Does Eminent Domain Require Fair Compensation?

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Historically, sovereign governments have the power and authority to appropriate land within their own borders for whatever purpose that they see fit. The ability to do this is referred to as “eminent domain” and is effective nationwide. Because of this, the Fifth Amendment to the United States Constitution places important limitations on the power of eminent domain. The amendment reads, “nor shall private property be taken for public use, without just compensation.” This important piece of the amendment is known as the “takings” clause.

The “takings” clause includes two elements:

  • Any taking by a government must be for a “public use”
  • Any government that does take property, even for a public use, must fully compensate the owner of the property

Two issues that often come up in eminent domain cases:

  • What is considered public use?
  • How is fair compensation defined?

Even if a property owner is given just compensation, a taking is invalid if the property is not actually used for a public use. The public use requirement has been broadly interpreted by courts. Public use does not mean that the government has to allow the public to use the property. Land can be seized by the government for a private person or entity as long as the purpose behind the seizure is public in nature. Alleviating unemployment, stimulating the local economy, and preserving scenery have all been considered public use by courts.

“Just compensation” means that the government has to pay fair market value for the property that is being taken. Fair market value is not necessarily equal to the amount the property is actually worth. A property’s market value can also be impacted by how it will be used in the future.

Do you have more questions about eminent domain and fair compensation? Contact our San Diego team of eminent domain attorneys to get started on your consultation today.

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