KO Appraisal
Guide

Condemnation appraisal

A condemnation appraisal is the independent valuation prepared for property a condemnor is taking, or has already taken. Condemnation and eminent domain describe the same proceeding from different angles. In California the condemnor is usually a public entity, but public utilities and certain quasi-public entities hold the power under separate statutes as well. What separates this appraisal from an ordinary one is that the standard of value, the valuation date, and what may be counted as compensable are all set by statute rather than by the market alone.

The agency has to offer to pay for your appraisal

This is the provision property owners most often do not know exists. Under Code of Civil Procedure §1263.025(a), when a public entity offers to purchase property under a threat of eminent domain, it must, at the time it makes that offer, offer to pay the reasonable costs, capped at $5,000, of an independent appraisal the owner orders. The appraisal has to be performed by a licensed appraiser for the cost to be reimbursable.

The trigger is a defined term, and it is broader than most owners assume. Subdivision (b) treats an offer as made under a threat of eminent domain where it is made pursuant to eminent domain, or following adoption of a resolution of necessity under §1240.040, or following a statement that the entity may take the property by eminent domain. No condemnation action need have been filed. If an agency has told you it may condemn, the provision is already in play.

The practical effect is that obtaining your own valuation is usually far cheaper than owners assume, and frequently costs nothing at all. Given that the agency’s offer is based on the agency’s appraisal, commissioned by the party that wants to pay less, declining an independent look is rarely the right call.

What the agency must give you, and how to read it

Before adopting a resolution of necessity and beginning negotiations, a public entity is to establish an amount it believes to be just compensation and make a written offer for the full amount, under Government Code §7267.2(a)(1). Subdivision (b) then calls for a written statement and summary of the basis for that amount, in enough detail to show clearly how it was arrived at, including at least the date of valuation, the highest and best use, and the applicable zoning.

One important qualification, because it is easy to over-read. Section 7267 directs public entities to follow §§7267.1 to 7267.8 "to the greatest extent practicable", and §7274 provides that nothing in those sections creates rights or liabilities or affects the validity of an acquisition. So this is procedure binding on the agency, not a private entitlement you can sue over. In practice the summary is usually provided, and it remains the most useful document you will receive, but if it is thin, the remedy is to press the agency and build your own record, not to treat it as a violation.

Those three items are where a disagreement usually originates, and they are worth reading before anything else in the packet. A highest and best use stated as the current use, on a parcel whose zoning permits considerably more, is the single most common reason an agency’s number is low. The property is being valued for what it is rather than for what it could reasonably become.

The statutory standard, which is not the ordinary one

Code of Civil Procedure §1263.310 requires that the owner be paid just compensation, and §1263.320 defines the measure as fair market value, the highest price the property would bring on the open market, with both buyer and seller acting willingly and knowledgeably, and the property given reasonable exposure.

Two consequences follow that surprise owners. The first is that value is determined by what the property is worth to the market, not what it is worth to you, sentimental attachment, relocation inconvenience, and the disruption of being made to move are not components of fair market value. The second is that the project itself is generally disregarded in setting the price: the property is valued as though the project requiring the taking were not happening, so neither the increase nor the decrease in value the project caused belongs in the number.

Partial takings, where the real money usually is

Where an agency takes only part of a parcel, compensation is not simply the value of the strip taken. Under §1263.410 the owner is also entitled to severance damages, the injury to the remaining property caused by the taking and by the construction and use of the project in the manner proposed.

This is where partial-taking cases are won and lost, and where an agency’s appraisal is most often thin. A road widening that removes twelve feet of frontage may also eliminate the parking that made a retail building viable, sever access to a loading dock, or leave a remainder too shallow to redevelop under current setback rules. The land taken might be worth very little; the injury to what remains can exceed it by a wide margin.

  • Loss of access, or a change from direct frontage to a circuitous approach.
  • Loss of parking, where the remaining count no longer supports the use or satisfies the code.
  • A remainder left in a shape, size, or grade that constrains what can be built on it.
  • Proximity effects from the completed project, noise, light, or loss of visibility, where they affect market value rather than merely comfort.
  • Offsetting benefits, where the project confers a special benefit on the remainder, which the statute allows to be set against damages.

The date of valuation is fixed by the proceeding

A condemnation appraisal is not a valuation as of today. The valuation date is set by statute according to the stage the proceeding has reached, and using the wrong one produces a number that answers no question anyone is asking. It is confirmed in writing before the work starts, and it is the first thing to check on the agency’s appraisal as well. §7267.2(b) requires the agency to disclose the date it used.

What a defensible condemnation appraisal has to survive

These reports are examined by opposing counsel and, frequently, by an opposing appraiser retained to attack them. What holds up is not confidence in the conclusion but the quality of its support: a reasoned highest and best use conclusion rather than an assumed one, comparable sales verified with a party to the transaction, adjustments that can be traced to market evidence, and a severance damage analysis that identifies the specific injury rather than asserting a percentage.

The appraiser should also expect to testify. A report written knowing it will be examined in deposition is documented differently from one written for a file, and that difference is visible on the page.

Common questions

I just received an offer letter from a public agency. What should I do first?
Ask for the Government Code §7267.2(b) written statement and summary of the basis for the offer, and note three things: the date of valuation, how the appraiser defined highest and best use, and the applicable zoning. Those are where disagreements usually begin, particularly a highest and best use stated as the current use on a parcel zoned for more. Note that §7274 provides these sections create no rights or liabilities, so the summary is agency procedure rather than something you can compel; in practice it is normally supplied. Do not treat the offer as a final number, it is the agency’s opening position, supported by the agency’s appraisal.
Will the agency pay for my appraisal?
It must offer to, if the statutory trigger is met. Code of Civil Procedure §1263.025(a) requires a public entity offering to purchase under a threat of eminent domain to offer, at the time of that offer, to pay the reasonable costs, up to $5,000, of an independent appraisal you order, performed by a licensed appraiser. Subdivision (b) defines the threat broadly: an offer made pursuant to eminent domain, or after a resolution of necessity under §1240.040, or after a statement that the entity may take the property. Nothing need be filed. Confirm the current cap when you ask, since the figure sits in a statute the Legislature can amend.
The agency is only taking a strip of my land. Is that all they pay for?
No. On a partial taking you are entitled under §1263.410 to severance damages for injury to the property you keep, caused by the taking and by the project as proposed. The strip itself may be worth little while the damage to the remainder is substantial. Lost parking, lost access, or a remainder that can no longer be developed. This is the part of the claim most often understated.
Can I be compensated for having to move my business?
Not as part of fair market value, which measures what the property is worth on the open market rather than what the move costs you. Relocation assistance and business loss are addressed through separate statutory schemes with their own requirements, so they are worth raising with your attorney as distinct claims rather than expecting them inside the appraisal.
Does the project itself count toward what my property is worth?
Generally not. The property is valued as though the project requiring the taking were not occurring, so neither an increase in value caused by the project nor a decrease caused by it belongs in the figure. This prevents an agency from depressing values by announcing a project and then paying the depressed price.
Who wrote this Kevin O'Brien, MAI, SRA. California Certified General Real Estate Appraiser #3005065, issued by the California Bureau of Real Estate Appraisers (BREA). Practicing in San Diego. This page reflects how these assignments are actually handled, not a summary of other people's summaries.
Where this applies Appraiser licensing is state-specific, there is no national appraisal licence, so appraisal engagements here are California properties, primarily San Diego County. The valuation methodology and the federal tax rules described above apply anywhere in the United States; if your property is in another state, you need an appraiser credentialed there, and this page should still tell you what to ask them for.

Sources

Every statutory and regulatory claim on this page traces to one of the following. Where a source could not be confirmed, the claim was removed rather than softened.

  1. Cal. Code Civ. Proc. §1263.025(a): public entity shall offer to pay the reasonable costs, not exceeding $5,000, of an independent appraisal ordered by the owner; appraiser must be licensed. Verified 2026-07-29.
  2. Cal. Code Civ. Proc. §1263.310: the owner shall be paid just compensation. Verified in an earlier pass.
  3. Cal. Code Civ. Proc. §1263.320: just compensation measured as fair market value. Verified in an earlier pass.
  4. Cal. Code Civ. Proc. §1263.410: severance damages for injury to the remainder on a partial taking. Verified in an earlier pass.
  5. Cal. Gov. Code §7267.2(a)(1): public entity shall establish an amount believed to be just compensation and make a written offer before adopting a resolution of necessity. Verified 2026-07-29.
  6. Cal. Gov. Code §7267.2(b): written statement and summary of the basis for the offer, containing at least the date of valuation, highest and best use, and applicable zoning. Verified 2026-07-29.
  7. Cal. Gov. Code §7267 and §7274: §7267 directs entities to follow §§7267.1–7267.8 "to the greatest extent practicable"; §7274 provides those sections create no rights or liabilities and do not affect the validity of an acquisition. The §7267.2 procedure is therefore binding on the agency but is not a private entitlement. Verified 2026-07-29.
  8. Cal. Code Civ. Proc. §1263.025(b): defines "under a threat of eminent domain" as an offer made pursuant to eminent domain, following a §1240.040 resolution of necessity, or following a statement that the entity may take the property. No filing required. Verified 2026-07-29.

Related reading

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