Tree and Landscape Appraisal: Jurisdiction Determines the Appraisal or Valuation Method

The value of a tree can only be determined if we agree. Any value given, whether by a layperson or a professional, is real when another person involved in the process agrees to that value. The value used in the final decision can also be a different value from the one determined by the experts who worked on it (especially when the experts worked on different sides of a valuation case). I am directed most by the jurisdiction involved; more than other influences in an appraisal or valuation project.

The jurisdiction is what regulates or controls the parameters of a project. In some situations there is a governing body (sometimes Agencies with Interest1) that regulates what can happen and what is involved. One example is a Tree Preservation Code in Broward County Florida. The code defines a Specimen Tree as "A tree that is 18 inches in diameter or larger with specimen quality...". There is mitigation required when removing a specimen tree in Broward County. This mitigation is required to be "... the appraised value of the tree determined by an ISA Certified Arborist". When a tree is not a Specimen Tree, the mitigation required is to match the canopy area removed with new canopy area (i.e. 1,200 square feet of canopy removed requires 1,200 square feet of new tree canopy to be installed).

To illustrate the affect of jurisdiction in this matter, here are two examples. A tree that is 17 inches in diameter is worth the installed price of four 12 feet tall new trees; approximately $800. A tree that is 18 inches in diameter is worth the trunk formula appraised value; approximately $4,200.

Broward County Florida greatly affects the value of a tree, and the method for valuation, by their Tree Preservation Code. Without this jurisdiction, there would not be such a change in one inch of tree diameter for value. Without researching the jurisdiction involved, an Arborist's appraisal for tree mitigation in this county can be far from the real value.

A second situation for jurisdiction is an insurance claim for landscape damage caused by fire. The insurance policy language requires use of replacement cost for the valuation. The insurance company has jurisdiction for this situation. I did an appraisal by the replacement cost method for the insurer. There were 5 pine trees, 3 Oak trees, 28 ficus shrubs, 4 ornamental hibiscus, and 1,400 square feet of turf destroyed by fire. The replacement cost was $24,250 for all the landscape destroyed. Another Arborist, hired by the property owner, did an appraisal by the cost to cure method. This would be acceptable by the appraisal guide, and is a good valuation method. It did not meet the jurisdiction or policy language, but provided a higher damage value.

What happened next? At the first settlement meeting, the insurance adjuster presented the policy language, specifically what cost basis to use for determining the claim value. The opposing expert presented his cost, $52,000, and the reasons that replacing the destroyed landscape with new plants, and having 15 years of maintenance for them to grow to nearly the same size as what was lost, is the best estimate of value. It is a good argument, and could be a basis for a claim value. Yes, the opposing expert's report and defense was requested to be dismissed by the insurance adjuster. The property owner agreed, and the claim was settled by the replacement cost method for the exact cost reported. Knowing the jurisdiction sometimes helps you be the only expert standing at the end of the day.

Doing a project or assignment well, includes knowing what will regulate, or control, how you determine value. You need to know the jurisdiction and the applicable language or section, before you do the assignment. Better yet, include this limitation in your assignment section of your report.

References:

2007. Broward County Code Book, Tree Preservation Section.

Currin, Peggy, Editorial Coordinator, 2000. Guide for Plant Appraisal, 9th Edition.