Opinion ID: 2358932
Heading Depth: 1
Heading Rank: 2

Heading: The Subdivision Development Method Is Irrelevant Under Texas Condemnation Law

Text: In holding that Patterson's subdivision development analysis ( i.e., the subdivision development method) was not competent market-value evidence, the Court focuses on the flawed methodology and thus the unreliability of Patterson's appraisal. The Court concludes that Patterson's appraisal did not demonstrate what a willing buyer would pay to a willing seller in the relevant market. 48 S.W.3d at 184. However, the Court asks and answers the wrong question and does not answer the real question in this case-whether the subdivision development method is relevant to establish the market value of raw, unimproved land in condemnation cases. The answer under established Texas condemnation law is no. But, without further explanation, the Court leaves the door open and opines that in some condemnation cases involving undeveloped land, the subdivision development method may be reliable, relevant, and admissible. 48 S.W.3d at 186. The Court concedes that, for over a century, Texas courts have refused to admit hypothetical subdivision evidence to determine raw land's market value. See, e.g., Willey, 360 S.W.2d at 525; Cannizzo, 267 S.W.2d at 815; Silliman v. Gano, 90 Tex. 637, 39 S.W. 559, 563-64 (1897); Boswell, 910 S.W.2d at 601; Kaufman Northwest, Inc., 529 S.W.2d at 288; Collins, 357 S.W.2d at 452; Denison & P.S. Ry. Co. v. Scholz, 44 S.W. 560, 561-62 (Tex.Civ.App. 1898, no writ). But it persists in arguing that these cases do not apply here, and presumably in any condemnation case using the subdivision development method, because considering individual lots' estimated values is only a single step in the expert's mental process. The Court also claims that under this appraisal technique, the evidence of individual lot sales is not offered as comparable to the undivided property. The Court's reasoning entirely ignores Texas law that condemned property's value must be based on the land's condition at the time of the taking. See Tex. Prop.Code § 21.042(b); Corbin, 504 S.W.2d at 830. Further, contrary to the Court's cursory conclusion, the subdivision development method does require that the expert use individual lot sales as comparable to the undivided land. And, in fact, this is exactly what happened here. As the Court explains, Patterson reviewed recent sales of three comparable, unimproved residential lots in one nearby subdivision. 48 S.W.3d at 180 (emphasis added). Simply because the subdivision development method also requires that the expert take additional steps and consider other factors before arriving at a final dollar figure does not mean the method is any more relevant. Rather, this appraisal method's underlying premisethat the sale price of lots in subdivided areas is comparable to raw, unimproved condemned propertyis precisely what the Court rejected in Willey. 360 S.W.2d at 525. III. CONCLUSION In leaving the door open for courts to allow parties to use the subdivision development method as evidence of raw, unimproved property's market value in condemnation actions, the Court ignores established Texas law to the contrary. While condemned land's adaptability to subdivision is relevant to show the land's highest and best use and thus is a factor for the jury's consideration, this cannot be used as the basis for the market-value appraisal. The underlying approach to the subdivision development method is fundamentally flawed under Texas condemnation law, because evidence about actual individual lots' value is irrelevant to show raw, unimproved condemned property's market value on the condemnation date. Because the subdivision development method raises the same concerns as it has for over one hundred years, the Court should adhere to Texas law and hold that this appraisal method is irrelevant and inadmissable to show raw, unimproved property's market value in condemnation cases. Accordingly, I concur in the Court's judgment only.