How Is Just Compensation Determined?

What happens when your town needs your land for a new project? Public projects are all around: new government buildings, utilities, highways, railways, and even public safety. Will you recover fair compensation? Will you take the town’s first offer? Will you haggle over price? Or will ask a judge to decide, with a court case?

Government Power to Take Private Property

A municipality’s power to take privately held land is constrained by the U.S. Constitution’s Fifth Amendment Takings Clause, which states that “private property [shall not] be taken for public use, without just compensation.”

Eminent domain is the name given to the government power to take private property for public use. Condemnation is the formal process by which eminent domain is exercised.

Governments have used eminent domain to acquire more than land—authorities have tried to take personal property, intangible property (such as contract rights, trade secrets, and copyrights) and even a professional sports team (the National Football League’s Oakland Raiders).

Fair Market Value and Appraisers

Fair market value means the price to which a willing, motivated buyer and seller agree in an open market, neither of whom is under a compulsion to buy or sell, nor unduly influenced by other factors. In condemnation cases, experts (appraisers) must prove valuation. They generally use one of three methods:

• Cost
• Income capitalization
• Sales comparison

But What Is “Just Compensation”?

This is where it gets tricky. Condemnation is a harsh exercise of government power. It is forcefully taking someone’s private property. Valuation comprises many factors:

• Is the taking temporary? (For example, where the highway department needs to park construction vehicles during the project)
• Could your property’s zoning change?
• What do similar (comparable) properties in the market sell for?
• Will the partial seizure of your property diminish the value of the remainder? (Known as severance damages)
• What is the highest and best use of the property? (For example, even if you live in a house today, could you construct a store or office on your property?)
• Does your property produce income? (For example, do you receive rents from apartment, shopping center, or office tenants?)

Remember: The government wants to pay less, and the landowner naturally wants to receive more. If faced with condemnation, you need an expert’s help and experience to persuasively present your case and maximize the money that you’re entitled to receive.

Do You Have a Condemnation Case? Call an Experienced Eminent Domain Attorney Today for Help

If your local government, agency, or authority plans a project, that may affect you. The government may subject your property to condemnation—a forced taking. The government will probably make an offer to buy some or part of your land. Don’t sign anything until you consult with an experienced condemnation lawyer. If you’re a landowner facing condemnation, you need to hire the right team. With a seasoned eminent domain attorney, you may receive significantly more money than you would from the first offer.

Trust the professionals at Sever Storey. Call us right away at (888) 318-3761, or contact us confidentially. Our lawyer network serves clients throughout the country, including North Carolina. We’ll fight hard to get you the fair price you deserve.