April 9th, 2021 — In
What Does Fair Market Value Mean in Determining Just Compensation?
This Article is written by Owners’ Counsel of America for general informational purposes only. It is intended to assist landowners by providing them with some basic information about the concept of “Fair Market Value” as it pertains to the determination of just compensation in an eminent domain case. This Article is not to be viewed as providing legal advice or to be considered as a substitute for consulting with an experienced eminent domain, takings or property rights lawyer on the matters covered herein. The definition of all hyper-linked terms can be found in the Dictionary of Key Terms on the OCA Website. Just Compensation The Fifth Amendment of the United States Constitution provides that private property may not be taken for public use without payment of just compensation to the private owner of the property. A property owner should be fairly and fully indemnified for the loss of the property. As such, an owner has the right to recover the equivalent in financial compensation of the property condemned. Through the payment of just compensation, a landowner is entitled to be restored to the financial position he or she would have been in had the property not been taken. Generally, the measure of compensation for property taken by eminent domain is its fair market value. Fair market value is a practical standard to aid the parties and courts in determining what constitutes just compensation. Fundamentally, this involves obtaining one or more appraisals of the property being condemned. Fair Market Value Almost every state ties […]