N.J. Admin. Code § 2:76-10.7

Current through Register Vol. 56, No. 24, December 18, 2024

Section 2:76-10.7 - Property valuation after development easement acquisition (market value restricted)

(a) The property valuation after development easement acquisition (market value restricted) section of the appraisal report shall contain the following:

1. A description of the subject property in conformance with N.J.A.C. 2:76-10.6(a)1. In addition, an evaluation of the deed restrictions contained in N.J.A.C. 2:76-6.1 5 and their effect on the subject property, the subject property's adaptability for agricultural use or other uses which are not in conflict with the deed restrictions, soils and their productivity and other items which are significant to the valuation of the subject property;

2. A detailed description of the subject property's highest and best use as encumbered by the deed restrictions. The highest and best use analysis shall consider the following:

i. The legality of possible use;

ii. The physical possibility of use;

iii. The probability or likelihood of use; and

iv. The economic feasibility of use.

3. A determination of the subject property's market value restricted. The appraiser shall consider the effect of buildings and improvements when conducting the valuation, but only the market value of the land is required to be identified.

i. The appraiser shall consider the direct sales comparison method of valuation which shall be based on a comparison of the relevant vacant acreage sales to the subject property as encumbered by the deed restrictions. The appraiser shall consider the following types of land sales;

(1) Deed restricted properties;

(2) Physically limited properties;

(3) Flood plain;

(4) Low development pressure; and

(5) Development easements.

ii. The appraiser shall adjust the comparable sales to include, but not be limited to, the following: soil characteristics, zoning, hydrologically limited areas, date of sale, financing, and residential opportunities.

(1) The appraiser shall consider the effect of residential opportunities, including an existing residential unit, an exception, which is not encumbered by the deed restrictions, or a residual dwelling site opportunity allocated to the subject property pursuant to N.J.A.C. 2:76-6.1 7, if appropriate, and any other improvements when conducting the valuation, but only the market value of the land is required to be identified.

(2) The appraiser shall determine if there is an increment of value attributed to the land that is independent of the actual value of the improvement.

(3) The appraiser shall provide a land sale comparative rating grid in conformance with the sample in Appendix C.

(4) The final estimate of value shall be expressed as a per acre value and a total value for the property.

iii. In addition, the appraiser may consider the following methods of valuation:

(1) Income capitalization; and

(2) Cost approach.

N.J. Admin. Code § 2:76-10.7

Amended by R.2003 d.208, effective 5/19/2003.
See: 35 New Jersey Register 379(a), 35 New Jersey Register 2176(a).
In (a)3ii, added new (1) and (2) and recodified existing (1) and (2) as (3) and (4).