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What is Fair Compensation in Eminent Domain Cases?


Under the U.S. Constitution, the government is prohibited from seizing private property for public use without first providing the landowner with fair compensation. Determining what exactly constitutes ‘fair compensation’ in eminent domain cases is anything but straightforward, though. Below, our Daniel Island condemnation lawyer outlines what fair market value is, and how it is determined.

What is Eminent Domain?

 Simply put, eminent domain refers to when a government entity takes private property for public use in exchange for fair compensation. Fair compensation essentially means that the land owner should be left in relatively the same position as if the seizure of property did not occur. Evaluating the fair market value for private property seized for public use is not easy, unfortunately. It is also something that is often disputed in eminent domain cases.

The Valuation of Property 

The valuation in eminent domain cases depends on the fair market value of the land at the time it is seized by the government. The issue of fair market value is often hotly contested between the government and the landowner. It is very common for both sides to hire expert witnesses who can provide testimony regarding the issue of fair market value. Determining fair market value is highly dependent on the facts of the case. Some factors considered are as follows:

  • The size of the property
  • How accessible the property is
  • Geographic and zoning location of the property
  • Level of development
  • Potential or current use
  • Unique characteristics of the property

It is important to note that while it may seem unfair to land owners, fair market value does not take into consideration the cost, stress, or time involved with moving from one property to another.

How to Determine Fair Market Value 

There are three common methods used when determining fair market value. These are as follows:

  • Market approach: The market approach uses the sale of similar properties to determine fair market value. Similar properties should be in the same location and have similar characteristics, such as the same number of bedrooms and bathrooms as well as the same features such as a garage or pool. The market approach works best with residential properties.
  • Income approach: This approach is best used for properties that produce income and it determines a property’s value based on projected future income. Using the income approach requires the determination of the net operating income, vacancy factors, and other complex factors.
  • Cost approach: The cost approach is used when the other two methods do not apply and when a property has such unique characteristics or structures that the only way to replace it is to reproduce it. In these cases, the cost of recreating the property is used to determine its fair market value.

Our Condemnation Lawyer in Daniel Island Can Determine Fair Market Value

 At Fuller Law Firm, our Daniel Island condemnation lawyer has the necessary experience to determine the fair market value of your property so you obtain the just compensation you deserve. Call us now at 843-277-0013 or contact us online to schedule a consultation and to learn more about how we can help.



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