Obtaining Just Compensation for a Government Taking Under Eminent Domain

Although the federal or state government may have a right to take an individual’s property for public use under eminent domain laws, one of the requirements is providing the land owner with “just compensation.” While this is a protection guaranteed by the U.S. Constitution, determining just compensation for the government taking land can be extremely complex. It’s important for property owners to have a basic understanding of what “just compensation” means and how the government determines the value of a property before accepting any offer for their land.

What is Just Compensation?

Under North Carolina law, just compensation for the taking of an entire property is the fair market value on the date of the taking. Regardless of how long the property has been in one’s family, the government does not consider the sentimental value of a property or the emotional impact of the taking. However, the owner’s opinion regarding the valuation of the property may be admitted into evidence along with an appraiser’s opinion. This opinion is usually supported by evidence of the length of the owner’s experience, knowledge and ownership of the property.

Sometimes, the government only seeks part of a tract of land. If the taking is less than the entire property, this is considered a “partial taking.” In such cases, the compensation will be measured by the difference in fair market value of the entire parcel immediately prior to the taking and the fair market value of the remainder after the taking. In other cases, compensation may be based on the greater of either the fair market value of the land that has been taken or the difference in fair market value immediately before and immediately after the taking.

If an owner is permitted to remove timber, fixtures, or permanent improvements from the property, the value will be excluded from compensation; however, the cost of removal may be considered for compensation.

How Does the Appraisal Process Work?

The government ordinarily uses an appraisal to support its determination of the amount it will offer a property owner for a taking. The appraiser must assess the highest and best use of the property. Under North Carolina law, there are three basic methods that can be used to place a value on a property, including the following:

• Comparable sales approach — Also known as the market approach, this method typically compares properties that have been purchased and sold. It considers factors such as physical characteristics, the size and shape of a parcel, the geography and topography of the land, location, and the conditions of sale.
• Income capitalization approach — This method is usually applied to property that produces income. It considers the property’s earning capabilities based on income capitalization to determine the value.
• Cost approach — In many cases, properties may have unique structures that cannot be repurposed. The cost approach evaluates the cost of replacing any improvements to the property, minus depreciation, in addition to the value of the land.

The appraiser will draft a written report which the government will use to make an offer to the property owner. It’s not uncommon for the government’s offer to be low. Notably, the government’s appraiser is working for the government. A property owner has every right to bring their own appraiser or expert into the lawsuit to provide an opposing assessment.

What Happens if the Government Does Not Offer Fair Compensation?

In cases involving the government taking land under eminent domain, just compensation is often a highly contested matter and subject to legal challenges. This is because the government typically offers much less money for the property than it is worth. Often, just compensation disputes can be worked out through negotiations with the government and the need for litigation may be avoided. But while a property owner is not required to accept the first offer, they also cannot stop a taking. If an owner still refuses to accept the government’s offer after negotiations, the government may file a condemnation lawsuit which allows it to seize the property. Typically, the government makes better offers during litigation than before.

In very limited circumstances, a property owner may be able to stop the government from taking their land. For instance, the government may be stopped if the current owner can prove that the government is not fulfilling its responsibilities under eminent domain in some way — or the taking is not for public use. It is important to note that this is extremely rare.

Additionally, in some instances, a property owner may also be able to file an inverse condemnation claim. Inverse condemnation occurs when the government takes or damages private property without following the proper steps for a taking. The property owner then has the right to seek a court order to force the government to compensate them for the economic value of what was damaged or destroyed.

Contact an Experienced North Carolina Eminent Domain Attorney

If you are facing a land condemnation matter, it’s crucial to have a knowledgeable property rights attorney by your side to ensure you receive fair compensation for your property. Located in Charlotte, Murray Law provides reliable representation to landowners concerning a wide range of land use matters, including those involving just compensation. We welcome you to call Murray Law’s Charlotte office at 704-940-9095 to schedule a consultation to discuss your case.