There are times when you determine that what appears to be a public road is actually under private ownership.  This private ownership can either be full fee over a particular area of the road, or ownership that may be subject to an easement.  How do you value that road when you need to acquire it pursuant to a right of way project?

Although it may seem that the obvious way to value the road would be the construction value of the road, that is not the proper way of determining its value for acquisition purposes.   An accepted way of valuing a road is to utilize the “across the fence method”, which is based on using the fee value of the land that adjoins the road.  This valuation methodology assumes that the market value per square foot of the road is equal to the value of adjacent or adjoining land.

In using this method it also important to consider whether the road section may be encumbered by an existing right of way easement.  If that is the case then the value of the encumbered road is not the full fee value, but the value as encumbered.  It is important to remember that not all roads are actually what they appear to be.  If you fail to clearly understand the ownership interests of a road, and how the road should be valued it could delay your project.

In my next Blog I will be discussing a way of obtaining ownership in a road without the need to pay for that interest.