Eminent domain is generally the government’s ability to take private property for public purposes. It is a power granted by the Fifth Amendment to the United States Constitution and exists to ensure that the public has streets, sewers, power lines, and much of the rest of the public infrastructure that exists today. But, if the government is going to take your property, it must pay you “just compensation.” Just compensation is determined by calculating what a seller would pay and what a buyer would buy if there was no threat of government seizure of the property. It sounds easy, but it becomes difficult when applied in real life, particularly with temporary construction easements.
Before I continue, I want to emphasize to everyone reading this article that eminent domain is not something you should try to negotiate on your own. It is a very technical area of the law, and determining how to obtain the correct amount of compensation for your property requires a great deal of experience. Please do not read this article and try to negotiate the sale of your property to the government on your own. Hire an eminent domain attorney.
In many cases, the land to be used for the road, for example, is not the only property required to complete the public project for which your property is needed. For example, if the Seattle Department of Transportation were widening Mercer Street, it would need not only the property for the actual road, but also some property outside of that area to move its construction equipment, store supplies, and create what will eventually be the new street. This property outside the actual area of construction is often referred to as a temporary construction easement, as once construction is complete, the property is returned to the owner.
But how is this valued? It is traditionally valued in one of two ways: a fixed rental rate is set and applied to the amount of time the property is to be rented; or take a percentage of the property’s total value and multiply it by the amount of time the property is needed. In any case, these numbers can vary widely and may be far from the actual value of the land being lost at the time.
For example, suppose that by widening Mercer Street, the Seattle Department of Transportation’s construction easement would close off one of the entrances to your gas station, making it almost impossible for traffic to enter and exit your business. The true value of the easement is much higher than the result using the previous two methods. It can be the total value of the rent that could be derived from the property during the time that the construction easement is being used.
Another problem with these methodologies is that it is often difficult to determine what is an acceptable rental rate or what is an acceptable percentage of property value. For example, as a renter of property in Seattle near Mercer Street, would you expect an 8% or 10% rate of return? This difference could have a big effect on the final amount of just compensation.
Determining the value of temporary easements is difficult. It is not an exact science. If you are a homeowner whose property is being taken for a temporary building easement or other temporary easement, contact a eminent domain attorney today for help.