Nick Chop Commercial Appraisals

Commercial real estate valuation throughout North Florida.

Eminent Domain Appraisal

What is Eminent Domain?

Eminent domain is the government right to acquire property.  There are limits of this power and is addressed within The Fifth Amendment.  At the end of the last sentence, “…nor shall private property be taken for public use, without just compensation.” indicates it must be for a public use and the owner will be compensated.  The power may be delegated to private corporations, such as public utilities, railroad and other companies that promote a valid public purpose. Eminent domain appraisal is considered a specialty area of appraising.

What is the difference between eminent domain and condemnation? 

Eminent domain is the right to take the property and condemnation is the actual process that will occur to acquire that private property through the right of eminent domain.  Sometimes properties are purchased or leased (via an easement) without the condemnation process.  Other times it is a much longer process that will involve the condemnor (agency acquiring property) hiring several experts including a real estate appraiser and the property owner (or business owner) with legal representation hiring experts of their own.  Depending on the state, the fees of the experts are paid for by the condemning authority.  In Florida, reasonable expert fees are paid for by the condemning authority (Florida Statute – 73.091).

What will be acquired?

Depending on the scope of the appraisal, the real estate appraiser may value the whole property, a portion (partial acquisition) of the property or acquisitions that include temporary easements (may be needed during construction and area reverts back to owner after construction) or permanent easements (an area needed permanently for drainage structures, utilities, etc.).

What if the two sides cannot agree on compensation?

If negotiations are not met, the eminent domain appraiser may be deposed and testify on behalf of the client.  The ‘client’ may be the condemnor or the property owner legal representative.  The appraiser will be required to provide his/her opinion to their valuation.  Typically, a judge will preside over the trial, review the evidence and determine who is qualified to testify.  The jury, with the evidence provided, will determine what “just compensation” is.