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Just compensation in your eminent domain case

On Behalf of | Nov 22, 2021 | Eminent Domain |

Just compensation in your eminent domain case

The government wields a lot of power, even when it comes to dictating the terms of real estate use. Sure, zoning regulations and easements can affect your residence or your business to a significant extent, but there’s no greater intrusion into your life when it comes to real estate than the exercise of eminent domain.

Eminent domain is the process through which the government takes your land in order to convert it to public use. This taking is allowable under the U.S. Constitution, so long as the government provides the property owner just compensation in exchange for the taking. That might sound simple enough, but in reality, the determination of what constitutes just compensation can be enormously complex.

The basics of just compensation

 In its most basic terms, just compensation should make a landowner whole. This means that he or she should get the fair value of the land, but this valuation process can have its own complications. This is because there are a number of ways to valuate a piece of property, and different results can stem from each process.

Fair market value

 In many cases, the fair market value of the land is used to determine what constitutes just compensation. Here, a number of factors must be taken into consideration to determine the value of the property in the current market. Characteristics such as the size and condition of the property, how the property is zoned, the current and potential use of the land, it’s development potential, the prices of comparable homes or businesses in the area, and any other unique characteristics that may increase or decrease the property’s value are taken into account.

Income method

When the taking involves and income-generating property, then an income method may be used to determine just compensation. Here, the income generated by the property must be accurately calculated, and then a capitalization rate is used to determine the value of the property. This, in turn, gives the fair value that should be paid in order to constitute “just compensation.”

The cost approach

 This method of calculating just compensation applies to situations where a unique feature on the property that is being taken will need to be recreated on new land. In these situations, the parties and the court will need to not only determine the value of the land that is being taken, but it must also assess the costs that will be required to recreate the unique feature that is being taken by the government.

Know how to protect your land rights

 As you can see, there can be a lot of room for argument when it comes to just compensation. And that’s just when the parties agree that a taking has occurred. In some instances, the government denies that it has taken a piece of land, but the damage caused to the landowner’s property by the government’s actions may so restrict the use and enjoyment of the landowner’s property that the government’s action essentially equates to a taking. If you find yourself in this situation, then you’ll have even more legal arguments that you’ll need to make to protect your interest and secure the compensation that you deserve.

We know that it can be stressful to deal with real estate issues, especially when the government is involved. But you don’t have to let your fears paralyze you into inaction. Instead, you can competently and confidently stand up to the government and fight for the outcome that you deserve if you’re armed with compelling evidence to support your position. Fortunately, this isn’t a process you have to face alone, as skilled legal professionals like those at our firm stand ready to assist.