As this blog has previously discussed, eminent domain is a significant power the government has to take private property for public use. Public service corporations engaged in a public works projects, e.g. electric utility providers, also have the right to exercise eminent domain power. Because an eminent domain action can deprive the property owner of the use of their property, it is important for property owners to know how they will be compensated.
Eminent domain is also be referred to as condemnation or a taking. Whenever property is taken through the eminent domain process, it must be for a public purpose, and the property owner must receive just compensation for their property. The way that just compensation is determined is important.
Just compensation
The primary component of just compensation is for the property owner to receive the value of the land or property that is being taken by the government. The amount of compensation the property owner should receive is usually determined by what the fair market value for the highest and best use of the property is which is usually determined by an appraisal of the property.
In some circumstances, the government may decide only to take part of the property otherwise known as a partial taking. In the case of a partial taking, the severance of part of the property may negatively affect the remainder left to the owner. In such event, the property owner may also be entitled to receive severance damages for diminution in value to the remainder.
In many instances, the condemning authority will offer the property owner a conservative value for the property being taken. A knowledgeable and experienced condemnation attorney understands the negotiation and litigation strategy of employing a professional appraiser who is skilled in determining fair market values in condemnation settings.
Contested condemnation valuations do not always go to trial but instead are routinely settled between the condemning authority and property owner’s attorneys. Property owners need to know what they should expect to be paid if their property is taken from them for a public use and what their rights and protections are. In that regard, it is wise to be represented by an attorney experienced and knowledgeable in condemnation law, appraisal methodology and real estate law.