Eminent domain is generally the government’s ability to seize private property for public purposes. It is a power granted by the Fifth Amendment to the United States Constitution, and it exists to ensure that the public has streets, sewers, power lines, and much of the other 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. Sounds easy, but it becomes difficult when applied in real life, particularly with temporary construction easements.
Before I go any further, I want to stress 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 lot 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 highway, 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 expanding Mercer Street, it would need not only the property for the actual highway, 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 of the actual construction area is often referred to as a temporary construction easement, since 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 established and applied to the amount of time the property is to be rented; or a percentage of the total value of the property is taken and multiplied 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 that is lost at the time.
For example, suppose that by widening Mercer Street, the Seattle Department of Transportation’s construction easement would close one of the driveways to your gas station, making it nearly impossible for traffic to get to and from your business. The true value of the easement is much higher than the result using the two previous methods. It can be the full rental value that could be derived from the property during the time the construction easement is in use.
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 a property in Seattle near Mercer Street, would you expect a rate of return of 8% or 10%? This difference could have a large 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 property owner whose property is being encroached upon for a temporary construction easement or other type of temporary easement, contact a eminent domain attorney today for help.
