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Rights to use a subsurface held by someone other than the fee owner are common and vary widely. They range from utility line easements, including the right of surface entry (effectively precluding building construction), to the rights to remove minerals and hydrocarbons at extreme depths (e.g., below a depth of 500 feet). The new Metro Rail system in Los Angeles provides an example of the problems encountered by appraisers when easements for subway tunnels are acquired beneath the surface of private properties in the urban center.
The easements addressed here include the right to use the subsurface only, without a right of surface entry. The upper limits of these easements generally range from 40 feet to 70 feet below grade. The tops of subway tunnels are 10 feet below the upper limit of the easement. The organization of this discussion corresponds to the so-called state rule in eminent domain. That is, the two elements of compensation--the value of the rights acquired and severance damages--are addressed separately. The federal rule joins the study categories by means of a single after-condition study.
THE VALUE OF THE EASEMENT RIGHTS
Few sales exist to guide an appraiser in the valuation of subsurface easements. Typically, opinions of value or such rights are expressed as a percentage of the value of the unencumbered fee. The percentage varies depending on the remaining utility of the easement area for highest and best use purposes. In the case of utility line easements, from 50% to virtually all of the underlying fee value may be taken by the acquisition of the easement rights.
When the challenge is to value easement rights that are solely subsurface in nature and exclude any right of surface entry it can be argued that there is little independent economic value (excluding possible mineral rights considerations) to the right to use the earth at or below the depths typically in question. In such cases the value of the rights acquired may range from nominal to a small percentage of unencumbered fee value.
IMPACT OF THE TUNNEL AND TRAIN OPERATIONS
IMPACT ON EXISTING BUILDINGS
Potential impacts on existing buildings can include damages during construction or after construction. The latter would be a result of noise or vibration from train operations. In Los...