How is Property Fairly Valued in Eminent Domain Cases?

Although most people are familiar with the general concept of eminent domain, understanding how just compensation is determined is critical if you are faced with the prospect of your property being taken. Seeking the counsel of experienced real estate lawyers can help you understand and protect your rights and ensure that you receive the full and fair compensation to which you are entitled.

What Is Eminent Domain?

Eminent domain gives the government the power to take private property for public use. The Fifth Amendment of the United States Constitution and Article 1, Section 10 of the Pennsylvania Constitution both require the government to provide just compensation to property owners when exercising eminent domain. In some cases, public utilities such as gas and oil companies are also able to take private property, which has become a point of contention in recent years with companies building interstate and intrastate pipelines.

How Is Property Valued In Eminent Domain Cases?

There are several factors that may be involved in determining the value of property in eminent domain cases, including:

• Zoning – whether the property is residential, commercial, agricultural, or industrial
• Size of the property and whether the taking is total or partial
• What type of entity is seeking to obtain the property and its purpose for use
• Whether a business is involved and how the taking will affect its operation
• Other factors unique to each situation

There are also a few different ways that the market value of a property may be determined. The market approach uses recent sales of comparable properties, which usually works well for residential property. However, for commercial or income-producing properties, net operating income and projected future income are taken into account as well as an appraisal. If a property includes a structure that is designed for specialty use, the cost approach may be used. First, the value of the land is determined and then the cost of replacing or duplicating any existing specialty structures is calculated.

Although determining fair market value may seem straightforward, it is open to interpretation and negotiation, especially when a business is involved or an entity is requesting only a portion of the property. If you own a business or commercial property, it is important to seek the counsel of business lawyers who are well-versed in these matters to ensure your property and business are accurately valued and you receive the just compensation you deserve.

What to Do If You Receive Notice of Eminent Domain Proceedings

If you receive a letter or other notice that your property may be taken for public use, it is important to respond as soon as possible. Whether you want to fight to keep your property or you are concerned about its valuation, a West Chester real estate attorney can advise of your rights and options and advocate on your behalf. Even if it seems like a simple case involving an easement on rural property, it is always a good idea to hire a lawyer who can help you achieve the best possible outcome.

Do you need assistance with legal issues involving eminent domain? Our real estate lawyers in PA can help.

This blog was originally posted at https://carosella.com/how-is-property-fairly-valued-in-eminent-domain-cases/