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Relocation Benefits in Eminent Domain

In eminent domain cases that result from  transportation projects or any public use project, an owner’s only remedy is to insure that full payment is received for the property taken (direct damages) and any resulting loss in value to the property that remains (indirect, or severance damages).  Property owners are also entitled to relocation benefits when forced to relocate their business or residence as a result of the taking.

Relocation is an administrative process established by the condemning authority that varies widely from city, county and state.  When a claim for relocation benefits is initiated, the record is typically with the agency and any appeals must be handled at the trial court level, or possibly the court of appeals.  Very little case law exists on relocation, and the process for handling these cases depends largely upon the agency involved.

Normal relocation benefits include actual moving of personal property and reestablishment costs such as printing new stationary and business cards, etc.  A claim for relocation benefits is independent of the eminent domain additional damages claim and is typically negotiated between the property owner and the condemning authority.  Complex relocations do arise for businesses with expensive fixtures and equipment, and consequently it may become necessary for a business owner to enlist the help of an eminent domain expert to calculate and negotiate these costs with the condemning authority.

An example of a more complex relocation situation involves a case we evaluated a while ago where the subject property was a dry-cleaning facility that will be acquired by the department of transportation for a highway project.  The owner does not want to give up the business and intends on relocating.  The primary valuation issue in this case revolves around the significant equipment that owner has on site used to handle the actual cleaning process.  Beside the multiple cleaning machines, there is a special chiller on the roof of the building that is necessary to allow the cleaning machines to operate.  The cleaning machines are very functional, however, they are not the current generation of cleaning equipment.  Consequently, the owner cannot receive authorization to move these pieces of equipment to another location.  When they do relocate, they will need to purchase new machines and the chiller that would be necessary to complement these new machines.

Through conversations with the State’s appraiser, the property owner learned that the appraisal methods he intends to use will not come close to satisfying the funds needed to reestablish this equipment at a new location.  In this situation, it is more advantageous for a property owner to claim costs associated with the new equipment as part of the claim for relocation benefits, assuming state law allows this.

Every relocation benefits case is different.  If you own and operate a business with expensive fixtures and machinery such as a chemical plant, manufacturing facility, auto-repair business, dry cleaning business, dry dock or ship repair, etc, then you will likely want to enlist the help of an eminent domain expert.  If you are a residential property owner forced to relocate your home, then hiring an expert might be cost prohibitive and instead, you might want to handle the negotiations on your own.


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