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Writer's pictureGarrett A. Heckman

The Property Owner Rule (Property Owners as "Expert" Witnesses)

Updated: Jan 25

Introduction

In most contexts, if you end up at trial, your opinion is not admissible unless you're qualified as an expert. See Fed. R. Evid. 701; Cal. Evid. Code section 800; Tex. R. Evid. 701.


This means that, at trial, litigants usually can only speak to facts of which they have actual knowledge. Your testimony might include admissible evidence as to what you saw, what you heard, and what you experienced. The court simply isn't interested in your opinion unless you are an expert. But there is one important exception: the value of your real property.


Why have this exception?


This rule is based on the presumption that property owners have a good idea as to the value of their real property. In many cases, this is probably true. You pay property taxes (which often indicates assessed value), you keep an eye on your house on websites like Zillow, perhaps you recently purchased or refinanced it, and maybe you follow sales of comparable property in your neighborhood. In short, a property owner has bases for determining the value of his or her property.


In addition, expert witnesses are expensive. If there is a dispute involving value, depending on the facts, it might not make a lot of sense to pay a valuation expert five figures to determine fair market rental value, for example. This arises in many contexts, from business dissolution to divorce to tax disputes to probate.


California


California codified the property owner rule as Evid. Code section 813(a)(2): "The value of property may be shown only by the opinions of any of the following…The owner or the spouse of the owner of the property or property interest being valued... An officer, regular employee, or partner designated by a corporation, partnership, or unincorporated association that is the owner of the property or property interest being valued, if the designee is knowledgeable as to the value of the property or property interest."


In short, the owner (or knowledgeable agent of an owner that is an entity) may offer testimony as to the value of the property, subject to other rules of evidence.


Texas


Similarly, in Texas, this rule creates a rebuttable presumption that a landowner knows the property's approximate fair market value, and that the landowner is thus qualified to express an opinion about that value. See Natural Gas Pipeline Co. of Am. v. Justiss (2012) 397 S.W .3d 150, 157. And, as in California, a qualified owner's testimony does not necessarily provide relevant evidence of value that can support a judgment. Rather, courts “insist that the testimony meet the same requirements as any other opinion evidence.” Justiss, 397 S.W.3d at 156.


Texas has not codified the property owner rule, but does follow it per court precedent. And the testimony does not establish the value, but merely creates a rebuttable presumption.


Conclusion


The Property Owner Rule is an important evidentiary exception to the general rule that expert opinion must come from qualified experts. Under this rule, property owners may offer testimony as to the value of their property.

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