La. Admin. Code tit. 70 § XVII-503

Current through Register Vol. 50, No. 11, November 20, 2024

Section XVII-503 - Overview of the Purpose of the Appraisal and Appraisal Requirements

A. The laws of Louisiana provide that compensation must be paid for the value of real property or rights taken. The value of the real property or rights taken must be based on the premise of the highest and best use or the most profitable, legal and likely use for which a property may be utilized. The opinion of such use may be based on the highest and most profitable continuous use for which the property is adapted or likely to be used for a reasonable future time. However, elements affecting value which depend upon events or a combination of events which, while possible, are not reasonably probable, should be excluded from consideration. Also, if the intended use is dependent upon an uncertain act of another person, the intention cannot be considered.

B. The appraiser should perform an analysis of the market demand giving consideration to the highest and best use. Where a property is composed of more than a single highest and best use, the appraiser must type, value and support each portion separately, i.e., front land/rear land highest and best uses. Where different use and values of property are being acquired, each use and corresponding value must be stated separately thereby complying with the state laws and compensating for the full value of the partial acquisitions. Based on the highest and best use, the appraiser must set forth a reasonable and factual explanation indicating his/her support, reasoning and documented conclusions.

C. All market data, comparable sales, forms, etc., which are referred to within the report and are pertinent to the fair market value of the property being appraised, shall be collected and cited for the project and ownership for which the appraisals are being written. Simply referring to data used for other projects or appraisals is not acceptable.

D. All recognized appraisal procedures and approaches to value: the cost approach, the market approach and the income approach, which apply to the property under appraisement, are to be considered by the appraiser and utilized if found to be applicable. If an approach is found not applicable to the property being appraised, there shall be included a concise and detailed reasoning as to its shortcomings. The appraiser shall explain the reason(s) in the correlation of value as to why one or more approaches are more applicable to his/her estimate of market value and/or why the other approach or approaches are less applicable to the property being appraised.

La. Admin. Code tit. 70, § XVII-503

Promulgated by the Department of Transportation and Development, Office of Real Estate, LR 25:882 (May 1999), amended LR 29:2857 (December 2003), LR 33:1370 (July 2007).

AUTHORITY NOTE: Promulgated in accordance with R.S. 48:443.