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The Question of Just Compensation: Building a Strong Valuation Case in Eminent Domain Proceedings

Real Estate Finance Journal

  • November 29, 2019

Atlanta partner Christian Torgrimson wrote an article that published in the Fall 2019 issue of Real Estate Finance Journal discussing three approaches to proving the value of “just compensation” when authorities with the power of eminent domain exercise their legal authority in taking or damaging private property.

Torgrimson explains, “Eminent domain refers to the authority to take private property for a public use or purpose, and “condemnation” refers to the procedure or method by which the authority is carried out.” A question asked across all 50 states is what constitutes “just compensation” for the property taken or damaged?

“The constitutional requirement of just compensation provides that the government shall pay for all property interests taken and/or damaged in order to make the property owner whole, or in as good a position as if the property had not been taken,” says Torgrimson. Fair market value is used as a measuring stick to answer the question of just compensation. Torgrimson discusses three approaches to valuation: sales comparison approach (most often used), income approach (second approach), and cost approach.