Eminent domain is generally the ability of the government to take private property for public purposes. It is a power granted by the Fifth Amendment of the United States Constitution, and exists to ensure the public has streets, sewers, electrical lines, and much of the rest of the public infrastructure that exists today. But, if the government is going to take your property, they must pay you “just compensation.” Just compensation is determined by figuring out what a seller would pay and a buyer would buy if there wasn’t the threat of the government taking the property. It sounds easy, but 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 get the right amount of compensation for your property takes a lot of experience. Please don’t read this article and try to negotiate the sale of your property to the government on your own. Hire an eminent domain lawyer.
In many cases, the land to be used for the road, for example, is not the only property required to complete the public project your property is needed for. For example, if the Seattle Department of Transportation were widening Mercer Street, they would need not only the property for the actual road, but some property outside of that area to move their construction equipment, store supplies, and create what will eventually be the new street. This property outside the actual construction area is often referred to as a temporary construction easement, since once construction is complete the property is returned to the landowner.
But how is this valued? Traditionally it is valued in one of two ways: a set rental rate is established and applied to the amount of time the property is to be rented; or a percentage of the overall property value is taken and multiplied by the amount of time the property is needed. In either case, these numbers can vary widely and can be very far from the true value of the land that is lost for that time.
For example, let’s say that while widening Mercer Street, the Seattle Department of Transportation’s construction easement would shut off one of the driveways to your gas station, making it nearly impossible for traffic to get in and out of your business. The true value of the easement is much higher than the result using the above two methods. It may be the entire value of the income that could be derived from the property during the time the construction easement is being used.
Another problem with these methodologies is that it is often difficult to determine what an acceptable rental rate is or what an acceptable percentage of property value is. For example, as a renter of property in Seattle near Mercer Street, would you expect an 8% rate of return or a 10% rate of return? This difference could have a great 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 landowner whose property is being taken for a temporary construction easement or other kind of temporary easement, please contact an eminent domain attorney today to help.