Non Real Estate Report Format Guidelines
Interim Revision 9/20/2003
Non-Real Estate (NRE) or Specialist reports cover unique real estate valuation issues such as building severance (partial demolition of buildings), architectural studies, machinery cost estimates and cost to cure estimates (replacement parking spaces, wells and septic systems). Cure reports are used to mitigate damages caused by acquisitions and are also used by the owner in planning and obtaining approvals for reconstruction or restoration of items damaged by the acquisition.
REPORT STANDARDS Reports must meet NJDOT standards and be delivered in a timely fashion. In completing your report you must adhere to the standards and ethics applicable to the professional discipline utilized in the report. NRE reports are used in litigation and need to be a quality product. Each report is for a single property unless otherwise approved by ROW. The report is your personal work product (not a firm or partnership). You should be prepared to testify regarding your conclusions and their underlying support in condemnation proceedings. The words applicable and appropriate are used where the item is not needed in all types of reports. It is your responsibility to incorporate all items that are germane to your report.
CONFORMANCE WITH LEGAL AND LOCAL CONDITIONS All reports are required to take into account and discuss any laws, local ordinances, zoning, etc. that impact on the valuation question. Any cure requiring site plan approval or other permits must be discussed with the appropriate governmental officials (i.e. Zoning, Building Code officer, Fire marshal, etc.) to determine if there is a reasonable probability that the governing body will approve the proposed cure. The report must specify with whom the issue was discussed and when that meeting took place.
VALUATION must be fair, reasonable and supported by market data. The cure should note the source of the valuation information. The valuation or cost is based on the cost of the item on the inspection date or the complaint date. Cost to cure report should include the typical approval costs, soft costs and construction costs the owner would incur to implement the cure.
CHANGE OF USE Any potential change in use, either one initiated by the owner or recommended by the specialist to minimize damages should be discussed with the ROW Office.
NJDOT MAP CHANGES Any proposed cure that requires a change in the State’s proposed acquisition, construction or access plans must be discussed with ROW as soon as the issue arises.
FIELD INSPECTIONS verify the actual onsite condition of the subject. The use of maps and aerial photographs in lieu of an inspection is not acceptable. For initial reports, the Specialist normally provides a written invitation to the owner to accompany him on a site inspection. Include a copy of the inspection letter and state in the report who was present at the inspection. The inspection is the opportunity to discuss conditions unique to the property (peak parking demand, truck deliveries, facility operations, etc.) with the owner. For complicated cases, it is recommended that the NRE consultant coordinate with the appraiser.
NRE DELIVERIES Quality and timeliness are important criteria in judging the success of the NRE consultant. All reports are to be produced in quintuplicate. At least two weeks prior to delivery of your report, you are to provide the ROW Office with an initial submission of the report for review purposes. The balance of the reports are to follow with any needed corrections.
CORRECTIONS, REVISIONS AND ADDITIONS If requested by ROW, you shall furnish any corrections or revisions in a timely fashion. If you discover a need to revise your report, the revision must be delivered to and accepted by the District Manager as a formal revision of the original NRE report.
QUESTIONS REGARDING THE ASSIGNMENT should be directed to the assigning ROW office.
The following are the typical elements of an NRE report. Reports should use all applicable sections and exhibits. Prepare reports in 8.5 x 11 inch format with a binding system that allows for replacement pages.
SECTION I. Letter of transmittal addressed to District Manager, ROW This is a one page letter transmitting the report to the NJDOT on your letter head with the elements shown below:
On each page after the Letter of Transmittal, place a header or similar section that identifies the Route, Section, Parcel, Owner and name of specialist making the report. Number all pages except the letter.
SECTION II. Scope: Provide a statement as to the purpose of the report and the methodology you will use to investigate this problem. Identify the source of any applicable cost and depreciation information.
SECTION III. Existing Condition: Provide applicable narrative descriptions of any buildings, their function and condition and any site improvements (landscaping, parking). Where appropriate consider and discuss zoning and other legal constraints and determine if the subject property has or will obtain site plan approvals or is in conformity to zoning. If appropriate to this report, discuss site drainage and utilities. When applicable describe and discuss the impact of any encroachments or legal use of adjoining properties.
For parking cures, note any illegal parking spaces as well as any spaces which are either encroaching on other lands or which would generally not be recognized as safe. These spaces should be discussed and also indicated on the plans. Appropriate deductions from the cost to cure to create legal or “safe” parking should be considered. For building severance reports, the specialist should note the building’s functionality (use).
SECTION IV. Cost to Cure Narrative (used for physical cures)Provide a narrative description of the problem and the best available cost effective cure (if any):
Where a cure is possible describe the problem and discuss the proposed cure and its feasibility. This includes the impact of the cure on the continuing function of the property (parking circulation, typical delivery vehicles, loading areas, building functionality, etc.).
If an interim cure is required, discuss the nature and suitability of the temporary cure for the property, length of time the cure is needed and any other pertinent factors including costs, providing an interim map.
All cures must have a reasonable probability of acceptance. Review the results of your discussions with local officials. Set forth name and position of the official(s) you met with and the date you met them.
When a cure is not physically possible, the report shall explain why a cure is not possible and what the impact on the remainder is of the uncured condition. The report may include a “partial cure” such as removing unusable spaces, restoring aisles, closing building entrances, etc. and supply costs for the actual work and any approvals required.
When a cure is not economically feasible (as determined by the appraiser), the report shall provide a description and maps indicating the before condition and the after condition. If applicable, it may explain why a cure is not possible and provide for a “partial cure” such as removing unusable spaces, restoring aisles, closing building entrances, etc. and supply costs for the actual work and any approvals required.
SECTION IV. Valuation Process Defined: (Used for Functional unit studies Only)The specialist should define what items are to be valued and the valuation methodology utilized. Disclose the source of valuation information (Means, Marshall Swift, etc.) and discuss depreciation of the items.
SECTION V. Valuation Section Estimated value of or cost to cure the acquired or damaged items.All valuations/ cures are to be based upon the current cost as of the date of inspection or the complaint date.The valuations/ cures must be supported either by sales prices, published cost references, data from buildings actually constructed, current selling prices, or other acceptable and reasonable market derived support.
Estimate is to be set forth in a line item format consisting of a description of each item being evaluated, quantity, unit price, and total for each line item.
Interim cures use the same valuation techniques and have a separate area in the valuation section. NOTE: Building severance interim costs are needed if the work is not to be done by a NJDOT contractor.
Functional unit valuations are to include another column for depreciation reflecting wear and tear.
SECTION VI. Exhibits: All reports are to include color photos (or color copies) that depict the subject and a copy of the inspection letter. Include the NJDOT access letter and/or access cut out where appropriate.
If a plan sheet is needed as part of the assignment, it must have a title block, north arrow, dimensions of major features and scale based on NJDOT maps. Where appropriate the plans are to have property boundaries, right of way lines, encroachments and use of adjoining land whether by easement or not. Wherever it is applicable the plans should show improvements (buildings, parking) and where needed the location of existing and proposed drainage and utility features should be noted
Cost to Cure Reports must have detailed plans that depict the existing, interim (as needed) and proposed conditions such as buildings, driveways, site improvements, property lines and right of way lines.
Before Condition Plans shall note existing conditions as appropriate and relevant to the report.
Encroachments on the subject and/or any use of the adjoining lands by the subject property
Interim (Temporary) Condition Plans (if needed) shall contain;
After Condition Plans shall contain;
SECTION VII. Certification Prepare and sign a certification similar to the certification example (doc 23k). Where more than one value is needed the last paragraph of the certification will identify each of the alternate values.
Access- Any rights the owner may or may not have to place or keep a driveway opening onto a road at a specific location. Generally access rights are a separate issue from condemnation and represent an administrative exercise of the State’s police powers. Any questions regarding this issue need to be discussed promptly to avoid incorrect conclusions and delays.
Appropriate/ Applicable- Items required to provide a meaningful report. Architectural reports describe building layout and structure in depth while parking studies identify building use, exterior dimensions, operating hours, parking demand, entrances and loading area. Questions as to required elements should be addressed to the ROW Unit. In all circumstances include any element needed to make sense of the report.
Compensable- Those damages to the property that the owner may be entitled to compensation for. Items such as noise and dust that are typical in the construction are not compensable. Non compensable items also include loss of business, circuity of travel, placement of a center divider, etc. Other elements of damages may be compensable depending upon the circumstances. Specific questions should be addressed to ROW.
Encroachment- (Trespassing) Using the lands of another property owner or the right of way without permission. Can be permanent (building, paving, etc.) or a temporary use (see Illegal Parking).
Illegal Parking- Parking that is physically located in or uses part of the right of way.
Example Top parking stall has sufficient (20’) clearance to maneuver.
Lower stall maneuvering room crosses part of the diagonal right of way line making it illegal.
Non conforming- Those improvements that do not meet current Municipal standards. May be preexisting (grandfathered by virtue of existing before the code). It is important to address zoning standards and their impact on the property in relation to both the before condition and the proposed condition.
Parking Safety issues- Identify spaces which are clearly substandard to industry accepted safety standards and would not be designed by a competent responsible parking specialist.
Weiswasser Cases- Property valuation where the NJDOT provides a piece of replacement land to facilitate the cure. Requires consideration of the property with the additional land and consideration without the additional land. The report should reflect two costs, one with the additional land in place and one without the land in place.
Zoning- A code of development standards set in place by municipalities to control land use. Zoning normally specifies setbacks, building size, development density (bulk requirements) and parking ratios. It should be noted that some zoning codes only address the bulk limits in that zone while a separate portion of the municipal code deals with parking ratios and “aesthetic” standards for development of a site over and above the zoning standards.
Appraisal Preparation Standards