Just Compensation

The Just Compensation clause of the Fifth Amendment to The Constitution protects landowners when the government takes or condemns land for public use through the eminent domain process. The government cannot take property through this Takings Clause without providing fair and reasonable compensation to the landowner, who is also entitled to due process.

The first step in determining just compensation is to assess the property’s value, measuring the uses for which the property is suitable and market value of the property. If the government’s taking increases the property value, the benefit may be offset from the just compensation amount.

Sometimes, the government may only take a portion of the property. The landowner may be entitled to just compensation for negative impact or decrease in land value to the remainder.

If the government takes property and delays the payment, the landowner is entitled to an additional amount to make up for the delay equivalent to interest. However, if the property owner and the government have a contract and there is no mention of interest, the owner can’t claim it even if payment is delayed.

Some recent just compensation in eminent domain cases have brought attention to the issue. Some contend property owners are increasingly vulnerable to having their homes or businesses taken for economic development projects.

Some also advocate for increasing compensation for eminent domain. They contend that in many cases of condemnation, the agency or the courts disregard the owner’s business loss.

In the past, condemnation limited the taking of private property to public uses that will benefit the entire community. Critics argue that the courts are no longer applying this limited definition, especially in the case of economic uses that benefit business interests.

The amount in just compensation that a landowner will receive in a condemnation depends on the uses for which the property is suitable. It’s based on the property’s market value and other established principles.

For income-producing properties, an appraiser uses complex calculations to determine the property’s income generation. In all cases, it is recommended to appoint an appraiser to determine the just compensation of a property to be condemned.

Kelo v City of New London prompted discussion about how much compensation governments should pay homeowners in eminent domain cases. There have been many proposals to increase amounts.

Experts argue that one of the challenges of obtaining just compensation is that the fair market value standard excludes any consequential damages for real but subjective harms a property owner experiences. However, nothing in the Fifth Amendment speaks to full indemnification for all losses.

Some argue that more robust protections for private property would result in higher compensation for those fighting eminent domain cases in the courts. However, financial compensation based on equivalent value rarely puts homeowners in the same position they were before the condemnation, which critics argue is unfair.

As a property owner, you have rights. In addition to asking questions about how eminent domain will affect you and your land, you have the right to know how the acquiring agency calculated the compensation for your property and to request a copy of the appraisal report. You also have the right to accompany the appraiser on their inspection of your property.

You have the right to negotiate with the acquiring agency or government and provide evidence supporting your position as part of your right to due process. You do not have to accept the first offer made if you do not believe it is fair.

It’s a good idea to work with an experienced eminent domain lawyer who can determine whether the government has a public purpose for taking your property and whether they are taking more land than is required, and to ensure you receive the highest compensation that you are entitled to.