The term “just compensation” is a crucial part of the eminent domain process.
The concept is fairly simple: if the condemning entity is permitted to take your land or property rights then, in return, the property owner is supposed to receive just compensation for that land or the rights. However, practically speaking, determining exactly what “just compensation” is for a slice of land or for certain property rights can be difficult. That is where appraisals come into play.
Real estate appraisals can be a key part to allowing property owners to see how the condemning authority arrived at the price that is being offered for land or property rights. Appraisals are quite common in any real estate transaction, and eminent domain cases are no different. There has to be a way to determine what price to offer to property owners.
Unfortunately, sometimes the appraisal process can be a bit complicated, depending on the type of land or property rights in question.
For example, sometimes it can be difficult to find similar land or comparable sales – which is usually the main method of comparison to find equivalents in prices.
Or, perhaps the taking impacts a business or other income-producing land. In the end, the appraisal result is ultimately a person’s opinion – albeit a supposedly qualified person’s opinion. That opinion, of course, could be somewhat subjective and could be challenged.
As a property owner, your main goal when subjected to an eminent domain case is usually to maximize the value of your assets. Just be sure that the appraisal upon which the “just compensation” offer is based on is correct in its methodology and results.