenant Owned Improvements, Fixtures and Personalty:
Item _________________ $_________________
Item _________________ $_________________
Identify and show a value loss, if any, for each damaged tenant owned improvement lying outside the acquired area.
3. Leasehold Interest: $_________________
Calculate value of leasehold interest, if any, should the lease be affected by the acquisition.
4. Total Just Compensation Due Tenant Owner: $________________
17. Uneconomic Remnant
"The term uneconomic remnant means a parcel of real property in which the owner is left with an interest after a partial acquisition of the owner's property, and which the acquiring agency has determined has little or no value or utility to the owner." (see 49 CFR Section 24.2 (27) and EPG 236.5.9.1 Definition (in 236.5 Property Management). When the appraiser is of the opinion that an uneconomic remnant does not exist, enter the word "none" in this paragraph. When the appraiser is of the opinion that an uneconomic remnant has been created by the acquisition, an explanation is required. The appraiser shall describe elements that contribute to a parcel having some characteristics of an uneconomic remnant, yet conclude that the parcel is not an uneconomic remnant. A separate area and value should be shown for multiple uneconomic remnant areas.
Area __________________ @ $ __________ = $ ________________
18. Salvage Value
"The term salvage value means the probable sale price of an item offered for sale to knowledgeable buyers with the requirement that it be removed from the property at a buyer’s expense (i.e., not eligible for relocation assistance). This includes items for re-use as well as items with components that can be reused or recycled when there is no reasonable prospect for sale except on this basis."
Each acquired improvement enumerated above shall be additionally identified under salvage and a salvage value determined or zero indicated. Salvage values should not be assigned to very low value items such as farm fencing. If an improvement has salvage value, the before value of such improvement must be at least equal to the salvage value.
Allocate salvage values between fee and tenant improvements, fixtures and personalty.
Improvement ______________ Salvage Value $_________________
Improvement ______________ Salvage Value $_________________
Total Salvage Value ______________ $_________________
19. Required Attachments
Assumptions and Limiting Conditions: The appraiser shall use the standard Assumptions and Limiting Conditions (Form 236.6.3.1.A). If additional contingencies or limiting conditions apply, they shall be stated here. Unauthorized hypothetical conditions, assumptions, or limiting conditions may result in disapproval of the appraisal report.
Certificate of Appraiser: A properly completed and signed copy of Certificate of Appraiser (Form 236.6.3.1.B) shall be attached to the appraisal report.
Site Plan: The appraiser must provide a site plan showing all property boundaries and the location of major and affected improvements. An annotated copy of an assessor’s aerial map, a survey, an aerial photo, a cut of the highway plan can meet this requirement if it shows the whole property and all improvements, or a drawing. If other than the plan cut is used to meet this requirement the site plan should show the proposed boundary line and easements, and the areas of the acquisition and remainder. Greater detail and a higher degree of accuracy is required on small parcels or where improvements are very near and possibly affected by the acquisition than on large parcels where improvements may be important to the value estimate but are not affected by the acquisition.
Photographs: The appraiser shall attach identified color photographs of the appraised property showing all improvements and features affecting the value. Photographs should show details important to the valuation of major and/or affected improvements. Photographs should also show the area of acquisitions including easement areas and their relationships to affected improvements.
Floor Plans of Acquired Residential Units And Structures with Internal Walls: A floor plan drawing is required when:
  • a residential unit is acquired, to aid in the determination of relocation requirements and benefits.
  • demolition will be required on structures with interior walls.
Comparable Sale Map: The report shall contain a sales map in sufficient detail to allow the reader to drive to each sale.
Sale Data Forms: Data books may be utilized in each appraiser’s practice but shall not be submitted to division or referenced in reports. Each appraisal report prepared on the Standard Appraisal Format shall contain sufficient documentation, including valuation data and the appraiser's analysis of that data, to support the opinion of value.
Appraisers shall incorporate within the appraisal reports adequate sales and other supporting data to relay the necessary comparative information. Sale data sheets, Forms 236.6.3.5 A and B utilized in the valuation shall be attached to each report. The entirety of information obtained on each sale transaction may exceed the need for each individual report, like income data, etc. Individuals may develop abbreviated sale data sheets that contain only the information necessary for comparison to the subject valuation, with other data retained in the appraiser’s work file.
Optional Attachments
  • Cover letters
  • Tables of Contents
  • Appraiser Qualifications
  • Engagement Letter or Notice to Proceed
  • Legal Instructions, if any shall be retained in the appraiser’s work file and not attached to valuation reports.
A. Assumptions and Limiting Conditions
Assumptions and Limiting Conditions (Form 236.6.3.1.A) shall be attached to each Standard Format and Value Finding appraisal, and other valuations where it is deemed appropriate.
B. Certificate of Appraiser
Certificate of Appraiser (Form 236.6.3.1.B) shall be attached to each Standard Format and Value Finding appraisal, and other valuations where it is deemed appropriate. The Certificate of Appraiser is not used on Waiver Valuations.
C. Tenant Summary
Summary Value of Tenant Interests, Form 236.6.3.1.C, shall be prepared and provided to tenant owners of improvements and interests affected by an acquisition. Form 236.6.3.1.C is a summary of tenant information and valuations included in the valuation of the parent property, but is not to be attached to the appraisal or valuation documents provided to the fee owner.
D. Other Appraisal Considerations
The following elements shall be considered and addressed in the appropriate paragraphs of all valuations.
1. Americans With Disabilities Act of 1990
The intent of this section for the appraiser is to emphasize the importance of the impact of the ADA on real estate valuation. Appraisers must be aware of differences in apparently comparable improved properties due to ADA. It is not intended that appraisers unduly seek out ADA deficiencies in affected and acquired improvements.
The appraiser should be aware of the requirements of Title III of the Americans With Disabilities Act of 1990 and consider its effect on the value of the appraised property. The Act applies to any public accommodation, commercial facility, or private entity that offers examinations or courses related to applications, licensing, certification or credentialing for secondary or post-secondary education, professional or trade purposes. When a public accommodation is located in a private residence that part used for public accommodation is covered by this act, including those elements used to enter the place of public accommodation.
The Act requires removal of architectural barriers and communication barriers that are structural in nature in existing facilities, where such removal is readily achievable, i.e., easily accomplished and able to be carried out without much difficulty or expense. Whether a measure is readily achievable is determined on a case-by-case basis, however, the obligation to remove barriers is a continuing one. What was not readily achievable in the past may become achievable in the future and the Act envisions a gradual removal of barriers and suggests priorities for their removal.
All new improvements after January 26, 1993 must be designed and constructed to be readily accessible and usable by individuals with disabilities. Alterations to existing facilities after January 26, 1993 must to the maximum extent feasible ensure that the altered portions of the facility are readily accessible. When undertaking a cost to cure as part of the damages caused by a property acquisition, the appraiser will have to consider how the acquisition affects accessibility as well as whether the improvement was or should have been in compliance prior to the acquisition.
Subject property shall be inspected on the date of valuation for its compliance or non-compliance with ADA regulations. All comparable sales used in the valuation process should be analyzed as to their compliance or non-compliance to ADA regulations as of the date of sale. If subject property is currently in non-compliance with ADA regulations the appraiser should use similar comparable sales, which are in non-compliance for comparison purposes. It shall be the appraiser's responsibility to estimate the current market value of subject property as it now exists taking into consideration all of its compliance or non-compliance of ADA regulations and making adjustments for either situation. Curing damage to the remainder could trigger requirements of ADA. This must be considered in any after value analysis.
2. Billboard Valuation
For further information on the acquisition of billboards, see EPG 236.16.9 Sign Structures/Junkyards Affected by Highway Projects. The following definitions are for valuation purposes and are linked to locations where other definitions of the subject are available for different purposes.
A. Definitions:
Billboard: An outdoor advertising structure that is described within the outdoor advertising industry as a flat surface (panel, wall, or fence, etc.) on which bills are posted. Specifically, a large panel designed to carry outdoor advertising intended or used to advertise or inform of activities conducted away from the premises or services and/or products provided somewhere other than the premises where the structure is located. It advertises an establishment, merchandise, service or entertainment that is not sold, produced, manufactured or furnished at the property on which it is located.
Billboards along with their supporting structures are considered realty. Billboards should not be confused in the appraisal process with on-premise signs.
Although billboards are the dominant form of outdoor advertising, other forms such as an outdoor sign, display, device, figure, painting, drawing, message, plaque, or poster may also be considered as outdoor advertising. The valuation of these other forms of outdoor advertising should follow the procedures stated herein.
For purposes of valuation, the terms billboard and outdoor advertising structure are used interchangeably. Outdoor advertising is defined at 226.510 RSMo.
On-premise Sign: An on-premise sign advertises activities, services and/or products offered by the establishment on the premises that it is located. On-premise signs may be realty or personalty. On-premise sign is defined at 7-CSR 10-6.015(25).
Status of Billboard Structures: The status of billboard structures is conforming, conforming out of standard, nonconforming or illegal.
  • Conforming Billboard Structures comply with all current billboard regulations.
  • Nonconforming Billboard Structures do not comply with all current billboard regulations, but did comply at one time, have a permit, and may remain in place until destroyed. Nonconforming is defined at 7 CSR 10-6.015(24).
  • Illegal Billboards Structures may have a permit, but are damaged, do not comply with current statutes, or have other legal limitations.
Status of Billboard Sites: The status of improved billboard sites is either legal or illegal. The status of a permitted but unimproved site will always be legal.
  • Legal Billboard Site is a location on a property that has attained the legal status for construction of a billboard, including the presence of a qualifying commercial enterprise and spacing from other permitted locations. The Outdoor Advertising Specialist can identify current status and spacing requirements. (See Status below.) If zoned, the zoning must accommodate billboards.
  • Illegal Billboard Site will generally be associated with a structure that has been erected without a permit, or it is in conflict with a permit regarding location or other issues.
Eliminated Billboard Site: If an improved billboard site is within the proposed acquisition area, or otherwise impacted by a project, the site shall be considered eliminated if there is inadequate remaining size, if the qualifying commercial enterprise has been eliminated, adequate spacing is not available, local requirements, or other reasons identified by the appraiser. Limitation of access may impact legal billboard sites.
B. Property Description:
The description of billboards shall include size, structural components, lighting, condition, maintenance, recent renovation and a statement of actual and effective age. All tenant owned billboards shall be identified and described as separate assets from that of the fee holder. Regardless of impact by the acquisition, billboard structures shall be inspected to the extent that they can be adequately described and that valuation may be accomplished if acquired, or a contributory value may be estimated if unaffected by the acquisition.
For valuation purposes, the size of a billboard site may not need to be identified, as long as the billboard use does not diminish other uses on the land, or other uses on the land do not diminish the additional contributory value as a billboard site or structure.
The billboard site and each component of the outdoor advertising structure may be under different ownerships. The status of each billboard site and structure, affected by the acquisition, must be reported in the appraisal. (A legal site may contain an illegal structure, etc.) Fee and staff appraisers shall secure information on status of billboards and administrative hearings from the Outdoor Advertising Permit Specialist. District right of way personnel shall request, the Outdoor Advertising Permit Specialist to prepare an Outdoor Advertising Profile Report (ADV Profile Report).
C. Compensation:
Compensation shall be paid for legal sites, conforming structures and non-conforming structures eliminated by an acquisition.
If a billboard structure or site that is illegal or scheduled for administrative hearing is encountered in the acquisition, consult regional counsel to determine if compensation must be included or omitted in the valuation, and state the findings and conclusion in the report.
If after the acquisition of an improved billboard site, the remaining spacing is such that one cannot identify which of two or more tracts might be able to obtain a permit for a replacement site, valuations must include compensation for improved sites that are eliminated but may be replaceable, and not speculate on which of several owners might achieve the permit.
D. Valuation:
Federal regulations require that all applicable, relevant and reliable approaches to value be considered in valuing billboards. Therefore, as in the valuation of all property types, all relevant approaches to value are to be considered and included in the report, when practicable. When the landowner also owns the billboard, and the billboard and site are being acquired, contact the Right of Way Section, and additional arrangements will be made for the valuation. The appraiser may estimate the value of billboards and their sites by the most relevant and reliable approach, and include the result in the total overall value. The appraisal must state why any approach is not used.
The valuation of billboard sites that are part of a larger ownership, may utilize market information from comparable sales of sites or capitalization of rents of comparable sites. This site value conclusion may then be added to or included in the concluded realty value of the overall ownership.
A special larger parcel valuation situation may arise if the landowner owns the billboard and also advertises the billboard owner's business, service or product, which is provided at other premises. When this ownership combination occurs, and the site and structure are acquired, contact the Right of Way Section and regional counsel.
Sales Comparison Approach: A Sales Comparison Approach may be developed using comparable sales of improved billboard sites, improved with structures similar to the subject’s structure. Elements of comparison might include traffic count, height, lighting, proximity to towns or commercial development, direction of travel, visibility, etc.
Income Approach: When a billboard acquisition necessitates an income approach, contact Right of Way Section, for additional guidance or arrangements will be made for the valuation. In all ownership combinations, the income derived from the rent received for the land and structure is to be considered in developing an income approach to determine the contributory value of the billboard and supporting land. Income from the sale of advertising displays posted on billboards shall not be considered as income imputable to the realty.
Comparable rental data can be developed with information from landowners who rent their structure to a second party who places advertising on the structure. Capitalization rates must be supported. Use of the band of investment method of developing a capitalization rate is acceptable.
In valuing billboard sites, the appraiser shall determine potential economic rent for the subject site. Such rent shall be estimated by comparing the subject site to comparable leased premises. Potential economic rent shall be capitalized at an appropriate rate to determine the current estimated value of the sign site. The appraiser shall explain or support the overall capitalization rate used. Legal status and remaining functional life of the site may impact the selection of the capitalization rate.
Cost Approach: The appraiser shall estimate the value of billboards and their sites by the cost less depreciation method and include the result in the total overall value. The Cost Approach shall always be developed, regardless if other approaches are also used. Costs for the structures shall be compiled by the unit in place method, quantity survey method or contractor estimate with depreciation measured by the most appropriate means available. Cost sources are to be supported as defined in EPG 236.6.3.1.9B.
The district is encouraged to contract for cost estimates of replacement or reproduction cost with local sources. It is the appraiser's responsibility to apply estimated depreciation to such estimates to the extent indicated by its current physical condition.
Reset Option: Signs meeting the reset requirements are classified as Conforming Out of Standard and will be eligible for compensation to reset the sign within the same property or on an adjoining property. One bid will be collected from another sign company supporting the cost of the sign reset. The bid will be included in the appraisal.
Reconciliation: The basis for the appraiser’s reconciliation of the approaches to a final value estimate should be based on their consideration of the relative strengths and weaknesses of each approach utilized.
E. Distribution of Fee Holder and Tenant Interest:
The appraisal report shall identify the site’s annual contract rent, remaining term of the lease, and any other provisions pertinent to the income to be received by the landowner. In those cases where the tenant has a lease and the contract rent is less than the economic rent for the sign site, the appraiser shall compute present value of the difference for the remaining lease term. This amount is the leasehold interest. This amount will be subtracted from the landowner’s value of the sign site. The amount shall then be added to the tenant’s interest.
F. Salvage Value:
The appraiser shall determine a salvage value. Salvage value is the probable sale price of an item if offered for sale to knowledgeable buyers, including the previous structure owner, with the requirement that it be removed from the property at a buyer’s expense (i.e. not eligible for relocation assistance). This includes items for re-use as well as items with components that can be reused or recycled when there is no reasonable prospect for sale except on this basis. Assignment of a salvage value for billboard structures should specifically address the previous owner’s ability to utilize or move the salvaged item.
If the appraiser, in consultation with the Outdoor Advertising Permit Specialist, determines that Legal Billboard Sites are readily available, it is acceptable to estimate the salvage value as the value in place at a potential replacement site minus the cost to relocate the sign to a replacement site.
G. Billboard Valuation Guide:
The following material is provided as a guide to suggest the minimum items of consideration in valuing a billboard and billboard site, which must be incorporated into an appraisal format, in the appropriate sections. Use Comparable Lease (Form 236.6.3.5.C) for reporting all types of leases.
  • Structure Owner
  • Site Owner
  • Status of the Structure
  • Status of the Site
  • Permit number and other material from the Outdoor Advertising Permit Specialist.
  • Lease Terms: If the lease is not of public record, the appraiser should attempt to secure a copy from the parties. In the event a written lease is nonexistent or unavailable, the appraiser shall make personal inquiry of the parties in an effort to learn of terms and conditions. Data secured from such inquiry shall be entered on the Comparable Lease (Form 236.6.3.5.C)
  • Property Description
  • Valuation
  • Distribution of Landowner and Structure Owner Interests
  • Estimated Value to the Landowner
  • Estimated Value of Billboard Site
  • Less Leasehold Interest, if any
  • Landowner Interest in the Site
  • Estimated Value to the Structure Owner
  • Estimated Value of Structure
  • Add Value of Leasehold Interest, if any
  • Structure Owner Interest
  • Salvage Value
3. Borrow Easements, Waste Easements or Haul Roads
A valuation for an easement for a borrow area or haul road must provide a word picture which would adequately explain what damages will be associated with these easement areas. The description should include the appraiser's understanding of what the site will look like, how much material will have been removed or deposited, what the possible damages to the remainder will be, whether the affected area will be ponded, whether the topsoil will be stockpiled and replaced and whether the area will be seeded and mulched.
If the acquisition involves a borrow easement or haul road, adjustments must be adequately explained.
4. Damages
Damages as such are not appraised. However, the appraiser shall explain any damages to the remainder property and allocate the difference in the value of the property before and after the acquisition between the value of the acquisition and damages to the remainder. If damages are measured by a cost to cure, the appraiser must justify the cost to cure and demonstrate that the cost to cure is less than the damage would be if the cure were not undertaken.
Rationale for conclusion of damage to remainder due to easements or other damage shall be explained. Losses to remainder value may result from limitation of direct access, proximity of proposed boundary line to improvements, severance, reduction in size of remainder, configuration of remainder, change in grade, and other effects of acquisition.
Noncompensable Damages: It is an established principle of law that certain damages, which may occur by reason of a government acquisition of land, are not compensable and, therefore, must be disregarded by appraisers when estimating market value for such acquisitions. Losses of business and relocation expenses have been determined to be noncompensable. Other noncompensable damages include: damage to business, loss of or damage to goodwill, future loss of profits, expenses of moving removable fixtures and personal property, depreciation in value of furniture and removable equipment, frustration of plans, frustration of contractual expectations, loss of customers, and the expense of having to readjust manufacturing operations.
Easements: An easement can generally be described as an interest in land of another entitling the owner of that interest to a limited use of the land in which it exists, or a right to preclude specified uses in the easement area by others. An easement is an interest less than the fee estate, with the landowner retaining full dominion over the realty subject only to the easement; the landowner may make any use of the realty that does not interfere with the easement holder’s reasonable use of the easement and is not specifically excluded by the terms of the easement.
Temporary Easements: The appropriate measure of value for the acquisition of a temporary easement is the rental value for the term of the temporary easement, adjusted as may be appropriate for the rights of use, if any, reserved to the owner. Damages that result from temporary construction easements are usually based on the economic or market rent of the affected area for the term of the temporary easement. Usually, the land area affected is so small and the term of the temporary easement so short that compensation for the temporary construction easements is nominal. As a result, many agencies and appraisers have adopted a shortcut for its estimation. A reasonable return rate, rather than the economic or market rent based on comparable rentals, is estimated and applied to the encumbered land’s fee value for the term of the temporary easement. The rent loss or appropriate return is often not converted to a present value through the application of a discount rate because of the short term of the temporary easement and the nominal nature of the indicated rent loss.
Even though technically incorrect this shortcut is generally acceptable because of the nominal nature of the temporary construction easements acquisition and the cost and time savings associated with the short cut. However, appraisers must recognize that the short cut methodology will be found unacceptable if the indicated compensation is more than nominal.
In estimating and approving just compensation for temporary easements, the appraiser/reviewer must consider the impact on the use of the area of the property in the temporary easement and the impact of the temporary easement on the remainder.
Impacts within the temporary easement area can have impact for the duration of the occupancy/use by the contractor, the duration of the anticipated construction time of the project, or the duration of the encumbrance of the temporary easement on the property.
Temporary easements that impact only during the contractor occupation include driveway reconnection easements, construction of curbs, removal of items, etc. Although a contractor may be on a temporary easement area during different times, (Example: removal, grading, sub-grade, and paving) the appraisal may consider merely the total of time the area is disturbed for construction, when making the calculation for compensation. Unless otherwise indicated, the appraiser is to assume that owners/customers are provided reasonable access to property during construction.
Temporary easements that impact during the duration of the anticipated construction for the project include temporary bypasses, slope cuts, (slope fills require permanent easement) borrow easements, work and turn areas on parking lots, construction of retaining walls, etc.
Temporary easements that impact for the duration of the temporary easement encumbrance include large temporary easements on vacant land with development potential, temporary easements that occupy large areas or large proportions of front yards, borrow or waste easements, or any application of easement that might impact market value or the marketability of the property. The duration of the project may include time beginning at the anticipated acquisition, and time until anticipated letting, construction time until anticipated acceptance of the project, which would release the rights in the temporary easement area.
Temporary easements that may result in damage to remainder outside the actual temporary easement area include temporary loss of access or use of part or all of the property, undesirable borrow areas, etc. MoDOT accepts compensation for temporary easements at 10% of fee value per year, applied to one of the durations discussed above. Appraisal reports must include explanation of the duration used and why that duration was utilized. Different durations may apply to different temporary easement areas on an individual property. Use of other percentages requires analysis and explanation.
Third Party Appurtenant Easements: This section applies to the proper measure of value for a third party appurtenant easement that is acquired or extinguished as an incident of an acquisition of the servient estate (fee acquisition of property through which an easement of access connects a third party’s parcel to the highway). The third-party easement owner has a separate estate that must be separately appraised. In such cases, the easement owner is not limited to the value of the easement acquired, but is entitled to the value diminution of the property served by the easement. Accordingly, two appraisal assignments are required; a before and after appraisal of the easement interest and the property it serves (the before appraisal including the easement interest and the land it serves and the after appraisal excluding those interests acquired.) and a second appraisal assignment covering the land being acquired, as encumbered by the easement. This second appraisal would also require a before and after appraisal if only a portion of this larger parcel is to be acquired
Costs to Cure: The Commission’s intent is to make the property owners “whole” in the after condition. As such, if the affected property had previously been surveyed by the current or previous property owners, district right of way shall ensure that this element has been addressed. One way to address this element is by including a cost-to-cure line item in the appraisal to cover the costs the property owners will incur to have a new boundary survey prepared. This element may also be addressed by coordinating with the district PLS to monument the new limits of their remaining property. EPG 238.2.14.3 Monumenting Landowner's Property Lines When Requested contains further guidance related to MoDOT taking responsibility for monumenting the property owners’ new property line.
Other methods may be used to address those properties that currently have the benefit of a boundary survey, as long as the property owner is considered by MHTC “whole” in the after condition.
Cost to cure items may include wells and water systems, septic or sewer systems, waterways, terraces, fencing for boundary lines along relocated highways, etc. Costs for such items shall be based on contractor estimates or other appropriate cost sources.
The estimated cost to move a building improvement shall not be used as a measure of consequential damage in the Value Finding format, unless authorized in the Scope of Assignment.
5. Dedication Requirement
When performing appraisals within corporate limits or in zoned areas, the appraiser must research the zoning ordinances, and/or subdivision regulations, to reveal if properties subject to acquisition could be required to make a dedication of land in exchange for zoning change or development plans, to achieve the highest and best uses that are anticipated to be suggested in appraisal reports. If such ordinances and/or regulations are discovered, their impact must be addressed and reflected in valuations.
Indications of dedication in existing ordinances, plats, deeds or other conveyances must contain the proper language to effect a proper dedication. The wording "reserved for future highway" will not rise to the level of a lawful dedication. The wording "dedicated to the Missouri Highway and Transportation Commission (or its predecessor title State Highway Commission of Missouri) for public use forever" or like wording must be used. Consult your regional counsel regarding the effectiveness of any particular wording. See Description Writing and EPG 236.5 Property Management and Right of Way Dedication.
6. Environmental Considerations
The appraiser is responsible for reporting any observed or suspected indications of contamination by hazardous materials or waste and the presence of other environmental considerations such as wetlands
A. Hazardous Materials or Waste:
When developing the scope of assignment, the assistant right of way manager - certified will review the Request for Environmental Services (RES) and data sheets to determine the appropriate level of data and analysis to be conducted by the appraiser.
For valuation of known contaminated properties, appraisers will typically be asked to value a property as if clean, from clean sales, as a special hypothetical condition. Clean up costs, if known, may be handled administratively or by the appraiser. Clean-up costs that may have been future or speculative to the owner may be immediately imposed by the project and therefore wholly or partially compensable, depending on the circumstance.
Because of the serious impact of contamination by hazardous materials or waste, it often affects major decisions by Planning, Right of Way and Design groups. In many cases this problem has been identified before the property acquisition phase of a project. If, prior to completion of the appraisal assignment, an environmental assessment and cleanup cost estimate have been done on a contaminated subject property the effect, if any, of cleanup cost on the value of the property must be considered in the appraisal.
There will be instances in which contamination has not been detected by the time an inspection for appraisal is made. In the absence of specific instructions, appraisers are not required to do, or to cause to have done, environmental assessments of subject properties, and it is expected that a disclaimer stating the appraisers' lack of expertise in this field will be included in the appraisal report. However, the appraiser is responsible for observing and reporting obvious indications of potential contamination.
If contamination is suspected, appraisers should photograph the suspect area include in the descriptive sections of their reports the circumstances or features that they feel indicate potential problems and clearly state that the possibility of contamination exists. They should include statements to the effect that "the value conclusion assumes that the property is not contaminated and if it is later found to be, the value estimate could change."
It is not the intention of this instruction to give comprehensive procedures for inspecting properties for contamination, but to offer appraisers some guidance.
The current use or historic uses of a property can be strong indicators of possible contamination. Some examples of uses that should alert the appraiser include:
  • Vehicle repair, maintenance or salvage;
  • Electroplating and/or metal fabricating;
  • Chemical manufacture, storage or sales;
  • Petroleum related storage, transportation or sales; Trucking; Manufacture, storage and/or sales of agricultural chemicals.
Site and improvement characteristics to look for include:
  • Tanks, pits, lagoons, ditches, pipes, piles, containers, etc.;
  • Containment structures such as berms or dikes;
  • Wastewater treatment facilities;
  • Recent unexplained ground disturbance;
  • Color variation in soils or barren soil;
  • Water with surface staining or sheen;
  • Dead or dying vegetation.
Potential asbestos containing materials include:
  • Sprayed-on fireproofing;
  • Pipe wrap; Friable tape;
  • Acoustical plaster; Shingles;
  • Floor tile.
Other possible indications of hazardous materials or waste:
  • Odors,
  • Peeling paint,
  • Urea-formaldehyde foam insulation.
These features or characteristics do not necessarily indicate contamination but should alert appraisers to the possibility. Once alerted, appraisers should include questions about the historic use of the property in interviews with owners, operators, city officials, real estate practitioners and others as they proceed with normal data research, and include their findings in their appraisal reports.
B. Wetlands:
Wetlands and Property Values
Summary 2007
See also: Innovation Library
The U.S. Army Corps of Engineers and the Environmental Protection Agency define wetlands as follows: "A wetland is a type of water of the United States subject to Section 404 of the Clean Water Act. Other such waters include lakes, ponds, streams (including intermittent streams), rivers, creeks, springs, territorial seas, other tidal waters, and other bodies of open water. The term wetlands means those areas that are inundated or saturated by surface or ground water at a frequency and duration sufficient to support and that, under normal circumstances, do support a prevalence of vegetation typically adapted for life in saturated soil conditions. Wetlands generally include swamps, marshes, bogs and similar areas. Also, wetlands are generally distinguished from other waters of the United States in that they normally support vegetation." The U.S. Department of Interior, Fish and Wildlife Service defines wetlands as "Land where water is the dominant factor determining the nature of soil development and the types of plant and animal communities living in the soil or on its surface."
At this time there is no comprehensive mapping or inventory of existing wetlands. The U.S. Soil Conservation Service can provide soil classification maps that note hydric soils (potential wetlands) and the Fish and Wildlife Service has National Wetland Inventory maps which also delineate potential wetlands but do not make a final determination. Three basic characteristics are considered in making a determination if an area is wetland:
  • hydrology,
  • vegetation,
  • and soil.
If an area is in a flood plain or otherwise has low spots in which water stands at or above the soil surface for more than seven consecutive days during the growing season and/or has plant communities that commonly occur in areas having standing water for part of the growing season (gum swamps, cordgrass, marshes, cattail marshes, bulrush and tule marshes, and sphagnum bogs) and/or has soils that are called peats or mucks there is a high probability that it is wetland, a determination of which must be reached by a more detailed investigation of soils and plant life.
When MoDOT appraisers are dealing with wetland in an acquisition the wetland area will have been defined by the Design Division. The appraiser's challenge is to find comparable sales that are also wetland. Because of the detailed investigation by specialists required to determine the presence of wetland as defined, and because this investigation is normally only done when construction or development is planned, the appraiser will not normally know whether a sale has wetland. The appraiser can, however, determine if some of the wetland-indicating conditions as stated above are present. If some or all of these conditions are present in a rural or low-density developed area it is likely that valid comparisons can be made between the subject and the comparable sales based upon the utility of the land. If the subject and sales are in an area where the highest and best uses are for development then the determination of wetland classification may be critical to the valuation process. A sale, for example, which is marshy land but not classified as wetland, may be developable at typical cost by filling while a similar tract, which is classified as wetland may not be developable or may be only at significantly increased cost due to requirements of Section 404 of the Clean Water Act.
7. Fence
Permanent Fence: Fence should be described in sufficient detail to allow an estimate of its contributory value and/or to allow development of a cost estimate for replacement. The fencing cost estimate may be supported by a contractor's estimate or fencing cost schedule. Appraisers are encouraged to seek contractor’s estimates, especially on larger and complex fence situations.
The appraisal should include compensation for replacement of all fencing, by like kind at actual new cost, along the proposed boundary line, which is necessary for the subject property to attain its highest and best use or contributes to that use.
Compensation for fence that may not contribute to the fulfillment of the highest and best use may be considered. Fence may have interim use value, depreciated in place value, salvage value (value of salvage exceeds cost of removal), no value (removal cost equals salvage value) or negative value (removal cost exceeds salvage value). The analysis should be clear as to which valuation premise is being used.
Fence that is acquired as a result of widening should be considered as an improvement acquired and may be valued at its contributory value or replacement cost depending on whether it must be replaced. A requirement for fence where there was none before, due to a realignment or other reason, should be considered consequential damage and valued by the cost to cure.
The appraisal shall include compensation for appropriate costs of fencing the boundary line in all areas where the ownership was previously fenced, even if plans indicate the contractor will fence the boundary line. Appraiser shall include all normal costs as if the contractor was not fencing. This provision applies to permanent fence and temporary fence; as well as borrows and haul roads if MoDOT will acquire the borrow area.
Temporary Fence: Temporary fencing of easements should be included as cost to cure. Estimated costs of temporary fencing should be consistent with its temporary nature.
Temporary fencing of easements not provided by the contractor should be included as cost to cure. Estimated costs of temporary fencing should be consistent with its temporary nature.
Temporary fencing of easements is required when livestock containment is an issue, even if the plans indicate the contractor will provide such fence. For reasons of highway safety and potential liability claims, compensation should provide temporary fence in like kind to the existing fence, up to and including woven wire. The value of board or decorative fence would be compensated for in like kind for the permanent fence, but would not be appropriate compensation measure for temporary fence.
8. Historic and Archaeological Considerations
Normally, properties with historic or archaeological significance will have been identified in the project design phase. If in the course of inspection or research the appraiser becomes aware of new facts indicating that a subject may be a historically or archaeologically significant site these facts should be reported to the district right of way manager for communication to other divisions with responsibility for dealing with them. Archaeological sites will likely be explored and artifacts removed before any effects by the project, and will normally not be considered in any appraisal of the property. Once a determination has been made to acquire a historic building for a project, it should be dealt with as a typical appraisal problem by taking into account all factors that affect value. Historic characteristics of a building may have positive, negative or no impact on value depending primarily upon market reaction to laws regulating the building's use and maintenance, and should be dealt with as part of the appraisal problem.
9. Manufactured Homes
In general, manufactured/mobile homes shall be considered realty if owned by the fee holder and assessed as realty. They shall be considered personalty if the tenant owns the mobile home but not the land in which the mobile home is sitting on. For additional definition of mobile home (see EPG 236.8.1.3.dd, and 49 CFR 24.2(a) 17.
If personalty, the manufactured/mobile homes shall be noted in the appraisal report but not valued. Personalty will be covered under relocation (see EPG 236.8).
10. Moving Improvements as a Measure of Damage
Use of the estimated cost to move a building improvement as a measure of proximity or other consequential damage must be supported by contractor estimates and analysis of market data to show feasibility. The value of the improvement if moved must be significantly greater than the after value in-place plus the cost to move. The use of this method is limited to those situations in which moving an improvement appears to be an action that a typical prospective buyer might consider. When this method of analysis is chosen both a sales comparison and cost approach should be done and the added value and extended economic life due to new components such as foundation, plumbing, wiring, etc. must be recognized in the after value conclusion.
11. On-premise Signs
If a partial acquisition requires removal of on premise signs, including logo or trademark signs, such signs are to be handled under Relocation.
If a business operation will be totally acquired, all on premise signs are to be valued as real estate and offered back to the owner at salvage value. An exception would be made, however, for those situations in which the business operation is to relocate to another location and wants to utilize an existing sign. In such cases a sign may be handled under Relocation.
12. Personalty Items and Fixtures
The appraisal report should identify the items considered in the appraisal to be real property, as well as those identified as personal property. See 49 CFR 24.103(a)(1) and USPAP Standard Rule 1-2 e iii. This requirement may be met by identifying fixtures included in the realty value. Identify fixtures or personalty that might be considered a fixture, which the owner desires to retain, and exclude those elements from the realty value. Examples include freestanding appliances, restaurant equipment, industrial machines, etc. To avoid duplication of payments in the relocation program, the appraiser may need to coordinate with the relocation specialist and legal counsel to ensure proper allocation of complex fixture and personalty items.
LP tanks owned by the fee holder are to be considered realty and included in the value estimate, unless the owner desires to have the fixture moved under the relocation program. Leased or tenant owned LP tanks are to be considered personal property and not valued.
Satellite dishes including all in-ground components are to be considered as personal property and not valued.
13. Project Influence
As contained in 49 CFR Section 24.103(b) (February 1, 2005), "The appraiser shall disregard any decrease or increase in the fair market value of the real property caused by the project for which the property is to be acquired or by the likelihood that the property would be acquired for the project, other than that due to physical deterioration within the reasonable control of the owner."
14. Special Benefits
Special Benefits are those benefits accruing to the land adjacent to the public improvements, which do not accrue to the public at large.
Special benefits reflected in an appraisal must be supported with concurrence from district counsel by letter retained in the appraisal work file.
It is the policy of MoDOT that no single-family dwelling that has contributory value, whether occupied or unoccupied at the effective date of appraisal or date of acquisition, shall be compensated at less than its contributory value due to the assessment of special benefits, and that no occupied dwelling shall be compensated at less than its value for residential highest and best use.
If there are special benefits to a remainder and an occupied or vacant dwelling which has value in the before situation is to be acquired, the of Assignment shall instruct the appraiser to do a cost approach in addition to any other applicable approaches so that a value estimate for the improvement is set out. If the estimate of just compensation of the appraisal is less than the value of the dwelling and residential outbuildings such as detached garages and/or storage sheds, and a typical supporting site the reviewer shall approve compensation in at least the amount of the estimated value of the dwelling, associated residential outbuildings and supporting site.
If there are special benefits to a remainder and an occupied dwelling which has no contributory value in the before situation is to be acquired, the Scope of Assignment shall instruct the appraiser to provide a value estimate for the dwelling and residential outbuildings such as detached garages and/or storage sheds, and a typical supporting site as if the highest and best use was residential, in addition to the value estimate resulting from dealing with the appraisal problem in the normal manner. Approved compensation shall be at least the value of the dwelling, associated outbuildings and supporting site.
If there are special benefits to a remainder and an unoccupied dwelling which has no contributory value in the before situation is to be acquired, the property shall be appraised for its highest and best use in both the before and after situation with no special consideration being given the improvements.
15. Blank
16. Units of Comparison
In markets where analysis by front foot indicators is considered appropriate, value indications by area (square foot or acre) shall also be included in comparative data and analyses.
17. Uniform Standards of Professional Appraisal Practice
USPAP Compliance Statement: This statement is to be used in Standard, URAR, and Value Finding formats. See EPG 236.6.3.4 for the USPAP Compliance Statement to be used with Waiver Valuations.
Uniform Standards of Professional Appraisal Practice (USPAP) provide the common basis for all appraisal practice and reflects the current standards of the appraisal profession. Supplemental standards applicable to assignments prepared for specific purposes may be issued by government agencies that establish public policy. This manual represents MoDOT’s supplemental standards.
USPAP addresses the ethical and performance obligations of appraisers through definitions, rules and standards. The definitions establish the application of certain terminology. The Ethics Rule sets forth the requirements for integrity, impartiality, objectivity, independent judgment and ethical conduct. The Competency Rule presents pre-assignment and assignment conditions for knowledge and experience. The Jurisdictional Exception Rule preserves the balance of USPAP if a portion is contrary to law or public policy of a jurisdiction. The Supplemental Standards rule provides the means for government agencies that establish public policy to augment USPAP. The Standards establish the requirements for appraisal, appraisal review and the manner in which each is communicated. In performing assignments for the MoDOT and Missouri Highways and Transportation Commission, appraisers are bound by these USPAP standards and rules.
USPAP Standards Rule 1-4 when applicable In developing a real property appraisal, an appraiser must collect, verify, and analyze all information necessary for credible assignment results MoDOT has determined, through the Scope of Assignment, the formats and approaches to value which are applicable, that is, the approaches which are necessary to produce a credible appraisal for valuing property or property rights to be acquired for the Missouri Highways and Transportation Commission purposes or for disposal of this property or property rights.
As an agency of the government of the State of Missouri with the power to make administrative rules with the force of law, MoDOT’s policy in this matter falls under the Jurisdictional Exception and explanation by the appraiser that the approaches to value are those required by the Scope of Assignment is adequate explanation and support for the exclusion of any of the usual valuation approaches.
It is not the purpose of MoDOT to circumvent USPAP in utilizing abbreviated report formats or requiring less than three approaches to value. Rather, the purpose of this procedure is to keep the authority for making the decision on which approaches to value shall be done on an administrative level. The appraiser has the responsibility to request a change in the Scope of Assignment if field inspection reveals that the appraisal problem is substantially different than described in the Scope of Assignment and the approaches called for do not adequately deal with the problem.
Through the Scope of Assignment process, the agency and the appraiser have determined that the appraisal process to be performed will provide a credible report. The review process finally assures that a credible report has been accomplished for the intended use.
Not all specific requirements of USPAP are applicable to every assignment. Typical practice for a given assignment is measured by the expectations of parties who are regularly intended users for similar assignments, participants in the market of appraisal services, and what an appraiser’s peers’ actions would be in performing the same or a similar assignment.
Jurisdictional Exception: Section A of the Uniform Appraisal Standards for Federal Land Acquisitions (UASFLA) notes that the Standards conform to Uniform Standards of Professional Appraisal Practice (USPAP), but that, in certain instances, it has been necessary to invoke USPAP’s Jurisdictional Exception Rule to conform the UASFLA to federal law relating to the valuation of real estate for government acquisition purposes. The following identifies the areas of the UASFLA that deviate from USPAP under the Jurisdictional Exception Rule.
USPAP’s Jurisdictional Exception Rule provides that "if any part of USPAP standards is contrary to the law or public policy of any jurisdiction, only that part shall be void and of no force or effect in that jurisdiction". By way of explanation, the comment section of USPAP’s Jurisdictional Exception Rule further provides: "By logical extension, there can be no violation of USPAP by an appraiser disregarding, with proper disclosure, only the part or parts of USPAP that are void and of no force and effect in a particular assignment by operation of legal authority". The comment also states, however, that "it is misleading for an appraiser to disregard a part or parts of USPAP as void and of no force and effect in a particular assignment without identifying in the appraiser’s report the part or parts disregarded and the legal authority justifying this action".
The conflicts between the UASFLA and USPAP that require invocation of USPAP’s Jurisdictional Exception Rule are minimal. Invocation of the Jurisdictional Rule should never be invoked lightly, or without reference to the overriding federal policy, rule, or regulation, which requires it. USPAP is not a particularly restrictive document, but it and the UASFLA require full and prominent disclosure to avoid misleading intended users (or even casual readers) of the appraisal report.
While the UASFLA standards are not themselves law, they are based on federal case law, legislation, and administrative rules. Also, the UASFLA standards have been specifically incorporated by reference into a number of statutes and regulations, in particular the regulations that implement the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970. It is clear that the deviations between the UASFLA and USPAP noted below fall under USPAP’s Jurisdictional Exception Rule; the legal authority justifying these exceptions consists of the UASFLA and the federal case law, legislation, and federal regulations upon which the UASFLA are based.
  • Linking Estimate of Value to Specific Exposure Time
Section A-9 of the UASFLA provides that the appraiser shall not link an estimate of market value for federal land acquisition purposes to a specific exposure time. This is contrary to USPAP Standards Rule 1-2 and Standards Rule 2-2, and is considered a jurisdictional exception. The legal basis and reasoning for this jurisdictional exception may be found in Section B-2 of the UASFLA.
  • Consideration of Land Use Regulations and Anticipated Public Projects
Section A-12 of the UASFLA provides that the appraiser disregard any changes in a property’s neighborhood brought about by the government’s project. Section A-13h of the UASFLA further instructs appraisers that they must disregard recent rezoning (or the probability of rezoning) of the property under appraisal if such action was the result of the government’s project. Section B-10 of the UASFLA, “Enhancement or Diminution in Value Due to the Project,” explains the legal basis for these instructions. These instructions are contrary to USPAP Standards Rule 1-3(a), which requires appraisers to identify and analyze the effect on use and value of existing land use regulations and probable modifications thereof, and to Standards Rule 1-4(f), which requires appraisers to analyze the effect on value of anticipated public improvements located on or off site. Therefore, the instructions to appraisers in the UASFLA in this regard are considered jurisdictional exceptions.
  • Review Functions
Section C-5 of the UASFLA notes that 49 C.F.R. 24.104 requires the reviewer to determine whether the appraisal under review constitutes an adequate basis for the establishment of an offer of just compensation. To do that, it may be necessary for the reviewer to consider information that was not available to the appraiser at the time the appraisal report was prepared. Standards Rule 3-1(c) of USPAP prohibits the reviewer from using information not available to the appraiser in development of an opinion as to the quality of the appraisal report under review. Review appraisers are cautioned that some may construe their consideration of such information in conducting their review and developing recommendations to management as contrary to Standards Rule 3-1(c). Therefore, review appraisers may wish to invoke USPAP’s Jurisdictional Exception Rule in this regard, depending upon the specific circumstances of the review.
As noted in Section C-1 of the UASFLA, administrative reviews are not subject to USPAP and do not meet the requirements of 49 C.F.R. 24.104. In addition, Draft Appraisal Reports are not subject to USPAP, even though they may be reviewed for general conformance therewith, as well as conformance with the UASFLA. However, a technical review report covering a draft appraisal report does fall under the purview of USPAP and the UASFLA. However, the review appraiser typically does not approve, recommend for approval, disapprove, accept, or reject a draft appraisal report. Draft appraisal reports, for purposes of the UASFLA, are written appraisal reports, or parts thereof, which are not signed by the appraiser and do not include a signed appraiser’s certificate, or a signed letter of transmittal.
  • Conduct of Preliminary Value Estimates and Appraisals for Federal Land Exchanges
As noted in Section D-7 of the UASFLA, a preliminary value estimate prepared under 43 C.F.R. 2201.1(b) is not considered an appraisal even though it may be prepared by a qualified appraiser. Therefore, the preparations of such preliminary value estimates are a jurisdictional exception to USPAP.
  • Specific Legislation and Regulations
Each land acquisition agency has its own policies, rules, and regulations relating to its land acquisition activities. While all of these rules and regulations work from a base of 49 C.F.R. Pt. 24, as do the UASFLA, specific agency program activities sometimes make it necessary to adopt rules and regulations which are, or may be construed to be, contrary to USPAP.

236.6.3.2 Value Finding Appraisal Format

The instructions for the Standard Appraisal Format (Form 236.6.3.1) are the source for general appraisal guidance on all the formats. The following instructions are specific to the Value Finding Appraisal Format.

Use of the Value Finding Appraisal Format (Form 236.6.3.2) is allowed when:

  • the acquisition is simple
  • fair market value can adequately be estimated by the sales comparison approach with only minor adjustments
  • damage to the remainder can be measured by the cost to cure or is consequential damage not exceeding $10,000 per element of damage, unless authorized by a policy waiver from Right of Way Section. Damages due to simple strip permanent or temporary easements and cost to cure items when valued by a reliable cost manual or contractors’ estimate are not subject to the $10,000 damage limit in the value finding format.
  • the highest and best use is the present use and is not materially affected by the acquisition. Change in highest and best use resulting from a nominal uneconomic remnant is allowed in this format.

Use of the Value Finding Appraisal Format, Form 236.6.3.2 is not allowed:

  • when there is consequential damage exceeding $10,000 to a structural improvement, unless authorized by a policy waiver from Right of Way Section (see EPG 236.3.1.D Damages).
  • when residences are to be acquired, unless authorized by a policy waiver from Right of Way Section.

Any waiver from the above restrictions of the Value Finding Format must be obtained in writing from Right of Way Section.

A. Instructions For Preparing Value Finding Appraisal Format

The appraiser shall adhere to the following format, and shall include paragraph headings and numbers as shown. The appraisal shall be typewritten on 8 1/2" x 11" paper with the pages numbered sequentially.

These format instructions set out appraisal requirements of the Missouri Department of Transportation (MoDOT) and the Federal Highway Administration (FHWA). It is inevitable that appraisers will occasionally encounter situations that are not specifically addressed herein. In all cases the appraiser is responsible for a credible, adequately documented appraisal. Reasonableness and typical professional appraisal practices are the standard.

There are a number of ownership items and appraisal problems frequently encountered in appraising for property acquisition, on which policies have been established by case law, management decision and precedent. These policies apply to all appraisal formats and are set out in EPG 236.6.3.1.D, Other Appraisal Considerations.

See EPG 236.6.3.1 for the standard identification block

1. Owner and Tenant Owner
See Owner and Tenant Owner for instructions.
2. Purpose of Appraisal
See Purpose of Appraisal for instructions and all standard language for this paragraph.
3. Interest Appraised
See Interest Appraised for instructions.
4. Scope of Work
See Scope of Work for instructions.
The Scope of Work for a Value Finding Appraisal Format is the same as that of a Standard Appraisal Format. However, due to the simplicity of the impact on the appraised property as determined in the Scope of Assignment, the required reporting level is reduced in the Value Finding report.
5. Identification of the Property
See Identification of the Property for instructions.
6. History of the Property
See History of the Property for instructions.
7. Description of Realty Before Acquisition
See Description of Property Before Acquisition for instructions.
A. Zoning:
  • Code
  • Category
  • Compliance
B. Land:
For the Value Finding format, the land description should concentrate on areas in the acquisition and areas affected by the acquisition. Unaffected areas may require little or no description.
  • Access Before Acquisition:
  • Utilities In Use Before Acquisition:
  • Utilities Available Before Acquisition:
C. Fee Owned Improvements, Fixtures and Personalty:
See EPG 236.6.3.1.7C for instructions for Fee Owned Improvements, Fixtures and Personalty. If unaffected by the acquisition, improvements shall be inspected to the extent that they can be adequately described. The appraiser may estimate the contributory value of unaffected improvements without support.
This format shall not be used when there is consequential damage exceeding $10,000 to a structural improvement. If there will be consequential damage to a structural improvement, include a detailed description of the affected improvement in this paragraph and explain damage applied in Paragraph 9.
D. Tenant Owned Improvements, Fixtures and Personalty:
See EPG 236.6.3.1.7D for instructions for Tenant Owned Improvements, Fixtures and Personalty. See also EPG 236.6.3.1.19.D.12 and 49 CFR Subpart B 24.103 (a).
E. Other Appraisal Considerations:
Methods and directions for addressing other property elements are set out in EPG 236.6.3.1.D.
8. Highest and Best Use
For a Value Finding appraisal, a statement of the highest and best use conclusion is sufficient. A concluded highest and best use in conflict with existing zoning must be explained. The Value Finding Appraisal Format requires that the highest and best use of an improved property be the current use and that the highest and best use is not affected by the acquisition.
For additional information on highest and best use, see Highest and Best Use Analysis Before Acquisition.
9. Description of the Acquisition and Effects on the Remainder
For a Value Finding appraisal, include the area of new acquisition and/or easements, and briefly describe their location, configuration and relation to improvements or other important characteristics of the property. See Description of Property Before Acquisition and Description of Property After Acquisition for instructions on Utilities and Access.
  • Access After Acquisition:
  • Impact on Utilities:
  • Utilities In Use After Acquisition:
  • Utilities Available After Acquisition:
Other Appraisal Considerations:
Methods and directions for addressing other property elements are set out in EPG 236.6.3.1.D.
10. Analysis and Supporting Data for Compensable Losses
A. Analysis of Overall Land Value:
In a Value Finding appraisal, a minimum of one unimproved sale comparable to the subject as if the subject was unimproved, shall be considered when arriving at an overall unit value, unless a different requirement of sale date is specified in the Scope of Assignment. See EPG 236.6.3.5 for requirements of comparable sale and EPG 236.6.3.1.9.A for the application of comparable sales in the valuation. All significant differences between the sale and subject must be identified and the effect on market value analyzed and explained.
In a Value Finding appraisal, total difference of up to 30% may be adjusted in a lump sum, with explanation. When a sale sufficiently comparable to meet this requirement is not available the appraiser may use the most comparable sale(s) available and show individual adjustments together with market data or in-depth explanation of the appraiser's rationale to support the adjustments and value conclusion. A brief explanation should be given if in the appraiser's judgment no adjustment to the sale(s) is necessary.
Conclusion-Overall Unit Value of Land: $ ________________
B. Analysis of Value of Land Acquired (if different from overall value):
In a Value Finding appraisal, if the unit value of the area acquired is different from the overall unit value of the entirety it must be supported by a sale comparable to the acquisition and explanation must be given why the estimated unit value of the acquisition area is different. The same procedure for adjustments as outlined above applies to the sale(s) used to analyze the unit value of the acquisition.
Conclusion-Unit Value of Land Acquired: $ _____________
C. Analysis of Value of Improvements, Fixtures and Personalty in the Acquisition:
In a Value Finding appraisal, the appraiser may estimate the contributory value of any acquired improvement having a value of $10,000 or less. Improvements with a value over $10,000 may be valued by The Cost Less Depreciation approach with cost sources, calculations and depreciation rates shown, or by a method set out in the Scope of Assignment, or EPG 236.6.3.1.9B.
Depreciation may be estimated by observed condition or age life methods. Market data supporting improvement value and/or depreciation estimates may be included.
Value of each improvement, its ownership and the total value of improvements acquired shall be shown. Also see EPG 236.6.3.1D.
Conclusion-Estimated Value of Improvements Fixtures and Personalty Acquired:__________
D. Analysis of Damage to the Remainder:
In the Value Finding format, rationale for conclusion of damage to remainder due to easements or other damage shall be explained. Description of temporary and permanent easements should include the use and anticipated duration of that use.
Losses to remainder value may result from limitation of direct access, proximity of the proposed boundary line to improvements, severance, reduction in size of remainder, configuration of remainder, change in grade, and other effects of acquisition. Losses of this nature may be estimated by the appraiser without the benefit of sales data or other supporting evidence provided an estimate for any one given loss does not exceed $10,000, but in all cases rationale must be reasonable and fully explained. Consequential damage due to more than one of the above factors may suggest that the standard appraisal format should be used.
Cost to cure items may include wells and water systems, septic or sewer systems, waterways, terraces, fencing for proposed boundary lines along relocated highways, etc. Costs for such items shall be based on contractor estimates or other appropriate cost sources. Value of each cost to cure item and the total shall be shown. The costs of cost to cure elements, documented in the same manner that would be applied in a Standard Format, are not included in this limitation of damages in this Value Finding format.
The estimated cost to move a building improvement shall not be used as a measure of consequential damage in the Value Finding format, unless authorized in the Scope of Assignment. See EPG 236.6.3.1.D10.
Conclusion-Estimated Damage to Remainder: $___________
Other Appraisal Considerations:
Methods and directions for addressing other property elements are set out in EPG 236.6.3.1D.
11. Estimate of Total Just Compensation
The Before Value Estimate shall include the value of land and all improvements including outdoor advertising structures. Contributory values of unaffected improvements may be estimated.
Total Before Value Estimate: $ ________________
After Value Estimate: $ ________________
Indicated Just Compensation Due to Acquisition:$ ________________
12. Allocation of Just Compensation
The appraiser shall offer an opinion of reasonable allocation of the estimate of just compensation between realty acquired and damages, if any, to the remainder. This policy shall apply to the interests of both fee holders and tenants who own improvements.
A. Allocation of Fee Holder’s Interest:
1. Land Acquired: $ ________________
2. Improvements, Fixtures and Personalty: $ ________________
Improvements or structures within the new acquisition and/or easement areas shall be identified, with a separate value shown for each. Fence acquired in a strip acquisition shall be included as an improvement acquired.
3. Total Land and Improvements Fixtures and Personalty: $ __________
4. Damages to the Remainder: $ __________
Damages to the remainder including permanent and temporary easements shall be identified and individually valued and their values combined to a total. Losses caused by temporary borrow pits must be set apart from other damages. Fencing required as a cost to cure due to road realignment, temporary fencing, etc., shall be included as a damage to the remainder.
5. Total Just Compensation Due Fee Holder: $ __________
B. Allocation of the Tenant Owner’s Interest:
1. Tenant Owned Improvements Fixtures and Personalty:
Item __________________ $ ________________
Item __________________ $ ________________
Identify each tenant owned improvement within the new acquisition and/or easement area and estimate its value. Use the greater of its contributory value or value for removal (salvage value).
2. Damage to Tenant Owned Improvements Fixtures and Personalty:
Item __________________ $ ________________
Item __________________ $ ________________
Identify and show a value loss, if any, for each tenant owned improvement lying outside the acquired area.
3. Leasehold Interest: $ __________
Calculate value of leasehold Interest, if any, should the lease be extinguished or rendered valueless by the acquisition.
4. Total Just Compensation Due Tenant-Owner: $ __________
13. Uneconomic Remnant
See EPG 236.6.3.1.17 for instructions on Uneconomic Remnant.
Area __________________ @ $ ____________ = $ ________________
14. Salvage Value
See EPG 236.6.3.1.18 for instructions on Salvage Value.
Improvement Salvage Value $_________________
Improvement Salvage Value $_________________
Total Salvage Value $ _________________
15. Required Attachments
See EPG 236.6.3.1.19 for Required Attachments.

236.6.3.3 Waiver Valuation

The purpose of the appraisal waiver provision is to provide a technique to avoid the costs and time delay associated with appraisal requirements for low-value, non-complex acquisitions. The intent is that non-appraisers and appraisers in training may make waiver valuations. The district right of way manager or assistant right of way manager certified makes a determination to use the waiver valuation.

Waiver valuations are not appraisals as defined by the Uniform Act and 49 CFR; (49 CFR 24 102 (c)) therefore, appraisal performance requirements or standards, regardless of their source, are not required for waiver valuations. Since waiver valuations are not appraisals, neither is there a requirement for an appraisal review. The definition of "appraisal" in the Uniform Act and appraisal waiver provisions of the Uniform Act and 49 CFR are Federal law and public policy and should be considered as such when determining the impact of appraisal requirements levied by others, including USPAP.

Use of the Waiver Valuation is allowed when the acquisition is simple and $10,000 or less. Fence re-establishment costs, whether improvement acquired or allocated to damages, may be excluded from this limit. No other cost to cure elements may be excluded from the limit.

Limitations to the intended use of the Waiver Valuation include:

  • land value is easily determined,
  • only nominal structural improvements are acquired,
  • only nominal access rights are acquired
  • other than fence, costs to cure cannot make the total compensation exceed $10,000
  • there are no apparent damages to the remainder – other than simple easements, access rights of nominal impact and creation of nominal uneconomic remnants

An agency official must establish just compensation to offer the property owner that is accomplished by the valuer’s signature and co-signature of the district right of way manager or assistant right of way manager certified, or their designee.

The same person may perform both the value estimate and negotiation functions. Although the right of way representative must contact the owner, an invitation to accompany the representative during the property inspection is not required.

This section provides guidance and format for a Payment Estimate waiver valuation. Other waiver valuation formats may be developed by districts to accommodate management style and project type. Development of alternative waiver valuation formats other than the Payment Estimate requires the approval of the Right of Way Section.

A. Payment Estimate Instructions:

Use of the Payment Estimate (Form 236.6.3.3) is allowed when the acquisition is simple and the value of the acquisition is $10,000 or less. Fence re-establishment costs, may be excluded from this limit. No other cost to cure elements may be excluded from the $10,000 limit. The same person may perform both the value estimation and negotiation functions if the value estimate is less than $10,000.
The following sample format will be adequate for most applications, but may be expanded to include space for uneconomic remnants, etc. when required.
Payment Estimate - Waiver Valuation
See EPG 236.6.3.1 for the standard identification block.
1. Owner and Tenant Owner:
Identify owner and tenant owner by address, phone number, etc.
For a Waiver Valuation, the property owner and tenant owner must be contacted and the contact documented in the valuer’s work file. Personal contact is preferred, however, when time or other limitations make this impractical, contact by telephone or mail is permitted. The valuer should inform the property owner and tenant owner as to the nature of the acquisition and that a written offer showing the amount of damages will be delivered by MoDOT right of way personnel or by mail.
In the Waiver Valuation, an invitation to accompany the right of way representative during the property inspection is not required. A copy of the brochure Pathways for Progress should be provided the property owner by the person making the initial contact. If the contact is by telephone, the brochure should be mailed.
2. Identification of the Property
See Identification of the Property for instructions.
3. Description of Acquisition
Briefly describe the acquisition. In the waiver valuation, affects on the remainder are limited to easements and nominal damage elements.
4. Basis for Value:
Valuer shall cite one or more vacant land sales. Explanation of values of easements, nominal improvement, costs to cure, etc. should be addressed here.
5. Summary
Value of Land Acquired: $ _______________
Value of improvements, fixtures or personalty to be acquired:
Fee owner (Salvage Value $_________) $ _______________
Tenant owner (Salvage Value $______) $ _______________
Damages to the Remainder:
Permanent Easement:
_____________(area) @ $ _______ = $ _______________
Temporary Easement:
_____________(area) @ $ _______ = $ _______________
Other Damages: ___________________ $ _______________
Sub-total: ($10,000) limit $________________
Fencing: _________l.f. @ $_________/(l.f.) $ _______________
Fencing: _________l.f. @ $_________/(l.f.) $ _______________
Fencing: _________l.f. @ $_________/(l.f.) $ _______________
Total Fencing: $ _______________
Total Just Compensation $ _______________
Uneconomic Remnant $ _______________
The assignment of value of a nominal uneconomic remnant created by an acquisition that fits the criteria and limitations of a Waiver Valuation may be assigned in this format.
6. USPAP Compliance Statement:
The valuer shall include in the waiver valuation report the following statement:
USPAP Compliance Statement: This waiver valuation was prepared according to the agreement/assignment from the Missouri Department of Transportation (MoDOT). The intended use of the waiver valuation is for eminent domain related acquisition and MoDOT is the only intended user (except as indicated above). MoDOT bears responsibility for agreement/assignment requirements that meet its needs and therefore are not misleading. In combination with the Scope of Assignment and administrative approval function, all waiver valuation reports assigned by MoDOT identify the problem to be solved, determine the scope of work necessary to solve the problem and correctly complete research and analysis necessary to produce a credible waiver valuation, and are therefore in compliance with USPAP Standard 1. In that the agency is the only intended user of the report and others may only be provided copies for informational purposes, the agency has determined that reports prepared in conformance with these procedures fulfill MoDOT’s needs. Any inconsistencies with USPAP are covered by the USPAP Jurisdictional Exception provision.
Prepared by:
Approved for Just Compensation by:
The preparer and the district right of way manager or their designee are required to sign the report constituting approval of just compensation by an agency official.
Required Attachments:
  • Site Plan
  • Photograph of Acquisition Area
  • Comparable Sale or Other Value Support
Optional Attachments:
  • Cover letters
  • Tables of Contents
  • Qualifications
  • Engagement Letter or Notice to Proceed

B. Use of Nominal Equal Payments to Assign Just Compensation with the Waiver Valuation

Districts may establish categories of extremely simple and nominal acquisitions, like temporary driveway connection easements, and assign nominal equal compensation for those categories. The compensation must be greater than the conclusion of a valuation assignment or other calculation of the compensation, if one were done. These nominal equal payments may be included in Waiver Valuations for parcels with additional types of acquisitions or may be established as the Just Compensation if it is the only acquisition on given parcels.

C. Use of Agent’s Value Estimate (AVE)

Use of the AVE will be based on current sales data, parcel size, and other applicable appraisal criteria, to ensure that property owners are offered a fair market value for the acquisition of less than $10,000.

The AVE will be prepared either in a MoDOT memorandum format or a cost estimate spreadsheet format. Data included in the AVE will include: date, parcel number, county route and project number. The sales data use is arriving at a value will be listed. It will be referred that three sales be shown as comparables, but listing one comparable sale is acceptable in limited markets. Fencing values and other minor items of acquisition will be estimated by using contractor’s cost estimates and/or Marshall and Swift cost data. The Assistant Right of Way Manager – Certified, or their designee will make a brief statement concerning the acquisition and the rationale for using the comparable sales.

A valuation summary will list the amount of land being acquired and the estimated value per acre. Any areas for temporary or permanent easements will be listed with the appropriate value and percentage of damages. Fencing, minor improvements acquired and other applicable items of compensation will be shown in the summary as a line item addition to the total compensation. All items of compensation will then be added t produce the total compensation to be offered for each parcel.

D. Nominal Acquisition Payment (NAP)

Use of the NAP will be based on current sales data, parcel size, and other applicable appraisal criteria, to insure that property owners are offered a fair market value for the acquisition of less than $10,000.

The NAP is a table format indicating owner, size of subject, property and easements to be acquired, unit price of comparable sale, easement percentage, calculation of minor improvements, explanation of damages and calculated payment.

236.6.3.4 Uniform Residential Appraisal Report (URAR) and Addendum

The instructions for the Standard Appraisal Format (Form 236.6.3.1) are the source for general appraisal guidance on all the formats. The following instructions are specific to the URAR Appraisal Format.

Use of the URAR (Form 236.6.3.4) must be authorized by the approved Scope of Assignment and will be primarily intended for valuations for the acquisition of single-family residentially improved tracts that are total acquisitions or where the only remainder is a nominal uneconomic remnant. Applicability is restricted to situations in which the residential improvements clearly represent highest and best use.

The appraiser shall adhere to the following instructions. The appraisal may be on a preprinted or computer-generated URAR form of a version currently used in appraisal practice. Harrison's Illustrated Guide to the Uniform Residential Appraisal Report may be used as an instruction for proper completion of the URAR, for items not specified in these instructions.

There are a number of ownership items and appraisal problems frequently encountered in valuing acquisitions for transportation purposes, on which policies have been established by case law, management decision and precedent. These policies apply to all appraisal formats and are set out in EPG 236.6.3.1D Other Appraisal Considerations.

236.6.3.4.1 Uniform Residential Appraisal Report and Addendum

See EPG 236.6.3.1 for the standard identification block.

1. Owner and Tenant Owner
Identify owner and tenant owner by address, phone number, etc.
2. Purpose of Appraisal
See Purpose of Appraisal for instructions.
3. Interest Appraised
See Interest Appraised for instructions.
4. Scope of Work
See Scope of Work for instructions.
The Scope of Work for a URAR Appraisal Format is the same as that of a Standard Appraisal Format. However, due to the standardization and familiarity of the appraiser and the owner with appraisal of single-family homes, the required reporting level is reduced in the URAR report.
5. Identification of the Property
See Identification of the Property for instructions.
6. History of the Property
See History of the Property for instructions.
7. Description of Property Before Acquisition
See description of property before acquisition for instructions. For the URAR, only those elements that are not identified on the URAR valuation form need to be addressed here.
A. Zoning:
  • Code
  • Category
  • Compliance
  • None
B. Land:
See land description for instructions.
  • Access Before Acquisition:
  • Utilities In Use Before Acquisition:
  • Utilities Available Before Acquisition:
C. Fee Owned Improvements, Fixtures and Personalty:
See EPG 236.6.3.1.7C and EPG 236.6.3.1.7D and EPG 236.6.3.1.D12 for instructions on Fee Owned Improvements, Fixtures and Personalty.
D. Tenant Owned Improvements, Fixtures and Personalty
See EPG 236.6.3.1.7C and EPG 236.6.3.1.7D and EPG 236.6.3.1.D12 for instructions on Tenant Owned Improvements, Fixtures and Personalty.
A sign, billboard or other property owned by others, which the Fee Holder does not have a right or obligation to remove, must be identified and valued separately. See EPG 236.6.3.1.D2.
E. Other Appraisal Considerations:
See EPG 236.6.3.1.7E and EPG 236.6.3.1.11A for additional information concerning Other Appraisal Considerations.
8. Estimate of Total Just Compensation
For the URAR format, attach a narrative explanation of the comparison of each comparable sale with the appraised property, and the adjustments implemented for each significant element of difference affecting value. An explanation shall be offered for each individual adjustment. Differences may be measured by either dollars or percentage.
Estimated Value Before Acquisition: $______________
Estimated Value After Acquisition: $______________
Indicated Just Compensation Due to Acquisition: $______________
9. Allocation of Just Compensation
A. Fee Holder's Interest:
1. Land Acquired: $______________
2. Improvements, Fixtures and Personalty: $______________
3. Total Land and Improvements, Fixtures and Personalty: $______________
4. Damages to the Remainder: $______________
5. Total Just Compensation Due Fee Holder: $______________
B. Tenant Owner's Interest:
1. Tenant Owned Improvements, Fixtures and Personalty: $______________
2. Damage to Tenant Owned Improvements, Fixtures and Personalty:$______________
3. Leasehold Interest: $______________
4. Total Just Compensation Due Tenant Owner: $______________
10. Uneconomic Remnant
See EPG 236.6.3.1.17 for instructions on Uneconomic Remnant.
Area ________________________ @ $__________________ = $_____________
11. Salvage Value
See EPG 236.6.3.1.18 for instructions on Salvage Value.
Improvement ______________________ Salvage Value $______________
Improvement ______________________ Salvage Value $______________
Total Salvage Value $______________
Required Attachments
Optional Attachments:
  • Cover letters
  • Tables of Contents
  • Appraiser Qualifications
  • Engagement Letter or Notice to Proceed
  • Legal Instructions, if any shall be retained in the appraiser’s work file and not attached to valuation reports.

236.6.3.5 Instructions for Preparing Sale Forms

Appraisers shall incorporate within the appraisal reports adequate sales and other supporting data to relay the necessary comparative information, by attachment of the sale data sheets, Form 236.6.3.5.A and Form 236.6.3.5.B.

The purpose of the sale forms is to provide sufficiently detailed information about transactions and the properties involved to allow the appraiser to make comparisons and value judgments, and to allow a reader to follow the reasoning and validate the comparisons. The forms provide blanks to be completed with information that tends to be common to all sales, but seldom are the completed blanks sufficient to furnish all information that should be included. Judgment from the appraiser is required even in this. Those significant characteristics of the sale property, and important details of the transactions should be included whether or not a specific blank is provided for the information.

Use of sales that have improvements located on them as vacant land sales, when it has been confirmed that those improvements did not contribute to value, is acceptable provided that during the course of time that the sale is being relied upon, those improvements have not been rehabilitated for renewed use. Once it becomes apparent that an improvement, formerly concluded to have no contributory value, has been put back into productive use, a sale written to the contrary has lost much of its credibility and is not to be used as a comparable for land valuation.

The Certificate of Appraiser (Form 236.6.3.1.B) indicates that an appraiser has inspected all sales considered in the valuation process; therefore, subsequent inspections by other appraisers need not be identified on the forms. It is recommended that for future court testimony, that each appraiser makes a personal record of the sale inspections in regard to each property appraised.

A. Nonresidential Sale Form (Form 236.6.3.5.A)

Sale Form 236.6.3.5A is for reporting sales of all vacant or improved properties other than improved single-family residential properties, or where residential improvements do not represent the highest and best use.

Completion Of The Sale Form Entries
Selling Price: This entry should reflect the total selling price of the property, including land and all improvements, if any. If the price was confirmed in another manner or if other information about the sale price was revealed, a full explanation should be included elsewhere on the form.
Unit Price: Indicate the entire selling price including all land and/or land and improvements, divided by the site area, gross living area above ground level (for residential improvements), or gross building area of the main improvement, or explain if the amount was calculated in another method.
On the Nonresidential Sale Form 236.6.3.5.A, indicate whether the price was confirmed as a price per unit or a total price.
Type of Transaction: Entries in this field should describe the relationship of the buyer and seller. Any entry other than "Open Market" must be fully explained.
Financing: If financed by a lender with a conventional loan, the word Conventional will satisfy this requirement. If seller-financed or if there is concessional financing of any kind, the rate and terms should be included. If other than Conventional, the form must report the type of instrument and terms known, and show calculations for the cash equivalent sale price, with indicated adjustment shown in the Financing Concession field of the Property Description Section.
Cash Equivalency must be calculated and used in direct comparison with subjects. Situations that may require cash equivalency adjustments include: mortgage assumptions at favorable rates, mortgage buy-downs, installment sale contracts, wraparound loans, points paid by seller, seller-financed loans, etc.
Site Dimensions: In regularly shaped parcels, the dimensions can be expressed as "width X depth". When appropriate, the average width by the average depth is acceptable. A line drawing of the perimeter of the property may be necessary to fully communicate an understanding of the property layout.
  • Site Area:
  • Building Area:
Zoning: The code and category of zoning as of the date of sale should be stated (for example, C-2 Commercial District). If the property is nonconforming with the zoning, this should be explained in the text of the sale form. If closing of the sale was contingent upon a different zoning being granted, this entry should reflect the contingent zoning and the body of the sale should include an explanation of the circumstances surrounding the zoning change. Special zoning provisions or restrictions should be noted, such as minimum lot size or number of developed units allowed.
Zoning Compliance: Either state yes, or explain noncompliance.
Highest and Best Use: The following standardized entries should be used: Single-family Residential; Multi-family Residential; Commercial; Industrial or Agricultural. Standardization of broad categories of use under these headings facilitates data base entry and search functions. Frequently additional explanation of highest and best use in the text of the sale will be warranted.
Utilities In Use (At Time Of Sale): State what utilities are on site. "All available" or "All in place" are not acceptable entries. The use of initials, W, E, G, S as abbreviations for publicly provided water, electricity, natural gas, and sanitary sewer is suggested. Use of Deep Well, Shallow Well, and Septic is suggested for privately provided utilities that are in use on the property.
Utilities Available (At Time Of Sale): If a utility is not on the property but is close, or is available but not connected, state what is actually on the property as of the date of sale and explain in the depth that the circumstances demand.
Access (At Time of Sale): Report legal and physical points of access and entrances. Legal access represents a deeded or permitted access point to a property. Physical access merely reflects the presence of existing entrances, which may or may not be legal.
Identification of the Realty: Location information should be adequate to assist the reader in driving to the property
The real estate involved in the sale can be identified by an abbreviated property description, address, map reference, copy of a survey or map, property sketch and/or photographs or the like. Lengthy property descriptions should not be reiterated within the sale form, but rather copies of the title report or last deed of record should be reviewed by the appraiser and retained in the appraiser’s work file and or district sales data files.
A property description does not need to repeat the actual description on the deed, but must provide enough data to allow the reader to regenerate the perimeter of the property. If subdivision land, provide a cut or tracing of the subdivision plat or a drawing to allow subsequent users of the form to locate the lot.
Inclusion of a copy of the transfer document (e.g., deed, contract) in the report is neither required nor desirable, unless there is something in the document that is unusual or particularly revealing.
Sale Verification: All comparable sales used shall be confirmed by the buyer, seller, broker or other person having knowledge of the price, terms, and conditions of sale. This form and its contents may be used by various appraisers, without further verification subsequent to its original verification, providing the appraiser using the form also inspects the sale premises. Subsequent users of the sale assume responsibility for the correctness of information presented on the Sale Form. Telephone numbers of verifying parties are very desirable. Signature of verifying appraiser is not required. If confidential data is included with a sale confirmation, that sale information must be handled in a manner that the confidentiality is not violated.
In this section of the sale forms, include name of verifying appraiser and confirming party, company (if Realtor, lender, etc.) and position in company (broker, loan officer, agent etc.) If confirmation is by other than the buyer, seller, lender or real estate agent, identify relationship to the transaction. Values reported as a public record (example: Certification of Value in Metropolitan St. Louis and Jackson County) and MLS information are not acceptable without further verification.
It is the intention of this requirement that enough information be provided that the verification can be repeated for purposes of court testimony or review. For trial purposes, a party to the transaction could be interpreted differently. In this case, consult with legal staff for specific requirements. Any person testifying about the facts of the sale may be required to personally verify those facts.
Map Number: Map identification numbers in common local use may be entered as appropriate.
Property Description: On the Nonresidential Sale Form (Form 236.6.3.5.A) indicate by subparagraphs description of land, description and type of improvements, if any, and any other data pertinent to analysis. Attach additional sheets if necessary.
Physical characteristics should be adequately explained to make comparison with those characteristics of subject properties being appraised. For analysis and valuation of properties subject to partial acquisitions, it is particularly important to note unusual features in sales, like building setback, frontage, depth, shape, access, entrances, etc.

B. Residential Sale Form (Form 236.6.3.5.B)

Sale Form 236.6.3.5.B is used for reporting sales of improved single- family residential property, and the entry fields correspond with the URAR form as much as possible. For the standard entries see Paragraph A, above.

Property Description: On the Residential Sale Form (Form 236.6.3.5.B), the physical items of this section of the form are arranged in the same order as the URAR (Form 236.6.3.4). Physical characteristics should be adequately explained to make comparison with those characteristics of subject properties being appraised.
Quality of Location: This entry should reflect the quality of location in factual terms. (Typical street, Dead-end road, Gravel road, Corner, etc.) Subjective terms (good, poor) might be used in addition to the factual data.
Site/View: The appraiser should indicate such site factors as size, shape, topography, drainage, encroachments, easements, view, landscaping, driveway, flood hazard, or any detrimental or unusually positive site conditions. For analysis and valuation of properties subject to partial acquisitions, it is particularly important to note unusual features in sales, like building setback, frontage, depth, shape, access and entrances.
Design (Style): Indicate the style of construction (ranch, bungalow, etc.). Also indicate such aspects as appeal of exterior design, interior attractiveness, special features, and any other characteristics that would make the property attractive or unattractive to purchasers and otherwise enhance or detract from its overall marketability. During the confirmation the appraiser should attempt to ascertain the above items.
Quality of Construction: An overall quality rating should consider the quality of materials and workmanship used in all components of the building.
Age: Indicate the estimated or actual age of the dwelling, at the time of sale. If a dwelling has been substantially modernized or upgraded, the effective age may also be indicated. Effective age estimation will require a comment describing the basis for assignment and the degree of modernization.
Condition: Indicate "good", "average", "fair" or "poor". For purposes of comparison with subjects, items of curable and incurable deterioration are the sensitive elements in this consideration.
Basement/Finish: The appraiser should report basement improvements such as finished rooms and recreation rooms found in the sale. If there is no basement or only a partial basement, this should be indicated.
Functional Utility: This entry relates to the efficiency of a building's use and reflects such factors as layout, room size, and general livability. Trends in single-family home construction sometimes determine whether residences have such items as porches, balconies, fireplaces, separate dining rooms, large kitchens, entry halls, and family rooms. Standards for dwellings also vary widely with regard to income level of prospective tenants and location. When judging the functional utility of residential buildings, the appraiser should attempt to interpret the reaction of typical purchasers in the specific market area.
Heating / Cooling:
Energy Efficient Items:
Garage / Carport:
Porch / Patio / Deck:
Other - kitchen equipment and remodeling: All kitchen equipment must be itemized.

C. Comparable Lease Form (Form 236.6.3.5.C)

Form 236.6.3.5. C is provided for the reporting of comparable leases.

D. Optional Sale Forms From Fee Appraisers

To accommodate the efficient use of various fee appraisers’ sale databases, sale write-ups of other formats can be accepted. It is up to the assistant right of way manager – certified or other reviewer to accept, reject or request supplemental information regarding other sale forms.

236.6.3.6 Access Rights Valuation

Appraisals of access rights will be made in conformity with the appropriate state laws, regulations and policies and procedures for acquisition and disposal of property. Refer to EPG 236.5.28.3 Compensation for Changes in Access. Article IV, Section 29 of the Missouri Constitution gives the Commission authority to limit access to, from, and across state highways where the public interest and safety may require.

Article IV, Section 29 (Highways and Transportation) of the Missouri Constitution states:

“The highways and transportation commission shall have authority over all state transportation programs and facilities as provided by law, including, but not limited to, bridges, highways, aviation, railroads, mass transportation, ports, and waterborne commerce, and shall have authority to limit access to, from and across state highways where the public interest and safety may require.”

The Scope of Assignment will identify the anticipated minimum requirements for the appraisal format to be prepared, based on the anticipated value or complexity of the access rights to be valued.

236.6.3.7 Realty Asset Valuation

Estimates and appraisals of realty assets will be made in conformity with the appropriate state laws, regulations and policies and procedures for acquisition and disposal of property set out in this chapter. The assistant right of way manager - certified will instruct the staff or fee appraiser on the minimum valuation documentation, based on the complexity of the appraisal problem and the anticipated value of the realty asset to be valued. See EPG 236.5.9 Uneconomic Remnants (in EPG 236.5 Property Management) for additional information on disposal of Realty Assets.

Assistant right of way manager - certified or individual designated by the district right of way manager shall merely examine the Realty Asset Inventory Estimate (Form 236.6.3.7A) without need for co-signature. Assistant right of way manager – certified or individual designated by the district right of way manager is required to cosign the Realty Asset Estimate Less Than $25,000 (Form 236.6.3.7B) or substitute Value Statement Memorandum, with supporting documentation. Review and Approval of Just Compensation (Form 236.6.4.3) accommodates the review and approval of the Realty Asset Appraisal (Form 236.6.3.7C).

It is intended that realty asset parcels, or the potential to add value to abutters’ property, be valued to reflect their full potential as if marketed by any knowledgeable seller.

Identification Of Asset Parcels: Parcel identification numbers will be established in the Realty Asset Inventory. The job number inserted is the job on which the land was originally acquired.

Authority To Appraise Assets: An appraisal assignment to value a realty asset shall be authorized by the district right of way manager after a recommendation to sell has been made by the Asset Management Committee.

An appraisal assignment to value a Capital Improvement property must be authorized by a letter from General Services Facilities Management, Central Office.

Valuation Assumptions: All realty assets must be valued with the following assumptions

  • Highway Commission has full fee interest
  • Parcel can be developed or marketed for its highest and best use
  • Parcel will be marketed to a party expected to pay the full-appraised amount.

Ownership Interest: The ownership interest of the Commission will be reported by a realty asset legal opinion memo. It is not necessary to have a final determination of ownership interest before completing the appraisal assignment.

Valuation Documents: All proposed sales of realty assets require a valuation document by Form 236.6.3.7B or Form 236.6.3.7C. However, you may substitute Form 236.6.3.7B with a value statement on an Inter-Office Memorandum for parcels valued at less than $25,000. Support for the value must be included in the Inter-Office Memorandum. Adequate information must also be included to clearly demonstrate that assemblage parcels were valued using the appropriate "Across-the-Fence" valuation method. Realty assets are placed on the Realty Asset Inventory at the value indicated on Realty Asset Inventory Estimate (Form 236.6.3.7A). Non-cash and other trades of realty assets require a valuation document for each component of the trade.

Stand-Alone or Assemblage Determination: Parcels that are not easily distinguished between stand-alone or assemblage-use, require detailed analysis and explanation of zoning, setback, access and any issue that influences the conclusion.

Realty Asset Valuation Instructions: District right of way shall authorize appropriate personnel to prepare the following valuations.

A. Valuation by Realty Asset Inventory Estimate
The valuation for purposes of placing the parcel in the Realty Asset Inventory is to be documented on the Realty Asset Inventory Estimate (Form 236.6.3.7A). This form is designed to serve as a valuation tool for use when a recently identified or recently acquired parcel is being placed on the Realty Asset Inventory. An interested party is not identified, and marketing is not pending. If disposal is pending, use a realty asset estimate or appraisal form, Forms 236.6.3.7B (or substitute Value Statement Memorandum) or 236.6.3.7C, which will then also serve for the inventory estimate.
Preparers are expected to be one that might be assigned to prepare a cost estimate, Scope of Assignment, payment estimate, etc. This will serve as the inventory value estimate for all properties, regardless of value or complexity.
The assistant right of way manager - certified or designee shall determine the amount of documentation and exhibits necessary to support the inventory value, based on the complexity and value level. Use the minimum investment in time and documentation to establish a reasonable inventory value estimate.
B. Valuation by Realty Asset Estimate Less Than $25,000
Realty assets, with value less than approximately $25,000 will be documented by a Realty Asset Estimate Less than $25,000 (Form 236.6.3.7B) or substitute Value Statement Memorandum with supporting documentation. This form or memorandum is to serve as a valuation tool for disposal values when an interested party is identified or marketing is promoted internally. It will serve as the final valuation document for non-complex/low-value parcels up to a conclusion of $25,000. The document provides an adequate level of documentation in this value range only if the realty asset and its valuation is very simple.
Although valuations less than $25,000 may result in transfers to certain adjoining owners and others for a nominal consideration, completion of this form or substitute Value Statement Memorandum is the minimum reporting required for every disposal, with the following exception: if the Commission is conveying the property interest to the original owner for a $1 consideration AND the original owner is still the abutting land owner AND the property interest was originally donated to the Commission, an appraisal or valuation estimate is not required.
The preparer is expected to be one that might be assigned to prepare a cost estimate, payment estimate, or other noncomplex valuation.
Realty assets valuations dependent on consideration of use, zoning, access, utilities, etc. shall not be accomplished on this format.
C. Valuation by Realty Asset Appraisal
A Realty Asset Appraisal (Form 236.6.3.7C) will document realty asset values greater than approximately $25,000, or complex situations that result in values less than $25,000. This form is designed to serve as a valuation tool for disposal values when an interested party is identified or marketing is promoted internally. The district right of way manager or assistant right of way manager – certified will establish the minimum reporting criteria.
1. Assignment criteria:
  • Low value & simple assemblage or stand-alone. One sale, statement of highest and best use, value conclusion. (The content and reporting level of a Payment Estimate)
  • Medium value & simple assemblage or stand-alone. More than one sale, explanation of highest and best use, comparison to comparables, value conclusion. ((The content and reporting level of a Value Finding)
  • High value, complex assemblage or stand-alone. Three land comparables, building valuation (assign applicable approaches), analysis of highest and best use, and direct comparison to sales, reconciliation and value conclusion. (The content and reporting level of a Standard Format)
2. Stand Alone Parcels
Parcels that are large enough and have physical characteristics that allow them to be developed to a freestanding use will be valued like any appraisal assignment if the anticipated value is greater than $25,000. The highest and best use will be determined, appropriate sales will be discovered and compared, and a value conclusion established.
3. Assemblage Parcels
The value sought is use value of a limited market property. Use value is value for assemblage, and reflects the highest and best use of the property(s) to which it might be assembled. The subject is considered a limited market property because of the small field of potential purchasers.
The potential purchasers may consist of only one adjoining owner, whose use for the subject tract is typically only for assemblage purposes. Under these conditions the subject may take on the value characteristics of the overall tract to which it is to be assembled, or may contribute at a greater or lesser value than the overall unit value of the tract to which it is to be assembled. Such a value indication is typically unaffected by influences such as size, shape and limited access.
If the ultimate assemblage changes the use potential of the requestor’s original property, the valuation should reflect the newly changed use.
If the highest and best use is determined to be only as assemblage to adjoining property, the Highest and Best Use Analysis should address the use of the adjoining land and the comparable sales should be similar in use potential and other characteristics to the adjoining property. Under this circumstance, the realty asset parcel may take on the value characteristics of the larger parcel, and the question to be answered by the appraiser's analysis is whether it contributes at the average unit value, greater than or less than the average unit value of that larger parcel. The utility of the realty asset parcel should be judged as it contributes to the tract with which it would most likely be assembled.
When the use is determined to be for assemblage, the size, shape, location, utility access, and in some cases, the physical characteristics (slope, grade, elevation, drainage, etc.) of the realty asset parcel are only important in relation to their contribution to the newly assembled property.
Adjustment should not attempt to reflect an assemblage or "one buyer" effect on value.

236.6.3.8 Maintenance Lot and Capital Improvement Valuation

Assignments to value future capital improvements will be authorized by the General Services Division, Facilities Management.

The district right of way manager or assistant right of way manager - certified will determine the complexity of the appraisal problem and recommend either the Standard Appraisal Format or the Value Finding Appraisal Format. A Scope of Assignment is not required but may be advisable on complex situations or with a fee appraiser assignment.

Facilities Management will assign a project number, that should appear on the appraisal and all significant correspondence.

When the acquisition represents the entire ownership, no special instructions apply.

When the acquisition is only part of an ownership, the highest and best use analysis should be of the part being acquired.

Appraisals will be prepared and reviewed consistent with property appraisal practice set out in this chapter. Complexity of the acquisition will determine the format and level of reporting required.

A copy of the approved appraisal shall be sent to General Services Division, Facilities Management for final approval and funding, after which, Facilities Management will notify district right of way to proceed with negotiation to acquire the site. Any settlement above the approved appraisal amount shall be communicated to General Services Division, Facilities Management prior to finalizing the acquisition.

236.6.3.9 Other Agency Valuations

The Department of the Interior, the Missouri Department of Natural Resources, and some other agencies adhere to the Uniform Appraisal Standards for Federal Land Acquisitions (UASFLA) while the Missouri Department of Transportation (MoDOT) instructions, approved by the Federal Highway Administration (FHWA), use the UASFLA as a guide. The Scope of Assignment preparer or the appraiser will need to determine the other agency’s requirements.

The following instructions outline the items different from, or in excess of the MoDOT's instructions, which are required when doing appraisals for these or other agencies. This is only a general outline. Consult the Right of Way Section for current and complete instructions and requirements. Appraisals will be reviewed in the typical process using the Appraisal Review and Approval of Just Comparison Form (6.4.3).

See the FHWA Web site for current requirements and guidance.

236.6.3.10 Airport Valuation

Appraisals for airport projects and contracting to perform such services are under the specific guidelines of the Land Acquisition and Relocation Assistance For Airport Projects.

These instructions are addressed to those staff and fee appraisers preparing and reviewing appraisals of partial and total acquisitions for airport development and expansion. Since the this article was primarily developed for acquisition of rights of way for highway projects, the terminology relates to highways. The same general appraisal principles apply to appraisals for airport projects, with the exceptions summarized here. The specific appraisal requirements are addressed in Circulars/150/5100-17 Chapter 2.

A. Formats Used
All Missouri Department of Transportation (MoDOT) valuation formats including Waiver Valuation may be used in valuation for airport acquisition. The same measures of complexity as discussed in EPG 236.6.2.1 Scope of Assignment will be applied to determine the appraisal format used. An official of the airport acquiring agency will have determined the complexity of appraisal problems prior to contracting, or assigning an appraisal and will indicate in the contract, or instructions, what formats are to be applied to the individual tract appraisals.
Assumptions and Limiting Conditions (Form 6.3.1A) and Certificate of Appraiser (Form 6.3.1B) may be used in valuation for airport acquisition.
B. Summary of Additional Airport Appraisal Requirements
The appraiser or waiver valuation preparer must be familiar with the additional valuation requirements specific to airport acquisition, which include but are not limited to:
  • The property owner shall be invited to accompany the appraiser or Waiver Valuation preparer.
  • There is no provision for separation of function for the same individual to prepare a Waiver Valuation and negotiation to acquire the property.
  • There are non-compensable land costs that may be allowable for compensation under state law, that are non-compensable in acquisition for airports.
  • There are specific instructions in the appraisal of avigation easements and noise avigation easements.
C. Right of Way Section Involvement in Scope of Assignment, Administrative Review and Administrative Settlement Review
To assure quality appraisals, waiver valuations and appraisal reviews, the Right of Way Section will support the Administrator of Aviation, Multimodal Operations Division with scope of assignment considerations and administrative review. When the airport sponsor has obtained a valuation and appraisal review for airport acquisition, it shall be delivered to the Administrator of Aviation and routed to the Right of Way Section for an administrative review. An administrative review is, at a minimum, a desk check of factual data and information presented in the valuation report, a determination that the report fulfills the requirements of this chapter, that the report addresses the special valuation considerations for valuation for airport purposes and provides a quality report with appropriate conclusions.

236.6.4 Appraisal Review and Approval of Just Compensation

236.6.4.1 Purpose

Appraisal review is the act or process of developing and communicating an opinion about the quality of all or part of a completed work performed by another appraiser in a real property appraisal assignment. In performing an appraisal review assignment, an appraiser acting as a reviewer must develop and report a credible opinion as to the quality of another appraiser’s work and must clearly disclose the scope of work performed in the review assignment.

The purpose of this article is to establish procedures and guidelines for the review of appraisal reports and approval of just compensation. The reviewer is responsible to assure that appraisal reports comply with instructions for preparing appraisals as set out in this manual, which incorporates requirements of Federal Highway Administration (FHWA), 23 CFR and 49 CFR, and USPAP, and that they conform to Scope of Assignment requirements and recommendations.

Occasionally reports are to be written and reviewed in conformance to other standards such as Uniform Appraisal Standards for Federal Land Acquisition (UASFLA) or Land Acquisition and Relocation Assistance for Airport Projects and policies/advisory Circulars/150/5100-17 Chapter 2. In these instances the reviewer is responsible to obtain the appropriate documents and follow their requirements in the review process.

236.6.4.2 Assignment of Appraisal Review

Assistant right of way manager certified is the typical resource for review and approval of just compensation. District right of way managers and field liaison officers who are certified may also review and approve just compensation. A district right of way manager may designate any staff certified appraiser to review and approve just compensation.

Commissioner and employee-owned property appraisals must be reviewed and approved by Right of Way Section personnel and by the FHWA (See EPG 236.3.4.13).

236.6.4.3 Review and Approval of Appraisal Reports and Waiver Valuations

Review and approval of appraisals will be accomplished on a Appraisal Review and Approval of Just Compensation document (Form 236.6.4.3). Waiver Valuations will be co-signed by the individual inspecting the document.

The reviewer is responsible to assure compliance with the Scope of Assignment and contract/agreement requirements. The review will verify that all appraisals are complete and correct regarding format utilized, design plans, mathematics, and Appraisal Formats and Instructions for Preparing Appraisal Reports, (See EPG 236.6.3 Valuation Formats and Instructions). Appraisals must also be examined to determine consistency with other appraisals on the project, must utilize the proper number of appropriate sales, and contain appropriate exhibits.

The amount of just compensation as established by the reviewer shall be subject to the approval of the Right of Way Director or the district engineer, as appropriate. In addition to above, the reviewer has the following responsibilities:

A. Field inspect each appraised parcel as well as each comparable sale used by the appraiser during the valuation process, when the acquisition and appraisal is of a complicated nature as to require an examination in the field to fully understand the appraisal problem.
On limited occasions a desk review of appraisals may be permissible. The reviewer must disclose on Form 236.6.4.3 if only a desk review is done.
B. Examine each appraisal report to determine that it:
1. Is compiled in accordance with the Department's appraisal specifications, (See EPG 236.6.3, or other manuals that may apply. (Example: Federal Aviation Administration or Uniform Appraisal Standards for Federal Land Acquisition. See EPG 236.6.3.9 and EPG 236.6.3.10)
2. Is compiled in accordance with accepted appraisal principles and techniques with regard to valuation of real property.
3. Contains or makes reference to information necessary to explain, substantiate, and thereby document conclusions, estimates of value, or just compensation.
4. Offers evidence to support adjustments of comparable sales and depreciation rates, when applicable, or as may be specified within the Scope of Assignment.
5. Addresses all compensable items, damages, and special benefits, if any, and does not include compensation for items noncompensable under Missouri law.
C. When reviewing multiple appraisals on the same project or in the same area, be attentive to inconsistencies in analyses and conclusions which result in widely varying estimates of just compensation for similar acquisitions and/or damages, including unit values, percentage rates for easements, etc.
D. Request and obtain corrections, revisions, additions and/or clarifications to appraisal reports which do not substantially meet requirements set forth in EPG 236.6.3 Valuation Formats and Instructions. Such corrections or revisions shall be attached to and become part of the appraisal report. Requests of an uncomplicated nature may be addressed directly to a staff or fee appraiser. Requests of a complex nature will be made in writing.
E. Complete all applicable portions of Form 236.6.4.3, allocating compensation between appropriate elements and parties, date and sign the document, thereby establishing and/or approving an amount, in dollars, which in the opinion of the reviewer represents the estimate of value or just compensation.
Such opinion will be supported by approval of the appraisal as submitted or as revised to include corrections, revisions, additions and/or clarifications requested and made part of the appraisal report. If reviewer approves a different value, support may come from data furnished in the appraisal report or be developed by the reviewer.
Approval of Just Compensation (Form 236.6.4.3) may be subject to the future receipt of additions and clarification, which will be attached and made part of the appraisal report when received. Completion of the form should indicate what corrections; revisions additions and/or clarifications are being requested.
F. If the reviewer is unable to achieve resolution of the errors or deficiencies found in an appraisal report, the district right of way manager may authorize an additional appraisal of the parcel in question.
G. If a Right of Way Section reviewer performs the review, they shall provide the district one fully executed copy of Form 236.6.4.3.
H. Add addenda to previously submitted reports, maintain a log of appraisal and review activity, and answer correspondence.
I. Submit one copy of Forms 236.6.4.3 and 236.6.4.4 to Right of Way Section. Copies of appraisals are not submitted to Right of Way Section.

236.6.4.4 Adjustment of Value or Just Compensation

In some instances it is necessary to effect changes in previously approved values or just compensation. Occasionally, such revisions are so insignificant it isn't justified to assign an appraiser to realign previously approved appraisals with current conditions. Under such circumstances, the reviewer may adjust the approved offer for needed revisions by completing Adjustment of Value or Just Compensation (Form 236.6.4.4) and forwarding one copy to the Right of Way Section.

It is the intention of this document to provide means of correcting minor differences between previously approved amounts and prevailing conditions. Any revisions proposed by the use of Form 236.6.4.4 shall be of such nature that justification or support therefore may be abstracted from a previously approved appraisal reports. If there is any impact on highest and best use or any other appraisal consideration, the problem should not be handled by a Form 236.6.4.4.

Assistant right of way manager - certified or individuals familiar with the project and appraisals may be designated by the district right of way manager to prepare and sign the Form 236.6.4.4, providing adequate explanation and support for the necessary adjustment.

236.6.4.5 Review of Specialty Appraisal Reports for Equipment or Specialty Items

A. The review of separate valuations of machinery, equipment, trade fixtures, or other specialty items, carries the following responsibilities:
1. Field inspect appraised items and then examine each appraisal report to determine that it contains:
  • statement of purpose of report.
  • definition of value(s) reported, i.e., in-place value, salvage value, etc.
  • identification of property and its ownership of record.
  • statement of appropriate contingent and limiting conditions, if any.
  • identification of the value problem.
  • an estimate of values.
  • accepted principles and techniques for the valuation of the subject of the report.
  • consideration of compensable items and that report does not include compensation for noncompensable losses.
  • data and analysis to explain, substantiate, and thereby document estimate of values.
  • date of inspection and effective date of value.
  • route, county, project number, job number, parcel number, certification, signature and date of signature of Specialty Appraiser.
  • photographs and any other necessary descriptive material.
2. Request and obtain corrections or revisions of specialty appraisal reports which do not substantially meet above criteria.

236.6.5 Contracting with Fee Appraisers

236.6.5.1 Qualifications for Realty Appraisers

Real estate appraisers employed under contract by the Missouri Department of Transportation (MoDOT) shall be State certified and in good standing with the Missouri Real Estate Appraisers Commission, must enjoy a good professional reputation, and must be able to provide acceptable evidence of specific appraisal experience in the type of property that is to be appraised of adequate complexity to demonstrate the applicant’s level of competency and ability to perform.

236.6.5.2 Qualifications for Specialty Appraisers

From time to time, it is necessary to contract for the services of individuals or companies who are well qualified to evaluate machinery, equipment, or other specialty items. Specialists performing services of this nature may be members of appraisal or engineering firms whose principal occupation is the appraisal of specialty items, contractors who are engaged in the installation of such items or equipment, suppliers, or dealers who are familiar with the valuation of given specialty items or equipment. Each person performing such services shall be fully qualified to offer an opinion of value in addition to being capable of submitting written information which is essential to explain, substantiate, and thereby document his or her opinions in accordance with accepted appraisal principles and techniques.

236.6.5.3 Application for Employment as Contract Appraiser

All contract appraisers not previously approved by Right of Way Section who are desirous of contracting appraisal work must submit an Application for Employment (Form 236.6.5.3) as a contract appraiser. District right of way shall perform an investigation to determine the qualifications and abilities of the applicant and the appraiser’s general reputation within the profession. All references shown on the application shall be contacted in person or by telephone. All applicants must be recommended by at least two references. After the investigation is completed and the district right of way manager is satisfied with the applicant's qualifications, the district shall transmit to Right of Way Section its recommendation together with one copy of the application, one copy each of two dissimilar appraisal reports, and such other exhibits considered pertinent to the approval process. The Right of Way Section will review the application material to determine the applicant's qualifications. The Right of Way Section will advise the district in writing, if an applicant is approved for

  • all types of appraisal assignments
  • limited appraisal assignments
  • specialty appraisal work
  • review appraisal work
  • is rejected for lack of qualifications or other causes.

Notice of Approval or Rejection of Application

The Right of Way Section shall notify the appraiser of approval. The Right of Way Director, if necessary, shall send a rejection notice to the applicant. With notice of approval, the appraiser shall be advised how to access the MoDOT electronic manuals.

Duration of Approval of Fee Appraisers on the Roster of Approved Appraisers/Reviewers

Duration of approval on the Roster of Fee Appraiser/Reviewers is 3 years. A renewal application will be sent to each appraiser/reviewer 2 months prior to their 3 year expiration date as contained in MoDOT’s database. The renewal application will seek to determine the applicants desire to remain on the list and also to capture updated information including address, phone numbers, email addresses and areas of the state the applicant is interested in performing work. Renewal dates are contained on the Roster of Approved Contract Appraisers. If you have any questions you can contact the Right of Way Section of MoDOT's Design Division.

236.6.5.4 Roster of Approved Contract Appraisers

A Roster of Approved Contract Appraisers shall be maintained by the Right of Way Section in an electronic database, listing all approved contract appraisers, and indicating the types of appraisal assignments for which each appraiser is approved.

Sample reports submitted by rejected applicants will be retained, at least those sections that contributed to the rejection.

236.6.5.5 Employment of Contract Appraisers

All contracts for appraisal or appraisal review services shall comply with statutory, MoDOT and E-Verify requirements when applicable. Please refer to EPG 236.3.11 Contracting with MoDOT and E-Verify Requirements for more information.

District right of way is authorized to negotiate or seek proposals for fee appraisal services as needed. The availability of qualified contract appraisers varies by location time period and current economic circumstances. MoDOT policy provides for both the solicitation of competitive proposals and for non-competitive or negotiated contracting (see EPG 236.6.5.9). The availability of qualified appraisers and project time constraints may determine the bid process that will be followed.

236.6.5.6 Selecting Prospective Contract Appraisers

District right of way may select currently approved appraisers from whom proposals are to be solicited. Every effort shall be made to select the most qualified appraisers available for the particular assignments. Consideration should be given to anticipated appraisal problems, experience, past performance, pending appraisal contracts, etc. The district shall contact by letter, telephone, or in person each of the selected appraisers to learn if they are interested in submitting proposals for the required work. All contacts by telephone or in person shall be documented in the district file to show party contacted, date of contact, a brief summary of the conversation and the conclusion of competitive or non-competitive contracting.

236.6.5.7 Preparation of Proposals and Submission to Appraisers

The appraiser will be provided a copy of the Proposal for Appraisal Work (CCO RW 16), Appraisal Agreement (CCO RW 17), EPG 236.6.2 Scope of Assignment and project plans. The Scope of Assignment shall identify the required formats and approaches to value, before and after valuation if required, and any other requirements to communicate the scope of the assignment.

The fee appraiser shall be provided with and advised to become familiar with:

As appropriate, the appraiser shall also be provided with the following information.

Each prospective appraiser must be completely familiar with all aspects of proposed appraisal assignment. A member of the district right of way staff shall be available to accompany prospective appraisers during a field review of each parcel if requested, in order to acquaint them with project plans, rights to be appraised, and any unusual appraisal problems that may be encountered. It should also be clearly understood that the appraisers will or will not value items of equipment or machinery which are considered realty but offer minimal contributory value to the property. Should any parcel contain equipment or machinery, requiring the services of a specialty appraiser, the prospective real estate appraiser shall be advised that a copy of the specialty appraisal will be furnished for inclusion within the real estate appraisal report.

In some instances, as provided by the contract, the appraiser shall furnish a contractor's estimate of cost to cure items, replacement costs of unusual structural improvements, sewer systems, etc. Contractors or specialists employed by the appraiser to perform such services must be approved in writing by the district engineer.

NOTE: A contractor shall not be approved to perform identical services for two appraisers when both are appraising the same parcel.

The appraiser shall be requested to submit proposal(s) setting forth fees for each individual parcel.

236.6.5.8 Competitive Proposals for Contract Realty Appraisals

When the competitive proposal process for contracting realty appraisals is utilized, the district shall make a reasonable effort to secure proposals from those approved appraisers who have demonstrated expertise to accomplish the proposed appraisal assignments, by notification of a pending project requiring the services of fee appraisers.

It should be noted that appraisal contracts are to be awarded to the lowest and best bid. The term "lowest" pertains strictly to the dollar amount of the proposal. The term "best" takes into consideration the issue of timeliness, or delivery date, the comparative level of experience of the bidders, and also the past records of individuals with respect to quality of work product and adherence to contractual requirements and deadlines. In other words, though important, mere submission of the lowest cost proposal will not, in and of itself, assure that bidder of being awarded a particular contract.

Projects or sections thereof containing parcels that require only one appraisal shall be awarded to the lowest and best bid.

Projects or sections thereof containing fee holds requiring two appraisals shall be awarded to the two bids that are considered lowest and best.

A. Proposals From Contract Appraisers
Proposal for Appraisal (CCO Form RW 16) work shall be used by the appraisers for submission of their proposals. The district shall complete all portions of proposal except fees, date, and signature of appraiser. An envelope directed to district right of way shall be provided with a notation prominently displayed "Proposed Appraisal Fees - Do Not Open." One copy of each proposal together with the envelope shall be given to each appraiser. Every appraiser should be admonished not to add or delete any terms or conditions or amend the proposal in any way. Altered or amended proposals will be rejected at the time of opening.
The district right of way manager may arrange with the prospective appraiser for electronic submissions of proposals directly to the district support services manager. Faxed submissions of proposals shall not be accepted because confidentiality cannot be maintained.
All proposals received at by district right of way shall be retained by the district support services manager until time of opening.
B. Opening Of Proposals, Checking Tabulations And Preparing Contract
District right of way personnel and/or the district administrative services supervisor shall open all proposals at the prescribed time. Personnel supervising the opening shall publicly announce to all in attendance the amounts recited in each proposal.
Right of way personnel shall subsequently check the tabulations for accuracy and then compare the results. If the total amount shown in the lowest and best proposal is acceptable, the district may prepare an appraisal contract in favor of the party submitting such proposal. Contracts must contain the same provisions as proposal. District right of way shall then submit to the district engineer three copies of appraisal contracts as executed by the selected bidders and one copy of proposal as received from each bidder. The District engineer shall review subject data and cause the contract to be approved or rejected.
If the lowest and best proposal is found unacceptable, the district has the option to proceed with the lowest and best bid or reject all proposals and re-solicit in an effort to secure more acceptable appraisal fees.

236.6.5.9 Non-Competitive Proposals for Contract Realty Appraisals

The district shall select appraisers from the current roster of approved appraisers. Every effort shall be made to select the most qualified appraisers available for the particular job. Consideration should be given to anticipated appraisal problems, talents, skills possessed by the individual, appraiser's past performance, pending appraisal contracts, etc. District personnel shall contact the selected appraiser to determine their availability to complete the work within a specified time.

All contacts shall be documented in the district file to show party contacted, date of contact, and brief summary of the conversation. Each prospective appraiser must be made completely familiar with all provisions of the appraisal contract, appropriate instructions for preparing appraisals, and any other requirements necessary for the completion of the appraisal assignment.

After the appraiser has been made aware of all facts regarding the prospective appraisal assignment, the district shall request a proposal setting forth a fee for each parcel (use form CCO RW 16).

The proposal must be dated, signed, and submitted to district right of way.

The district right of way manager or a designated representative shall review each proposal to determine if reasonable fees are being proposed. Should it be determined that the proposed fees appear excessive, the district right of way manager or designee shall negotiate with the appraiser in an effort to achieve acceptable fees. In the event negotiations fail to produce acceptable fees, the district has the option to negotiate with another appraiser or initiate the competitive bid process.

When acceptable fees are reached, the district may prepare an appraisal contract in favor of contract appraiser for execution by the district engineer. The district engineer shall review subject data and cause contract to be approved or rejected. The contract must contain the same provisions as the proposal, such as, authorization to estimate contributory value to unaffected improvements, furnishing specialty appraisal for inclusion in realty appraisal report, etc.

One copy of the fully executed appraisal contract shall be sent to the Right of Way Section and a copy retained in the district files. The third copy is to be given to the contract appraiser, together with a current set of highway plans and such other data necessary to fulfill the contract. At that time, the appraiser shall also be given a written notice to proceed, stipulating the date on which he/she may begin working on the project.

236.6.5.10 Contracting Specialty Appraisals

A Specialty Appraiser shall be employed, using a Specialty Appraisal Agreement (CCO RW 19) when necessary.

Persons or firms offering such services may be so limited that competition is nonexistent. If, however, there is a competitive market, proposals shall be solicited in the same manner as defined for realty appraisals. When open competition does not exist, the district shall contact available specialty appraisers for the purpose of soliciting proposals for the appraisal of machinery, equipment, trade fixtures, or other specialty items.

Being listed on MoDOT’s current Roster of Approved Appraisers is not required. Every effort shall be made to secure the most qualified person for the proposed assignment.

District personnel shall be available to accompany the prospective appraiser in the field review of items to be appraised and to explain the specifications and requirements of the contract, completion time, etc. After being made fully aware of all requirements, the prospective appraiser shall submit to the district a statement setting forth a proposed fee for the specialty items of each parcel. District personnel shall review the proposal and if acceptable, prepare and submit to the appraiser a Specialty Appraisal Contract. The contract must contain the same provisions as the proposal that was submitted. Upon return of the executed contract from the appraiser, district right of way shall then submit to the district engineer three copies of the contract, as executed by the appraiser. The district engineer shall review subject data and cause the contract to be approved or rejected.

236.6.5.11 Supplemental Appraisal Contracts

Subsequent to the submission and/or acceptance of fee appraisals, it sometimes becomes necessary, due to plan changes or time lapse, to request reappraisals or updates. If such services are required, they are to be secured in cooperation with the fee appraiser by processing a supplemental appraisal Supplemental Appraisal Agreement (CCO Contract RW 18).

236.6.5.12 Distribution of Fully Executed Appraisal Contracts

One copy of the fully executed appraisal contract shall be sent to the Right of Way Section. One copy must be retained in the district file and the third copy is to be given to the contract appraiser together with a current set of highway plans and other data necessary to accomplish the contract. At that time the appraiser shall also be given a written notice to proceed, stipulating the date on which the appraiser may begin working on the project.

236.6.5.13 Fee Appraiser Performance Evaluation

The fee appraiser is to be made aware that their overall performance will be carefully evaluated and that failure to perform at an acceptable level can result in their removal from MoDOT’s list of approved appraisers. The appraiser must be rated after completion of each contract on which shortcomings or problems arose in the contract experience. The object of this evaluation is to document less-than satisfactory performance, not continually attempt to rate consistent satisfactory performance.

For the evaluation process to be meaningful all answers must accurately reflect the conclusions of the person completing the form, based on a thorough analysis of the fee appraiser's performance on that specific contract.

Some questions may require more than a simple yes or no answer. If that is the case the comments should be written on a separate page and attached to the evaluation report.

Properly used the Fee Appraiser Performance Evaluation (Form 6.5.13) can be of considerable value to MoDOT in effectively managing contract appraisal work. It is intended to serve as the documentary basis for the retention or dismissal of fee appraisers. If an appraiser is to be removed from the roster of approved appraisers based on poor performance they must be notified in writing by the Right of Way Director.

The Fee Appraiser Performance Evaluation is strictly for MoDOT’s internal use and is not to be given to fee appraisers.

A. Distribution Of Evaluation Form:
Upon completion of the Fee Appraiser Performance Evaluation, it is to be signed by the reviewer or district right of way manager, and a copy provided to the Right of Way Section.
The evaluation form will be retained in the fee appraiser's permanent file in the Division office.
B. Notification To Fee Appraiser Of Unsatisfactory Performance
If it is concluded by both district and Division reviewers that the appraiser’s work falls below an acceptable level in terms of quality and/or timeliness, a letter signed by the Right of Way Director shall be mailed to the contract appraiser advising that performance was found to be unsatisfactory. A copy of this letter is to be maintained in the appraiser's permanent file at Right of Way Section.
Suggested language for this is: “Attached please find a Fee Appraiser Performance Evaluation that has been completed as a result of your appraisal contract and activity on _______________. This is your notice of unsatisfactory performance in the completion of that contract. This evaluation will be kept as part of your permanent file.”
C. Notification To Fee Appraiser Of Removal From Roster Of Approved Contract Appraisers
1. Removal from Roster After Unsatisfactory Performance
If, after receiving a letter notification of unsatisfactory performance, the appraiser’s work on a subsequent contract results in an evaluation with a recommendation of unsatisfactory performance or removal from the Roster of Approved Appraisers a letter signed by the Right of Way Director shall be mailed to the contract appraiser advising that they have been removed from the Roster of Approved Appraisers in accordance with MoDOT policy.
2. Removal From Roster After First Contract
Special circumstances may warrant a recommendation for the removal of an appraiser from the Roster of Approved Contract Appraisers as a result of the first evaluation. In such case the appraiser may be notified of removal without prior notification of unsatisfactory performance.
3. Concurrence From Chief Counsel on Removal From Roster
Consideration should be given to the appraiser's involvement with other districts and LPA's as well as the disposition of cases where the appraiser might be expected to be a witness when determining the timing of removal from the Roster of Approved Contract Appraisers.

236.6.6 Appraisal Agreements

236.6.6.1 Appraisal Agreement

All fee appraisers performing appraisal work for MoDOT shall do so by authority of a contractual agreement. An Appraisal Agreement (CCO RW 17) is available. District right of way managers shall assure that each agreement contains: name and address of appraiser, parcel number for each parcel to be appraised, route, project, county, number of calendar days in which to complete the contractual work, a specific appraisal fee for each parcel, the personal services of given individual, signature of appraiser, and date appraiser signed proposed agreement. Appraisal agreements with companies, firms, or corporate entities shall designate a given individual who shall perform the valuation services. All appraisal agreements with companies, firms or corporate entities shall be executed by an officer of such entity and the individual identified as the individual who shall be performing the valuation service. Each appraisal agreement shall contain all appropriate attachments (see list at EPG 236.6.5.7).

236.6.6.2 Supplemental Appraisal Agreement

A copy of the Commission's Supplemental Appraisal Agreement (CCO RW 18) is available. This document is designed to minimize administrative efforts when it becomes necessary to add additional parcels to the original Appraisal Agreement, reappraise certain parcels, update, or secure addenda to the original appraisal reports.

The Supplemental Appraisal Agreement refers to specifications as recited in original Appraisal Agreement so it becomes imperative that such requirements and specifications are effective at the date "new" parcels are added to the original agreement. New parcels shall be construed to mean tracts not previously appraised or formerly appraised parcels where the plan or ownership revisions are so acute as to nullify the original appraisal report. Updating or addenda to the original appraisals shall not be subject to subsequently revised appraisal specifications.

Supplemental Appraisal Agreements shall contain: name, signature, date of signature by appraisal contractor (signature must be exactly the same as shown in original agreement), contractor's address, date of original agreement, route, project, and county. Supplemental Appraisal Agreements shall also recite parcel numbers, type of appraisal data designated, such as appraisal, update, addendum, etc., and the fee to be paid for each parcel. When adding "new" or additional tracts to original Appraisal Agreement, the supplement must specify type of appraisal format required and approaches to value concurrent with standard appraisal format. Also a calendar period or time frame in which the work is to be completed must be specified.

Three copies of Supplemental Appraisal Agreement, as signed by the proposed contractor shall be submitted to the district engineer. The district engineer shall review all contents of proposed Supplemental Appraisal Agreement and subsequently approve or reject the proposal. Should the Supplemental Agreement be approved as submitted, the district engineer will execute the documents. One fully executed copy shall be returned to the contractor, one copy shall be retained in district right of way and one shall be submitted to the Right of Way Section.

236.6.6.3 Specialty Appraisal Agreement

The Specialty Appraisal Agreement (CCO RW 19) is available and shall be employed when it becomes necessary to contract for the services of specialty appraisers. Such specialized services may become necessary when evaluating machinery, equipment, and appurtenances situated within or upon premises being appraised by real estate appraisers.

The district right of way manager shall assure that each proposed agreement contains: name and address of contractor, number of calendar days in which work shall be completed, route, project, county, tract number or numbers, owner's name, and fee to be paid for each parcel. The agreement shall include an appropriate Certificate of Appraiser (Form 236.6.3.1B). The proposed agreement shall also recite the individual's name that shall perform the valuation services, contractor's signature, the state in which incorporated (if corporate entity), and the date of execution by the contractor.

Three copies of Specialty Appraisal Agreement, as signed by the proposed contractor shall be submitted to the district engineer. The district engineer shall review all contents of proposed Specialty Appraisal Agreement and subsequently approve or reject the proposal. Should the Specialty Appraisal Agreement be approved as submitted, the district engineer will execute the documents. One fully executed copy shall be returned to the contractor, one copy shall be retained in the district right of way and one shall be submitted to the Right of Way Section.

236.6.7 Highway Beautification Program Billboard Valuation

236.6.7.1 General

Statutes of State of Missouri provide the Commission with authority to acquire certain off-premise outdoor advertising signs and junkyards without an associated acquisition project. Such authority is provided for the purpose of controlling signs adjacent to the National Highway System to promote highway safety, convenience and enjoyment of highway travel, and to preserve the national scenic beauty of highways and adjacent areas. As this program is executed, it will become necessary to appraise certain realty rights sought by the Highways and Transportation Commission.

236.6.7.2 Appraisal Format for Billboards and Sites

Use the Standard Format Appraisal and see EPG 236.6.1.D. 2, Billboard Valuation for instructions. Each appraisal report shall have attached Assumptions and Limiting Conditions (Form 236.6.3.1.A) and Certificate of Appraiser (Form 236.6.3.1.B).

If a scenic easement is to be acquired, Scenic Easement (Form CCO RW 5A) for the terms and conditions that will be applied to the property and determine value accordingly.

Valuation for sign site shall be determined by capitalizing economic rent. Such rents may be estimated from three comparably leased premises. Use Comparable Lease (Form 236.6.3.5.C) to indicate pertinent leasing data.

236.6.7.3 Specialized Services and/or Estimates

During the appraisal of certain signs, it may become advantageous to secure the services of specialized personnel or companies to advise as to cost of such items as electrical systems, unusual pictorial art, etc. Should the need for such services arise, the district right of way manager or their designee may inquire of two companies offering such services in an effort to determine approximate fees for the desired information. The district right of way manager shall then submit such proposals to the Right of Way Section for approval or rejection. Subsequently acquired cost data shall be reviewed by assistant right of way manager - certified, and if found acceptable, submitted to an appraiser for analysis and incorporation into appraisal document to the extent deemed appropriate by the appraiser.

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