Suburban Lot

MaRous & Company was engaged by the City of Elmhurst to consult in regard to the discovery of a storm sewer easement that extended across an approximately 6,400-square-foot, single-family lot.

A builder had purchased the lot and had intended to construct a 3,200-square-foot, single-family house with a two-car, attached garage. Following application for construction permits, an unrecorded ordinance adopted by the City of Elmhurst in 1919 was discovered, which created a 10-foot-wide storm sewer easement believed to partially extend onto the subject lot. Combined with a required 5-foot side yard, the easement resulted in a buildable area that would have allowed the construction of a smaller, 2,800-square-foot house. The builder subsequently filed suit against the City, after learning that the 10-foot-wide easement was located entirely on the subject lot.

The assignment was to analyze the demand and the market for the subject property assuming the easement was not in place and alternately, with the easement in place, in light of the plaintiff’s contention that the property had minimal value due to the easement. Our research and analysis reflected that there still was a very strong demand for a 2,800-square-foot residence, which could be designed to accommodate the easement. We analyzed placement of a potential building on the site taking into consideration setbacks, the need for a drive and a garage, and restrictions that the storm sewer easement created. We also compared corner to interior lots, considered the reduction in floor area ratio, and concluded that there would be a diminution in value due to the easement. The values and the issues were considered as of multiple dates of value, which were impacted by dramatic changes in market conditions. Our conclusions generally reflected a 10 to 15 percent diminution in the lot value due to the easement.

After depositions were taken, but before the start of trial, the City of Elmhurst settled by purchasing the fee simple interest in the lot, with the intention to resell the property under its highest and best use for an approximate 2,800-square-foot, single-family residence.

The resolution of the case was partially based on our analysis and resulted in the client acquiring a parcel of real estate at a cost significantly less than the damages alleged by the plaintiff.

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Park Ridge, Illinois 60068

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