AB 1033 amends Code of Civil Procedure §1263.025 to change how much a public entity must offer to pay when a property owner orders an independent appraisal after receiving an offer to purchase “under a threat of eminent domain.” The bill makes that payment obligation explicit at the time the public entity makes its offer, requires the appraisal be done by a licensed appraiser, and raises the statutory maximums for reimbursable appraisal costs while distinguishing between full acquisitions and partial takings.
This change matters for two groups: property owners (and their counsel) who will have access to larger reimbursements for independent appraisals when deciding whether to accept an offer or litigate, and public entities that must absorb higher upfront appraisal reimbursements — especially in cases of partial takings, where the bill sets a larger cap. The result will affect negotiation leverage, appraisal market behavior, and budgeting for condemnation projects across California local governments and agencies.
At a Glance
What It Does
The bill requires a public entity to offer to pay the reasonable costs of an independent appraisal ordered by an owner at the time the entity makes an offer to purchase property under a threat of eminent domain, and it directs that the appraisal be performed by an appraiser licensed by the state. It also raises the statutory ceiling on reimbursable appraisal costs and treats partial takings differently from total acquisitions.
Who It Affects
Directly affected parties include property owners facing an offer tied to potential condemnation, public entities that acquire property or pursue eminent domain, and licensed real estate appraisers who perform the reports. Condemnation attorneys and municipal finance officers will feel the operational and budgetary impacts most immediately.
Why It Matters
The bill shifts the immediate cost burden and can change bargaining dynamics by making higher-quality appraisals more affordable for owners. For public entities, the change increases potential acquisition expenses and could alter project budgets, reserve planning, and how quickly agencies move from negotiation to formal condemnation.
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What This Bill Actually Does
AB 1033 revises the statute that governs who pays for independent appraisals when a public agency offers to buy property while signaling or threatening eminent domain. Under the amended language, the public entity must present an offer that includes an offer to cover the owner’s independent appraisal costs at the moment it makes the purchase offer.
The appraisal must come from a state-licensed appraiser, which narrows the pool of acceptable evaluators to professionals credentialed under California law.
The bill separates treatment of full acquisitions from partial takings: it raises the maximum reimbursable amount and explicitly allows a higher ceiling for cases where only part of a parcel is taken. By differentiating partial takings, the statute recognizes that valuation work for partial acquisitions can be more complex and costly than for an entire-parcel sale.Practically, the change changes the front-end interaction between owners and acquiring agencies.
Owners get clearer access to paid appraisals at the offer stage, which improves their ability to assess the offer’s adequacy without bearing hefty up-front costs. Public entities must build the appraisal reimbursement into their offer process, document the payment, and anticipate greater near-term cash outlays or accounting accruals for acquisitions.The statute also tightens some procedural definitions: it spells out what counts as an offer made “under a threat of eminent domain” and requires that appraisals be done by a licensed professional.
The text does not add a new private right of action or elaborate on enforcement mechanisms, so many implementation details — like what counts as a “reasonable” cost or how disputes over the appraisal’s reasonableness are resolved — will fall to practice, agency policy, or future litigation.
The Five Things You Need to Know
The bill requires the public entity to offer to pay the owner’s independent appraisal costs at the same time it makes the purchase offer tied to the threat of eminent domain.
For a total acquisition of a property, the statute caps reimbursable appraisal costs at $8,000.
For a partial taking of property, the statute caps reimbursable appraisal costs at $15,000.
The independent appraisal must be conducted by an appraiser licensed by the Office of Real Estate Appraisers.
The statute defines an offer “under a threat of eminent domain” to include (1) an eminent domain action, (2) an offer following adoption of a resolution of necessity under Section 1240.040, and (3) any offer following a statement that the public entity may take the property by eminent domain.
Section-by-Section Breakdown
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When and who must offer payment for the appraisal
Subsection (a) creates a timing and payment obligation: when the public entity makes an offer to purchase linked to a threat of eminent domain, it must also offer to pay the owner’s independent appraisal costs. That places the payment obligation up front in the negotiation timeline and requires agencies to factor appraisal reimbursement into the initial offer packet rather than treating it as a post-offer accommodation.
Cap for total acquisitions
Paragraph (b)(1) sets the ceiling for reimbursable ‘‘reasonable costs’’ in full-take situations. An acquiring agency must consider that ceiling when approving offers and preparing budget estimates; it may also influence whether the agency pursues a negotiated purchase or proceeds more quickly to condemnation to control total transaction costs.
Higher cap for partial takings
Paragraph (b)(2) establishes a materially higher ceiling for partial takings than for total acquisitions, reflecting that apportionment and severance analyses are often more time-consuming and expensive. For agencies, this creates the potential for larger single-case reimbursements and could change staffing decisions for complex partial-take projects or push agencies to require more documentation when owners submit appraisals.
Who may prepare the appraisal
The statute ties the independent appraisal requirement to an appraiser licensed by the Office of Real Estate Appraisers. That narrows acceptable report preparers to state-credentialed professionals and gives agencies a clear, objective criterion for what constitutes an eligible appraisal — but it also channels demand to the licensed appraisal market, with implications for turnaround time and cost.
Definition of an offer “under a threat of eminent domain”
Subsection (c) enumerates three contexts that trigger the payment obligation: a formal eminent domain action, an offer after a resolution of necessity under §1240.040, or an offer made after a statement that the public entity may take the property. The explicit enumeration reduces ambiguity about trigger events but leaves open questions about communications that fall near the margin of those categories.
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Who Benefits
- Property owners facing offers tied to potential condemnation — they get up-front access to funded independent appraisals, lowering financial barriers to obtaining an independent valuation and strengthening informed decision-making and negotiation leverage.
- Licensed real estate appraisers in California — the requirement that appraisals be performed by state-licensed appraisers increases demand for credentialed professionals and may raise billable work for complex valuations, especially in partial takings.
- Property rights attorneys and valuation consultants — larger reimbursable caps make it more feasible to retain specialized valuation experts, potentially improving advocacy quality in negotiations and later litigation.
Who Bears the Cost
- Municipalities, counties, special districts, and other public entities that acquire property — they must offer and potentially pay higher appraisal reimbursements up front, increasing near-term acquisition costs and complicating budgeting for capital projects.
- Taxpayers served by small agencies or special districts — higher reimbursement caps can translate into larger public expenditures or reallocation of limited funds away from other local services or projects.
- Agency finance, legal, and appraisal review staff — increased demand for paid owner appraisals and higher caps will create more administrative work to vet invoices, document payments, and resolve disputes over what counts as a reasonable cost.
Key Issues
The Core Tension
The bill balances two legitimate aims — making independent appraisal information affordable so owners can evaluate and challenge offers, and protecting public budgets and acquisition efficiency — but it does not fully reconcile them: increasing owner access to funded appraisals improves procedural fairness while simultaneously raising immediate costs and administrative burdens for public entities, shifting the fiscal burden onto agencies and their constituents.
The bill tightens an operational rule but leaves several implementation questions unresolved. First, the statute requires payment of ‘‘reasonable costs’’ but does not define ‘‘reasonable’’ beyond the overall monetary caps; agencies will need internal policies or administrative guidance to decide when an appraisal fee exceeds reasonableness within the statutory ceiling.
That gap creates room for disputes and uneven application across jurisdictions.
Second, the law channels demand to licensed appraisers, which may increase appraisal fees and turnaround times in areas with few credentialed appraisers, or drive owners to select more expensive specialists for partial-take valuations. Those market effects could erode some budget predictability for public entities.
Finally, the statute does not create a tailored enforcement mechanism (for example, a fast-track administrative review or a statutory penalty for noncompliance), so remedies for an agency’s failure to offer or pay are likely to be litigated under existing eminent domain and contract doctrines rather than resolved by a new statutory process.
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