What is Just Compensation in Eminent Domain?

Summary of Just Compensation

As a property owner, you need to be made whole for your property when impacted by eminent domain

Under our federal constitution and all of the state constitutions, the government has the right to take property from a private property owner. This is called the power of eminent domain. In order to accomplish a taking, there are two requirements:

Just compensation is, therefore, the remedy that the owner has for losing the property that is taken.

There is an important distinction between the federal constitution and many state constitutions regarding what government action triggers the payment of just compensation. Under the federal constitution, the government is only required to pay just compensation if property is actually taken. Under most state constitutions, the just compensation requirement is expanded. Like the federal constitution, state constitutions do require the payment of just compensation when property is taken. Additionally, though, just compensation must be paid if property is only damaged but not actually taken. This can be an important consideration in certain situations.

An Example of Just Compensation

A simple example explains this point. Consider a new highway is built without requiring land from a property owner. After the project is completed, drainage from the highway now floods the property and damages it. The owner fills in the flooded area to eliminate the flooding. The cost to fill in the flooded area to correct the flooding problem is the just compensation for this property owner. But this just compensation claim is the result of damage to the property rather than a taking of the property. Just compensation would not be awarded under the federal constitution, but it would be awarded under state constitutions.

It is also important to know what remedies do not qualify as just compensation when property is taken. Just compensation does not allow a property owner to demand a replacement property, even if one is readily available. Likewise, an owner cannot demand that just compensation require the government to buy the owner’s remainder property, even if that remainder is useless to the owner. (At least one state allows some relief where the remainder is an uneconomic remnant.) Just compensation does not allow an owner to demand any relief that would make the taking less onerous. The simple rule to remember is “just compensation can only equal money”. Anything an owner seeks for a taking, other than money, will not be just compensation.

Prohibitions For Non-Monetary Relief

These prohibitions for non-monetary relief for just compensation simply restrict what an owner can legally demand in court. Any of these non-monetary items can be requested by an owner during the negotiations to settle a claim for just compensation. While the likelihood of receiving any of these non-monetary items to resolve a just compensation claim is low, they have been known to happen from time to time. Just remember, if you can’t get non-monetary relief in a negotiation, you can’t get it from a court order. The court can only award money as just compensation.

There are circumstances where an owner is not entitled to receive just compensation.

Even when property is damaged, and not taken, by government action, there are circumstances where an owner is not entitled to receive just compensation. Any time the government damages private property through the exercise of police powers, an owner will be denied the right to receive just compensation. Police powers are government actions undertaken to promote the safety or welfare of the community at large.

A recent example illustrates this point. A criminal, in an attempt to escape police, broke into a house and engaged in a gun battle with police. The criminal was ultimately apprehended, but only after the house was literally destroyed by the police. In what seems a grossly unfair result, the court denied just compensation to the owner because the police were only exercising police powers.