I've got an unusual situation (at least unusual to me), and I greatly would appreciate your advice. I've got a client that has recently damaged several landscape plants on a residential property due to unknown contamination in a recent spray application. Although there has been an extensive amount of defoliation over the past 3 months, there has only been limited dieback and death of the trees and shrubs affected. Due to the season, it is difficult to determine how well the plants will recover, but based on their current condition, my prognosis is that most of the plants will recover to near their former condition this spring and summer. The arborist has initiated a satisfactory PHC program to enhance recovery.

The problem is this: The client is impatient and feels that the plants, particularly the trees, have lost their aesthetic value, and he wants an appraisal so that he can replace the trees. I have refused to appraise the plants until spring because the plants are not dead and because I do not have enough information yet to correctly estimate their recovery potential. My opinion is that the loss in value is only temporary. How do you measure that? I do not want to divorce myself from the property because the client is insistent and can easily find an armchair appraiser that will give him a value by plugging in numbers to formulas taken out of the Guide.

Any suggestions?

Reply to post by W Todd Watson, on January 29, 2003 at 13:46:07:

You are 100% right in your approach as to waiting until you can make a decision on their recovery. It is possible the plants are damaged and stressed enough for other pathogens or problems can do them in.

You are looking at a classic cost of repair appraisal-The costs to repair the damages and return them to their pre-casualty condition.

Lew

Reply to post by W Todd Watson, on January 29, 2003 at 13:46:07:

Lew is correct. Temporary damage (technically, curable obsolescence or depreciation) is best appraised by a Cost of Repair Method.

You can also use CORM as a management decision tool. If the COR~>Value the damage might not be economically curable and you decide to remove instead. In your case, this comparison provides some guidance on the appraisal problem.

There are cases where the outcome remains unknown but a potential total loss estimate is required. Assume that if there is recovery (of the plant, not of monetary damages)the COR will be less than total value. In such cases you could report a COR to recovery - or possible CORs for different possible recovery periods - and a total loss figure if there is not recovery. If the decline period to a decision point is long or the value significant you could adjust the total loss number for declining benefits stream experienced before total loss.

This is probably not a situation you would allow to be created by an impatient client when only a season has passed. If you did allow this your opinion would be so clouded by caveats and unknowns that it might not be very reliable anyway.

But you might responsibly take an approach like this if say a guarantee period is expiring or a statue of limitations is about to run and action must be taken to preserve the damaged parties rights.

Reply to post by W Todd Watson, on January 29, 2003 at 13:46:07:

Lew and Scott,

Thank you for your advice and expertise. I just wanted to make sure that I was on the right track on this one. As always, your information was very helpful!

Todd