Section 38 Types of Special-Use Properties

• Library: Condemnation Practice 2009

Cemeteries are treated as special-use properties. In State ex rel. State Highway Commission v. Mount Moriah Cemetery Ass’n, 434 S.W.2d 470 (Mo. 1968), the Supreme Court of Missouri held that it was reversible error to use the sales comparison approach, which it called fair market value approach, for cemeteries. The valuation methodology approved was the capitalization of net profits. The Court went on to state that the standard condemnation jury instructions pertaining to fair market value should not be used. This case involved a partial taking of a cemetery. The property owner’s case showed that there were 1,300 grave spaces sold per year, showed that the condemned parcel would allow for 53 years of sales at the rate of 1,300 spaces per year, established net profits per sale, and put on a discount rate. The Court specifically held that the capitalization method is appropriate for cemeteries and that the standard jury instructions should not have been used. Id. at 472–73. The Court stated:

While in theory market value is the test [the hypothetical measure being what another cemetery would pay if there was one willing to buy, see 4 Nichols 219] the usual means of determining market value are lacking and it is necessary to resort to some other method. It is said in the Buxeda case the real problem (196 F.2d l.c. 180) is ‘to show the value of the property as used for a cemetery as a whole at the time of the condemnation and its value after the condemnation. The difference would be the measure of the compensation allowable to it.’ A proper instruction might be drawn on this basis, following the standards stated in Civil Rule 70.01(e); see also M.A.I...