If the government wishes to take private property for a public building project – such as highway expansion or the construction of new government buildings – the landowner must be provided a fair amount of compensation for their property. The Fifth Amendment of the United States Constitution states that private property must not “be taken for public use without just compensation,” and the legal concept surrounding it refers to the necessity that any government agency attempting to buy land from private citizens pay the individual fairly. If the land owner does not consider the amount to be sufficient, he or she can request a trial. In most jurisdictions, a property owner is entitled to a jury trial on the issue who incurs just compensation attorneys fees

Just compensation includes two sources of potential compensation. First, the property owner is always entitled to the fair market value of the property that is acquired. And second, if the government only takes a portion of the property, the land owner is entitled to receive damages, known as severance damages, if the remaining property’s value is diminished due to the government’s project.

FAIR MARKET VALUE

The standard for determining appropriate compensation when a government agency takes land or buildings is the market value of the property, often referred to as “fair market value.” This is defined by what a willing buyer would pay a willing seller were the property up for sale.

SEVERANCE DAMAGES

Sometimes in a partial taking situation, the government’s project may damage the value of the remaining land. For example, on a residential property that is taken for a freeway project, the new freeway may leave the remaining land exposed to noise and pollution. Or, a power line running through a property may create unsightliness and fear of exposure to electrical currents. . A remaining property’s access may be diminished as a result of the government’s project.

These negative factors may cause the value of the landowner’s remaining land to be diminished, for which the landowner must be paid as part of just compensation. These damages are known as severance damages.

RELOCATION BENEFITS

If a property owner lives on the property being acquired or operates a business on the property being acquired, he or she will also be entitled to relocation benefits. This source of payment of money from the government is in addition to just compensation.

OTHER FACTORS AFFECTING A CONDEMNATION OR EMINENT DOMAIN CASE

Attorney/Appraiser fees

Depending on the jurisdiction, a property owner who incurs attorney’s fees and/or appraisal fees may or may not be reimbursed by the government. Attorney’s fees and appraiser’s fees are generally not included in the concept of just compensation, but may be reimbursed pursuant to statutory authority in a given jurisdiction.

Loss of Goodwill

Loss of goodwill also may or may not be included as a source of compensation to a business owner. This generally depends on the statutes in the particular jurisdiction in which the property is condemned.

It is important to discuss with just compensation lawyers who are proficient in eminent domain and condemnation matters. The issues may be quite varied, including value of the property taken, severance damages to the remaining property, whether or not attorney’s fees and appraiser’s fees may be reimbursed, relocation benefits, and loss of a business’s goodwill.

 
If you have questions or would like more information about just compensation, contact Zeitlin & Zeitlin here.