Only Owners Can Choose to Admit Assessed Value in a Condemnation Case

If an agency values a property in a condemnation at an amount lower than the assessment, the owner can present the assessment to the jury.  However, the agency is not allowed to introduce evidence of the assessed value. 

Because the law is so clear, it is rare that owners and agencies face a dispute about the admission of assessed value.  Amazingly, ITC is forcing me to file a motion on the topic and I thought that I would share the law contained in that motion in this blog post. 

The issue was first addressed by the Michigan courts in 1946.  The property owner “defendant offered in evidence the assessment rolls of the city of Detroit for the year 1945 for the purpose of showing that the assessed valuation of parcel No. 25 was $6,830. The trial court refused to admit this evidence. The jury returned a verdict in favor of defendant in the sum of $3,250.”  (Emphasis supplied).  Thus, after the assessment was excluded, Detroit was able to pay less than half of the amount that the city itself deemed the property to be worth when establishing that year’s tax assessment.  The verdict was overturned because “’[t]he city ought never to be in the position of fixing a price for taxes and then denouncing the price when it is used for condemnation.’”  This case established that only owners can admit evidence of the assessed value. 

As part of the same project, the Michigan Supreme Court confirmed the basis for its rationale.  “When offered by the defendants in condemnation proceedings, the assessed valuation for the current year placed by the city on the property in question is in the nature of an admission against interest.” 

28 years later, the Michigan Court of Appeals called agency attempts to introduce the assessed value a “notoriously well known” type of “abuse and misuse.”

Finally, in another case, the Court of Appeals reversed a trial court that allowed the assessed value to be admitted by a city.  “We next address the question of [the city’s] introduction of evidence concerning the assessed value of the property.  Michigan has adopted the minority view on this issue, restricting the introduction of such evidence to the property owner in a condemnation case on the ground that introduction by the property owner amounts to an admission against interest… We therefore find that defendant, the party desiring to take the property, was improperly permitted to elicit such evidence in this case.”

Assessed value is something that a property owner can examine to gage whether they believe an offer is fair.  However, it is not a limiting factor and will not be admitted into evidence unless the owner believes it is appropriate.  There are a number of logical reasons behind exclusion of assessed value.  For example, when appraising property in a condemnation, the “market value” in a condemnation is based on the “highest price” the property would yield.  Assessments do not use this standard.  The same appraiser relying on the same data should opine that the market value on a given date of a condemned property is higher than the true cash value used for assessment.   This makes it even more outrageous for an agency to offer an amount lower than the assessment and further justifies allowing only the owner to introduce that evidence.

Please do not hesitate to contact me if you have any eminent domain issues.