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October 12th, 2015 — By — In Articles

Just Compensation, Relocation Expenses and Attorneys’ Fees: Financial Compensation in Eminent Domain

Property owners who have their land condemned by the government are entitled to just compensation. This is a fundamental right established by the Fifth Amendment to the U.S. Constitution and contained in state constitutions as well.

While these constitutional protections are often the greatest source of compensation for property owners in eminent domain cases, they are not the only sources. Depending on the circumstances, various statutes may provide additional financial recourse for individuals and businesses that have their property taken using the power of eminent domain. These statutes often:

  • Require payment of more than “just compensation” under certain circumstances
  • Entitle property owners to recover their attorneys’ fees for defending their rights in a condemnation suit
  • Provide property owners with compensation for their relocation costs.

Calculating Just Compensation

As noted above, when the government exercises its power of eminent domain, it is required to pay just compensation to the owner of the property acquired. This begs the question: Who determines what is “just”?

Generally speaking, the amount of compensation is based upon an appraisal of the property which may account for not only the land to be acquired but also the damages to any remaining property. This is not necessarily the market value or the tax value of the property taken, but rather a value of the property taken valued at its “highest and best use” plus damages to remaining property.

Unless a property owner accepts the government’s first offer, what is “just” may be determined (1) through negotiation between the government, (2) by court-appointed Commissioners, (3) by a Judge, or (4) by a jury.

Some state laws provide that property owners are entitled to more than just compensation, which may include recovery of business damages or loss of “good will”, payment of attorneys’ fees, expert fees and/or costs as well as additional compensation for the property taken.

While state governments have challenged these laws on several occasions, the courts have generally favored the property owners’ statutory rights. For example, a Minnesota court recently upheld a statute that required application of a formula that calculated a greater amount, referring to just compensation as the “minimum constitutional requirement.” A Missouri court recently upheld a statute requiring additional compensation for “Heritage Value” to long-time property owners as well.

Recovery of Attorneys’ Fees

Some states also have laws entitling property owners to recover their attorneys’ fees for challenging the government’s exercise of eminent domain. These statutes are not absolute – meaning that they don’t apply in every case – but when they do apply they provide valuable benefits to property owners. As an example, Ohio law provides that property owners can recover their attorneys’ fees if the final compensation awarded is 125 percent or more of government’s good-faith offer prior to litigation.

Reimbursement of Relocation Expenses

Along with attorneys’ fees, property owners in condemnation cases often face out-of-pocket costs in the form of relocation expenses. The Uniform Relocation Assistance and Real Property Acquisition Policies Act establishes property owners’ rights to recover relocation expenses at the federal level, though this too is a matter generally addressed at the state level and on a case-by-case basis. Read more in our eminent domain FAQs.

Speak With One of Our Eminent Domain Lawyers at Owners’ Counsel of America

If the government is trying to take your property, the attorneys at Owners’ Counsel of America (OCA) can help you protect your rights and fight to secure the compensation you deserve for the taking of your property. Find an attorney in your state or call OCA at (877) 367-6963 for more information.