Thursday, September 11, 2014

Eminent Domain: Understanding The Difference Between Full Compensation And Just Compensation

By Angela B. Rauber

The Florida Constitution requires that condemning authorities in Florida pay “full compensation” when taking privately owned property for public use. Art. X, § 6(a), Fla. Const. The federal government, on the other hand, requires the payment of “just compensation” for governmental takings. Although the legal term differs by one word, the difference Florida’s requirement makes for private property owners and condemning authorities can be significant.

“Just compensation,” as required by the federal Constitution, is calculated by determining the market value of the property at the time of its taking. Olson v. United States, 292 U.S. 246, 255 (1934). That is, the condemning authority is required to pay the “amount that in all probability would have been arrived at by fair negotiations between an owner willing to sell and a purchaser desiring to buy.” Id. at 257. Although there is no precise formula, the calculation of market value should calculate “all considerations that fairly might be brought forward and reasonably be given substantial weight in such bargaining.” Id.

In contrast, Florida requires the payment of full compensation for governmental takings of property. The determination of full compensation “requires that courts take into account all facts and circumstances which bear a reasonable relationship to the loss occasioned an owner by virtue of his property being taken.” Behm v. Dep't. of Transp., 383 So. 2d 216 (Fla. 1980) citing Jacksonville Expressway Auth. v. Henry G. DuPree Co., 108 So. 2d 289, 291 (Fla. 1959). Thus, Florida courts look at the value of the property and the associated cost of its loss.

In addition to full compensation, Florida law requires additional types of compensation to be paid for takings as set out in section 73.071, Florida Statutes. Id.; see also Jamesson v. Downtown Dev. Auth., 322 So. 2d 510, 511 (Fla. 1975). Compensation must include the value of the property plus severance and/or business damages caused by loss of the property if less than the entire property is taken and certain statutory criteria are met. § 73.071, Fla. Stat. Removal or relocation expenses incurred by mobile home owners may be required. Id. In addition, Florida law requires the payment of attorneys’ fees and costs in accordance with sections 73.015, 73.092, and 73.093, Florida Statutes.

Attorneys representing either landowners or condemning authorities in eminent domain settlement proceedings should be prepared to address the value of the specific property both in terms of its market value and the cost of its loss to the owner. Some factors may seem obvious, such as access, visibility, and easements. Other factors require anticipation of future consequences after the taking is completed. For example, property owners may not be able to rebuild accessory structures, such as storage sheds or signs, on the remainder due to a reduced lot size or changes in zoning or building regulations. Although not every item a creative attorney can imagine will be compensable, the most effective attorneys will be those most prepared to address potential damages requiring full compensation.