How Is Property Valued In Eminent Domain Cases?
- 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
Do you need assistance with legal issues involving eminent domain? Our real estate lawyers in PA can help.