To continue our discussion on partial takings in eminent domain, I’d like to discuss a concept called cost to cure in eminent domain. The easiest way to illustrate this concept is to through the use of an example.
Assume that a road in a residential area is being widened, and as a result of the expansion the drainage field for the septic system will be destroyed and property owners in the area will need to install new septic systems. The cost to install the new septic system is called the cost to cure. In other words, the problem that was created as a result of this project is now cured by a cost to replace or cure it. This example is very straightforward and fairly simple, but there are other issues or rules that need to be understood when considering the cost to cure.
In certain circumstances the cost to cure can be very expensive; for instance installing a new driveway, installing new parking, possibly installing features on a building that have been removed. Let’s examine a partial taking for a fast food restaurant with a drive-thru window. If a road project cuts off the access in such a way that it is no longer possible to utilize the drive-thru for this fast food restaurant, it will be necessary to reconfigure the restaurant to move the drive-thru elsewhere on the property, if that’s even possible.
In some cases, the change is so extreme that it may not be feasible to undergo the cost to cure. In the fast food example I just provided, if the cost to move the drive-thru window and incorporate this into the building is more than the loss in value to the property if nothing is done to it at all, then the damages in this circumstance are limited by the loss of value. In other words, the damages will be the lesser of the cost to cure the problem, or the loss in market value from the larger parcel in the beginning to the remainder parcel afterward, if the cost to cure is simply ignored and never completed. This analysis is performed by an appraiser and recognized in eminent domain law.
Property owners who find themselves in a similar situation should know that eminent domain law recognizes cost to cure damages, but if the cost to cure becomes too expensive for the property, then the damages will simply be limited to the loss in the value to the property if the cost to cure is not undertaken at all.
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