If you’re a property owner facing eminent domain, you may be feeling overwhelmed and blindsided by the position you suddenly find yourself in. Although stopping eminent domain entirely is difficult, it’s important to note that you are entitled to just compensation in exchange for your land.
But what is just compensation for eminent domain? And how is it determined? We’ll guide you through the definition and factors influencing just compensation for eminent domain.
What Does Just Compensation Mean?
Just compensation is a term used to describe the monetary amount a landowner is entitled to when the government takes their property for public use. Just compensation should be equal to the fair market value of the property acquired.
On the surface, then, this definition is relatively straight-forward; however your opinion on what you are entitled to maybe, and likely will be, significantly different than what the government or condemnor offers you. And because property valuation is entirely subjective, there’s no hard and fast rule for who is right. Reasonable (and unreasonable) minds can differ. It is up to the landowner to challenge the compensation offered–and ultimately received–for the land taken.
What Factors Influence Just Compensation?
Just compensation is determined by considering a variety of factors, such as:
-Fair Market Value of Land: What is the underlying value of the property? What have similar properties recently sold for in the area?
-Fair Market Value of Land Improvements: Is there a business or structure on the property? Does the structure, or a business lease, add value to the property?
-Highest and Best Use: What use can the property be put to that bring the highest value on the land? Should the property be valued based on what it is currently being used for or what it could be used for? E.g. is the land a commercial/development property or residential/agricultural?
-Residue Damage: If the acquisition is merely for a portion of the property, what effect will the acquisition have on the remaining property?
-Relocation Benefits: If the acquisition is taking the entirety of a property or forcing a relocation, how much will it cost to relocate your business or home? This amount should be factored into your compensation.
How to Value Your Property for Eminent Domain
There are three main approaches to appraising property: the sales comparison approach, the income approach, and the cost approach:
-Market Approach: What are similar properties being sold for on the open market and how do those properties compare to yours?
-Income Approach: How much income does the property being seized generate?
-Cost Approach: Are there any structures or features on this land that are so unique that they cannot be valued by comparing them to other properties? If so, it may be appropriate to value those structures based on a depreciated cost approach.
Get the Just Compensation You Deserve
Don’t battle the government on your own. Get the just compensation you deserve by contacting Sever Storey today. Our experienced landowner attorneys will ensure you get fair treatment and receive the market value for your land. We’re happy to answer all of your questions and support you in this difficult time.
