A Few Rules About Comparable Sales and Leases in Eminent Domain Cases

An appraiser may take into account any sale or contract to sell, or a lease regarding the property being condemned or comparable property, if freely made in good faith and occurred before the filing of the lis pendens. [Evid. Code §§ 815, 816, 817]  Note that forced sales of property — such as those under auction, execution, bankruptcy or foreclosure—are generally not considered “freely made” and are thus not to be considered.  [Redev. Ag. v. Zwerman (1966) 240 Cal.App.2d 70, 74-75]

An eminent domain appraiser may not generally consider as evidence of value:

  • the price or terms regarding the sale of property to a public agency with the power of eminent domain, where it was acquired for a public use (even if eminent domain was never threatened or even mentioned). 
  • The price at which an offer or option to purchase or lease the property was made (including bids made in bankruptcy proceedings). 
  • The assessed value of property.
  • Appraisals of property other than the property being valued.
  • The capitalized value of the income from property other than the property being valued.
  • Bankruptcy sales of comparable property.

[Evid. Code 822]

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