California Civil Jury Instructions (CACI)

3506. Effect of Improvements

In determining the fair market value of the property you must consider both the value of the land and whether any buildings, machinery, or other equipment attached to the property increase or decrease the value of the property.

Directions for Use

The court decides as a legal issue whether an improvement is a fixture "pertaining to the realty." (Code Civ. Proc., § 1260.030.)

Sources and Authority

Code of Civil Procedure section 1263.210(a) provides: "Except as otherwise provided by statute, all improvements pertaining to the realty shall be taken into account in determining compensation."

Code of Civil Procedure section 1263.205(a) defines "improvements pertaining to the realty" as including "any machinery or equipment installed for use on property taken by eminent domain, or on the remainder if such property is part of a larger parcel, that cannot be removed without a substantial economic loss or without substantial damage to the property on which it is installed, regardless of the method of installation."

Code of Civil Procedure section 1263.205(b) provides: "In determining whether particular property can be removed 'without a substantial economic loss' within the meaning of this section, the value of the property in place considered as a part of the realty should be compared with its value if it were removed and sold."

"[T]he market value of land and the improvements thereon is the market value thereof viewed as a whole and not separately." (South Bay Irrigation Dist., v. California-American Water Co. (1976) 61 Cal.App.3d 944, 986 [133 Cal.Rptr. 166], internal citation omitted.)

Secondary Sources

8 Witkin, Summary of California Law (9th ed. 1988) Constitutional Law, § 1011

1 Condemnation Practice in California (Cont.Ed.Bar 2005) § 4.55

4 Nichols on Eminent Domain, Ch. 13, Fair Market Value—Physical Character, §§ 13.02, 13.12 (Matthew Bender)

20 California Forms of Pleading and Practice, Chapter 247, Eminent Domain (Matthew Bender)

(New September 2003)