Just compensation

Full indemnity for the loss or damage sustained by the owner of property taken under the power of Eminent Domain. The measure generally used is the Fair Market Value of the property at the time of taking.

The amount paid to the owner of a property when it is acquired under Eminent Domain. See Condemnation.
Example: Property is condemned to construct a sewage treatment plant. The owner is entitled to just compensation equal to the Fair Market Value of the property taken.

The amount government must pay the owner to take property by exercise of the power of eminent domain. The Takings Clause of the Fifth Amendment limits the use of eminent domain. Most important of these limitations is that “just compensation” must be given to the person from whom property is taken. Most state constitutions contain similar language. It seems to have been the customary, if not universal, practice for American colonial governments to award compensation when private property was taken for public purpose. The same practice can be traced back in England into the early fifteenth century.

Just compensation means the fair market value of what the owner has been compelled to transfer to the government. This amount is determined by a court. Fair market value is the sum of money that a willing buyer would pay a willing seller in a bargained‐for sale upon the open market. That amount is a matter of opinion, upon which testimony is received from the owner and from expert appraisers. A recent sale price is strong evidence of value. In some cases, the owner is entitled to additional compensation for severance damages. This occurs when only part of a parcel of land is taken, but the taking of that part makes the remaining part less valuable. Also, in some cases when the project will confer special benefits on the owner, the value of those offsetting benefits may be credited against the award.

.

See also Public Use Doctrine

— William B. Stoebuck

The 5th Amendment to the U.S. Constitution states, “No person shall be… deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use without just compensation.” The 5th Amendment recognizes the property rights of individuals and guarantees that the government must provide fair payment to a person whose property is taken for public use. Just compensation is determined by the market value of the property—the amount of money a willing buyer would pay a willing seller for the property in an open and free marketplace. In Chicago, Burlington & Quincy Railroad Co. v. Chicago (1897) the Supreme Court ruled that state and local governments are required to pay “just compensation” when taking private property for public use. In this case a public street in Chicago was opened across a privately owned railroad track.

See also Eminent domain

Equitable remuneration to the owner of private property that is expropriated for public use through condemnation, the implementation of the governmental power of eminent domain.

The Fifth Amendment to the U.S. Constitution proscribes the taking of private property by the government for public use without just compensation. No precise formula exists by which the elements of just compensation can be calculated. Ordinarily, the amount should be based upon the loss to the owner, as opposed to the gain by the taker. The owner should be fairly and fully indemnified for the damage that he or she has sustained. The owner has a right to recover the monetary equivalent of the property taken and is entitled to be put in as good a financial position as he or she would have been in if the property had not been taken. Generally, the measure of damages for property condemned through eminent domain is its fair market value, since the sentimental value to the owner is not an element for consideration. Market value, however, is not an absolute method of valuation but rather a practical standard to aid the courts in their determination of just compensation based upon constitutional requirements.

When just compensation is assessed, all elements that can appropriately enter into the question of value are regarded. For example, the original cost of the property taken, added to the cost of reproduction or replacement, minus depreciation, can be considered when the market value of property is determined.

This article does not cite any references or sources. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (January 2009)

Just Compensation is required to be paid by the Fifth Amendment to the U.S. Constitution (and counterpart state constitutions) when private property is taken (or in some states, damaged) for public use. For reasons of expedience, courts have been generally using fair market value as the measure of just compensation, reasoning that this is the amount that a willing seller would accept in a voluntary sales transaction and therefore it should also be payable in an involuntary one. However, the U.S. Supreme Court has repeatedly acknowledged that "fair market value" as defined by it falls short of what sellers would demand and receive in voluntary transactions.

Market value is the prevailing but not exclusive measure of just compensation. In unusual cases other measures of compensation can be used. United States v. Pewee Coal Co., 341 U.S. 114 (1951) (increased operational loss of a coal company during its temporary seizure by the government deemed to be the measure of compensation). Fair market value is defined by appraisers as the most probable price that would be paid by a willing but unpressured buyer to a willing but unpressured seller, both being fully informed as to the property's good and bad attributes, including its highest and best use which may not be the same as the use to which the property is currently being put.

The fair market value formulation assumes that the property has been exposed for sale in the market for a reasonable period of time, so that the owner may secure top dollar for the land. In eminent domain cases, the standard is often not the most probable price, but the highest price obtainable in a voluntary transaction. Since the condemnation deprives the owner of the opportunity to take his or her time to obtain top dollar in the market, the law provides it.

Market value does not include incidental losses (e.g., cost of moving, loss of business goodwill, etc.), but some of these losses are made compensable in part by statutes, such as the federal Uniform Relocation Assistance Act and its state counterparts. The judicial denial of compensation for business losses inflicted when a business conducted on the taken land is destroyed by the taking, has been the subject of much controversy and severe criticism by legal commentators. Nonetheless, only one state (Alaska) allows their recovery in all cases and so do a few others upon a showing that it is impossible for the affected business to relocate. Some states allow recovery of business losses by statute.

Likewise, the property owner's attorneys' and appraisers' fees are not included in just compensation (except in Florida where they are awarded in all cases under the state courts' interpretation of the Florida Constitution). In some states they are recoverable when the owner recovers compensation that exceeds the condemnor's offer or evidence by a specific amount. In California and New York an award of such fees is discretionary with the court.

This entry is from Wikipedia, the leading user-contributed encyclopedia. It may not have been reviewed by professional editors (see full disclaimer)