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Supreme Court Clarifies Requirements for Property Owner's Testimony as to Value

In a divorce, which party gets the marital residence and what value will be placed upon it is often a point of great contention. At trial, each party must offer evidence supporting the value that they believe should be assigned. This testimony can come from qualified real estate appraisers or, under some circumstances from the home owner themselves.

Last week the Supreme Court of Texas issued an opinion clarifying the standards by which a homeowner can offer an opinion on the value of real property. Natural Gas Pipeline Co. of Am. v. Justiss, 10-0451, 2012 WL 6214635 (Tex. Dec. 14, 2012). According to the opinion, property owners can testify as to the value of their property, but such testimony must have a valid basis and may not be mere conclusions:

“Because property owner testimony is the functional equivalent of expert testimony, it must be judged by the same standards. Thus, as with expert testimony, property valuations may not be based solely on a property owner’s ipse dixit. An owner may not simply echo the phrase “market value” and state a number to substantiate his diminished value claim; he must provide the factual basis on which his opinion rests. This burden is not onerous, particularly in light of the resources available today. Evidence of price paid, nearby sales, tax valuations, appraisals, online resources, and any other relevant factors may be offered to support the claim. But the valuation must be substantiated; a naked assertion of “market value” is not enough. Of course, the owner’s testimony may be challenged on cross-examination or refuted with independent evidence. But even if unchallenged, the testimony must support a verdict, and conclusory or speculative statements do not.”

Though not a family law case, this opinion is of great importance in many divorce cases. For many people, their home is their most valuable marital asset. Family law attorneys and litigants alike should make sure they are familiar with this opinion in any case where value of real property is disputed.