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What does just compensation in eminent domain cases cover?

On Behalf of | Sep 4, 2023 | Eminent Domain

Eminent domain is a tricky topic for ordinary land and property owners. Nevertheless, they should know its basic elements, especially if their property is subject to government acquisition.

One of the essential elements of eminent domain is just compensation – the amount an owner receives in exchange for their property. If a nonlegal person tries to understand the concept, they will initially think that just compensation is fair compensation.

But what exactly should the compensation cover in order for it to be fair?

The property’s unique value

Comparing a property to the sale price of other properties is an inaccurate method of determining its value. Each property is unique, and the government can only calculate its fair value by considering several factors, the common ones of which include the following:

  • The property’s fair market value
  • The property’s nature, whether residential or commercial
  • The permitted uses of the property
  • The highest and best uses of the property
  • The effect of taking a part of a property on the rest of the property
  • Other economic factors at the time of taking

Other times, the government also considers the property’s features, such as an existing swimming pool, and the property’s overall accessibility.

Relocation expense and business disruption compensation

When offered an agreeable amount for their property, some owners fail to consider that eminent domain not only involves letting go of their property but also gives them the additional burden of finding a new place to relocate. Moreover, if the owner originally used the property for business, the acquisition would disrupt business operations and profit generation.

With these in mind, property owners should ensure that the compensation the government offers also covers these aspects.

Protecting the affected owner’s peace of mind and financial security

Considering these and other factors, the government should produce an amount that would place the owner in the same financial situation as if the taking did not happen. Accordingly, the property owner must protect what is rightfully theirs by ensuring they obtain the maximum reasonable recovery from eminent domain.

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