Project Influence Rule: Condemnation Blight

Condemnation Blight

For determining damages in eminent domain claims, there is a concept called the project influence rule that exists in all states; either spelled out in their statute or stated through case law. The project influence rule basically states that any damages you incur in an eminent domain case cannot be influenced by the project itself.

I’ll illustrate this concept through an example.  The most obvious situation relates to farm land located just out of town where a new road will be constructed and intersect with the existing road that fronts your property.   You currently utilize the land for farming, but once the road is constructed, traffic will increase making land in the immediate area increase in value.  Many property owners in this situation recognize the significance of their loss; when the land is taken, they’re losing land that would have been very valuable to them after the project is complete.  Additionally, they will no longer have the opportunity to develop this land.  My response in this situation relates to the project influence rule and that the portion of your land acquired will only increase in value because of the project.   If the project wasn’t constructed, you would continue to use your land as agriculture and the value would remain the same.  Because of the Project Influence Rule, a claimant cannot gain a higher level of damages based upon the value of land that is being created by the project.

On the flip side, you also are not penalized because of the project.  Again, I’ll illustrate this concept by providing an example.  The term that is often used with regards to the project influence rule is ‘condemnation blight’.  This issue typically arises in a redevelopment area where a condemning authority slowly acquires as much land as they can amicably before proceeding with condemnation.  Once acquired, the properties are vacated and typically left standing.  You can imagine that over a period of time the buildings become dilapidated and the neighborhood now consists of vacant, neglected buildings which create condemnation blight.   In some cases, when the condemning authority finally acquires the last remaining properties through eminent domain because a negotiated settlement could not be reached, they will try and base their offer of just compensation on the existing blighted conditions.  Fortunately, the courts will not allow this because the project is causing the condemnation blight and the project influence rule requires just compensation based upon the value of the properties in the market place assuming the activity by the condemning authority had never occurred.

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