In the event of a tree providing benefit to more than one owner or property, how can we apportion the values? I can envision many scenarios, and each may have a different yet valid solution.

As Soctt questioned in his comments in the Legal section, can a tree have an apportioned value greater than its value taken as a single entity? If more than one person or party shares in the benefits, can each then have a claim to some of the value? Or must the sum of the parts equal only the total value of the tree.

Going to the extreme end, can multiple owners each claim full value for benefits lost? IOW, if a tree is sitting squarely on a property line, can each of the owners claim the full value of the loss?

Reply to post by Russ Carlson, on October 31, 1998 at 19:16:35:

Good questions Russ.

I've seen some case law that private property owners can claim an interest in the value of adjacent publically owned trees. I'll have to search for the citation, but it supports the idea that value is not restricted to the record owner.

Beyond that I'm going on intuition here, it's not a topic I've researched. It seems to me that a basic issue is the definition of value or of the appraisal problem. If one starts out assuming that "value" is the value to one beneficiary, typically the owner, then additional beneficiaries must share in that value to keep within the bounds of that $figure. Adding value for those additional beneficiaries would appear illogical. But so does the idea of apportioning: you mean I own this tree but I have to share the value with my neighbors?

An alternative approach is to start from a position that "value" is the sum of all benefits to all beneficiaries and that our property owner estimate is a portion of the total, in most instances the only portion or assignment addresses.

In a replacement cost approach to value, however, we assume that the total of benefits are reflected in the replacement cost. If actual, compltete replacement takes place all parties are made whole. If a dollar award is made, however, the questions arise: are all parties made whole and how is the award allocated to all parties?

Just a start. Input guys?

Reply to post by Scott Cullen, on October 31, 1998 at 19:16:35:

>>Scott wrote: An alternative approach is to start from a position that "value" is the sum of all benefits to all beneficiaries and that our property owner estimate is a portion of the total, in most instances the only portion or assignment addresses.<<

I agree with this point- When we use TF and assign location factors for contribution and placement, we are in effect selecting the portion of the tree's whole value that applies to that property. Can we then take this to mean that contribution and placement will be 100% when all beneficiaries are considered?

Reply to post by Russ Carlson, on November 01, 1998 at 12:19:05:

Complex! Start with the assumption that TF is a replacement cost approach and that replacement restores lost benefits. If the replacement is possible then everyone is made whole. Not just the owner but all surrounding beneficiaries. A benefits approach might find that all beneficiaries are not made whole, but that's more theory than practice because we have poor benefits approach tools, so let's stay w/TF.

Remember that the factors are depreciation adjustments, reducing replacement cost estimate to reflect benefits. If the definition of value is contribution to market value of real estate then Location adjustment must adjust to a reasonable contribution. If the assignment is to estimate value to the record owner then adjustment would be to 1 market value and could be up to 100% depending on relationship of tree and property. If assignment is to estimate contribution to multiple properties then Location adjustment would be to the sum of multiple market values and could still range up to 100%. There are alway two elements in the equation: a base and a rate. You must consider both.

In the multiple property case 100% replacement might be quite less than sum of contributions to each property, a sort of efficiency or economy of scale effect. There is not net loss, in theory, because we've assumed replacement makes everyone whole, even though there is an arithmetic shortfall.

Reply to post by Scott Cullen, on November 01, 1998 at 12:50:35:


UK law dictates amenity value of the tree, irrespective of the tree's ownership. The tree is to the value of all and all means those who can see and enjoy it!

If a tree is to be removed, then the community who are able to 'see it' are informed should they wish to object to the tree's removal.

Makes sense to me!!!

Paul H.

Reply to post by Paul H, on November 01, 1998 at 13:10:42:

Is the value per tree set arbirarily by law (see Dealga 4/27: 20,000 sterling or 2x appraised) or determined by an appraiser. If latter, how does methodology differ between a tree with one beneficiary and one with multiple beneficiares?

Scott

Reply to post by Scott Cullen, on November 01, 1998 at 16:47:22:

Interesting discussion guys... but the question that arises for me is... how is it the role of a Consulting Arborist to determine ownership proportions? I believe it frequently appropriate to reassess and clearly define our role in given projects... particularly as others would attempt to blur dividing lines... (e.g., legal advice, decision making, advocate, etc.).

As for the question at hand.... defining ownership proportions in relation to appraisal results... seems obvious to me: Location factors are developed in relation to the tree's role on a given property. That role may be similar or completely converse on adjacent properties.

If it is ever appropriate for the Consuting Arborist to determine a prportion of ownership, clearly it would be a percentage of the unique value determined in relation to his property.

In fact, a tree may well (and ofen is) a major benefit to one property owner and a liability to another. Example... a large shade tree spanning the n/s boundary between two provides critical shade in the summer for the southern property but blocks the sun in the winter for the northern property.

The total value and/or proportions between adjacent properties may or may not be similar.
While possible, it is unlikely the combined values would result in 100% of the total, or any individual factors would combine to reach 100%.

Arguments?

Torrey

Reply to post by Torrey Young, on November 01, 1998 at 17:13:05:

RE par.1. Torrey you're right. Distinctions are important. We must separate academic/philosophical discussions from practical appraisal methodology discussions. We must define our roles in assignments (ASCA SPP 2.1) and should stick to our assignments as defined (SPP 4.2A). We should only accept assignments within our competence (SPP 3.1C,D,E).

This multiple beneficiary topic is part academic and part practical. PH posts that multiple tree beneficiaries are established by statute in UK. Natural resource valuation considers multiple beneficiaries in the form of the public interest. Wetlands are a good example. Recent CT supreme court case found trees on development sites are a natural resource as defined in Env.Prot. statute. So the legal thread is developing if not complete in some jurisdictions. This is a topic we will need to deal with.

RE par.2. Location factors are related to individual properties, so if statute, contract or custom establishes multiple beneficiaries, property by property ratings would be required. Very simlpistically, the ratings would drop as distance from tree increases. Obviously other factors would be involved.

RE par.3. Defining ownership interests could be a legal or land survey role and outside the typical consulting arborist's competence. A tree clearly and wholely within one property might be obvious to the reasonable lay person. In any event, the question was not about determining ownership interests but about determining value to multiple beneficiaries, only one of whom is owner. Natural resource experts do this all the time. If the need arises to value trees with multiple beneficiaries who is to do it? If contribution to property value is what is called for then a RE appraiser is competent. If tree value separate from land then why not a consulting arborist, assuming competency in appropriate methodologies (which is what we're talking about).

Assuming a single owner with a tree value or benefit of x, would the value or benefit be less if statute, contract or custom establishes multiple beneficiaries? I don't think so. If neighbors y and z also are beneficiaries their's would be separate additional benefits. Total value would be x+y+z.

RE par.4. The benefit to neighbor A, liabilty to neighbor B case is common. In our private property system the owner controls. If you're not the owner and you don't like the tree, too bad. If statute, contract or custom establishes multiple beneficiaries and presumes trees to be beneficial (it's in the public interest to protect private trees, you get no control along with your benefit as a non-owner) then the neighbor who doesn't like the tree just experiences no benefit.

RE par.5. I agree the relative benefits may vary by beneficiary. It's intuitive that they will decrease with distance. If there are multiple beneficiaries, each will have benefits and each set of benefits = 100% when considered on its own. The sum of the individual benefits is also 100%, but it's a different quantity. It is composed of the individual benefits and one could assign a %age portion to each. Since the factors would be separetly considered for each property (see RE par.2) they would not be summed or averaged, they would be variable for each property. There would be no ratings for the total, they would have been considered in the individual components.

Reply to post by Scott Cullen, on November 01, 1998 at 20:27:57:

Interesting topic, one that clearly could be used in the development of community/urban forestry management plans for 'significant or multiple owned trees'. Because of the complexity of liability vs. asset, lack of court data on findings, this topic discussion could begin the worksheet for such future problems.

Should insurance adjusters be approached with potential tree(s) valuation formulas based upon multiple ownership? What current values for multiple resources shared in real estate exist? [mining, water, etc.].


Sincerely, Steve

Reply to post by Stephen Wiley, on November 01, 1998 at 22:49:03:

Interesting questions. Again, it's important to distinguish ownership (liability) interests from value or benefits interests. I would think both are established by law which may vary by jurisdiction. I had assumed that the UK statutes left ownership liabilities in the record owner but limited the record owner's rights (to remove, etc.) in favor of the beneficial rights of others; that those beneficial rights are compensible in the event of improper loss. Any confirmation from UK?

Examples of common ownership include: 1) public property. I think liability and benefits are both shared through the public interest. Private individuals can enforce their protected benefits if the responsible agency (allegedly) fails to protect those interests. Witness all the suits seeking to block development or other activities. I think liabilities stop with the government agency, i.e. the public as a whole shares the burden. I haven't heard of individuals being pursued separeately. 2) Condominiums, co-ops and homeowner associations. I would think there are both governing laws and organizing by-laws or contracts that apply. Form of organization might be involved, e.g. co-ops are corporations, does the corporate veil protect shareholders from personal liability beyond their investment? 3) Partnerships. Same sort of questions. Are you a limited or general partner? Any lawyers out there?

Will the Webmaster want a separate thread on the shared ownership/liability issue in the Law section? Shared benefits is reallywhere this started.

Reply to post by Stephen Wiley, on November 01, 1998 at 22:49:03:

For an example of valuing public resources (such as minerals or water) see the Code of Federal Regulations, Natural Resource Damage Assessments, Use Value Methodologies. 43CFR11.83

Reply to post by Scott Cullen, on November 01, 1998 at 20:27:57:

What?

Reply to post by Torrey Young, on November 01, 1998 at 22:49:03:

Torrey, I tried to answer your 5 papagraph posting on a paragraph by paragraph basis. In response to your "What?" I read over both posts again and it all seems to fit. I'll try to respond to more specific questions.