Partial Takings in Eminent Domain: Non-Conforming Use

We have been discussing partial takings in eminent domain, specifically addressing different valuation concepts that contribute to the determination of damages for a property owner affected by a partial taking eminent domain case.

The next example I’d like to discuss involves a situation where the partial taking creates a non-conforming use.  Let’s imagine a road is being expanded or widened in front of a commercial property with a setback of 30 feet from the roadway, which is in compliance with zoning and city ordinances.  As a result of the acquisition, the new setback is only 15 feet, or maybe down to as low as 10 or 5 feet from the front of the building, which is no longer in compliance with the zoning.  Frequently, the condemning authority will only pay for the direct damages (value of land actually acquired), and fail to acknowledge severance damages resulting from the building that is now non-conforming.  Instead of compensating the land owner for the severance damages, the condemning authority will recognize that as long as the property maintains its current use, then it will be grandfathered, and the property owner can carry on with business as usual.

However, the astute property owner needs to understand that grandfathering can limit the building and business to its existing use and condition, because ordinances might prevent a non-conforming property from expanding or making improvements.   Consequently, if you have a property where a non-conforming use has been created, then you need to understand that you might not be able to expand or make improvements to the existing building without first tearing it down.   This can significantly reduce the value to the remainder, a concept that is typically ignored or neglected by the condemning authority when they determine the amount of just compensation that a property owner is entitled to receive.

Any situation that results in a non-conforming use will or should generate a level of damages that are frequently ignored or not factored in by condemning authority.  Property owners need to be vigilant about determining what types of non-conformity might exist as a result of a taking, because if that claim is not made at the time the taking occurs then any future claim for damages cause by that non-conformity will be lost against the condemning authority.