Midwest Minute – November 27, 2023 - "When the King and Queen Come Calling"

To start off this article, I would like to quote the late Lloyd Manning, who was considered by many of us in the real estate industry to be an authority in the field of appraisal.?

I certainly did, as he was always gracious with his time teaching me the principles to guide valuation of a variety of properties and businesses.

Lloyd wrote the following in his book, What Is It Worth: “Always remember pat answers don’t exist.? No one ever said or developed exactness for every situation. You don’t pull appraisal solutions off the supermarket shelf.”

He went on to say, “You might approach situations from many angles, using different tactics, and you might reach divergent conclusions that could be foreign, logical, and acceptable, all at once.”

I couldn’t help but think of these statements when recently asked by a landowner to provide an opinion on the value for twenty plus acres of farmland that would be flooded periodically by a municipality discharging excess fluid from their sewage treatment facility.

The municipality sought an easement and was only prepared to offer a modest one-time payment for the right to use the land indefinitely for the identified purpose, like when someone wants to build a pipeline or utility corridor or to access their property through yours.?

Somehow, the use of an easement registration on title just doesn’t feel right to me.

For example, an easement granted for a pipeline can restrict the landowner’s ability to develop within the right-of-way, while allowing activity on the surface there can be no permanent structures erected.

Utility corridors can also be a downright nuisance, just ask any farmer who forced to navigate their equipment around high tower transmission poles.

However, if the King, and his governments (federal, provincial, or municipal) feels it is necessary to put a super-highway through your front lawn, he can do so.

It is called “right of eminent domain” or action that needs to be taken for the public good.

All that is left for discussion is the appropriate amount of compensation at fair market value.

But with this issue the actions of the municipality are not just a nuisance to the landowner, as the flood zone created from time to time by the wastewater discharge takes the land out of production even if it is only for short periods of time.

It could even alter the quality of the soil, making it unproductive even when the extra surface water is not there.

So, in this country boy’s mind, it is more aligned with the impact of an energy company’s request to use land to establish a drill site and the service road to it.?

In those cases, the company is not prepared to buy the impacted property, and asks you to lease it to them, which means an annual payment at a mutually acceptable rate.

It also should be guided by provincial environmental regulations, including a predevelopment assessment of soil quality and ongoing monitoring of any negative impacts.?

I am pretty sure the King won’t be in the mood to make those commitments, but maybe, as Lloyd said, the correct solution can “foreign, logical, and acceptable, all at once.”

?I guess we will see.

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Vern McClelland is an associate broker with RE/MAX of Lloydminster and an active partner in his family’s livestock operation.? Comments on this article are welcome either by emailing [email protected]? or calling (306) 821-0611.