When calculating just compensation in partial taking eminent domain cases, a valuation concept known as the before and after rule is commonly used. In determining the value of the before parcel, there is a term referred to as the larger parcel, which signifies that the parcel taken is not a complete parcel but part of a ‘larger parcel’; the owner, therefore is entitled to severance damages as well as the value of the parcel taken.
In determining the larger parcel in an eminent domain partial taking, there is a concept known as the three unities. The three unities relate to the unity of ownership, unity of use, and the unity of contiguity. The easiest way to explain the three unities concept is through the use of an example. Let’s say you are a property owner with a restaurant that is located on one side of the street with a parking lot across the street. The local municipality is condemning your parking lot in order to expand the post office; however, they are not acquiring your restaurant. What frequently happens in these types of takings is the condemning authority will value the parking lot as a vacant piece of commercial land, and completely ignore the restaurant across the street. This type of valuation is incorrect because not only are you losing the value of the land taken, but your restaurant (the remainder parcel) is also losing value because you no longer have a parking lot for your patrons to utilize. In this situation where the parting lot is taken, but not the restaurant, you will need to combine the parking lot and the restaurant together as one larger parcel in order to fully recognize the severance damages that will be inflicted in this particular case. Our lead attorney, Dan Biersdorf, explains more in the video below.
The three unities need to be considered in this case, with the first unity being that of ownership. The unity of ownership requires that both the parking lot and the restaurant building be in the same name. If one is in the name of the individual and the other is in the corporation owned by the individual, then one of the elements of the three unities will be violated and you will not be able to combine them together.
The unity of use, which is the second of the three unities, is satisfied in this particular case because both properties are being used for a restaurant operation. However, if the building and the parking lot had different uses, then you would not be able to combine them together to establish additional severance damages.
The third unity is the contiguity of the property. Even though the parking lot is across the street from the restaurant and they are separated by a street, the courts have still held that they would be contiguous for the purposes of satisfying the three unities.
If you are threatened with condemnation, and you see this situation as a potential problem, make sure that you have ownership in the same name in order to preserve your right for making your severance damages claim to the unaffected portion of the larger parcel.
Questions about Three Unities or if you’re interested in a free consultation, contact us today! If you want to call us, our main number is 866-339-7242. We look forward to hearing from you.