March 2, 2010
Eminent Domain Battle in Virginia
Fox News reported yesterday about an eminent domain battle in Virginia over the amount properly awarded in just compensation. The city that condemned the property offered approximately $20 million, but the landowner claims he received market offers for more than twice that amount prior to the condemnation. In addition to the differing numbers, though, the story raises the larger question of whether property owners are truly made whole by awards limited to fair market value only. Finally, the story reveals an interesting fact that I did not know -- in Virginia, jurors in an eminent domain case must be property owners.
P.S. Thanks to Stetson law student James Kannard for bringing the story to my attention.
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In spite of lofty but insincere phrases used by the courts, eminent domain never makes the owners whole. Not only are they denied compensation for a variety of incidental losses, notably lost business goodwill etc., but the Supreme Court has conceded that its version of "fair market value" does not represent the price that participants in a voluntary market transaction would agree on.
Also, the owner must pay for his appraisers and other expert witnesses, as well as his lawyers, all of which comes off the top of the supposed fair market value. And to add insult to injury, in total takings the condemnor pays nothing for the property (except for transactional costs) because it only exchanges one asset (money) for another asset (land) at the latter's judicially determined fair market value, leaving its balance sheet unchanged.
Posted by: Maven3 | Mar 2, 2010 11:00:30 PM