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Back to Basics: What is Just Compensation?

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In this blog series, we aim to get back to basics – that is, to explain some foundational concepts about the kind of law we practice here at Hansen, Howell & Wilkie, PLLC.  Today’s key term: just compensation.

Sound familiar? This phrase comes directly from the Bill of Rights – specifically, the Fifth Amendment:

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

What does that last part mean? If a government takes property for public use, it must pay the owner for what it has taken.

In North Carolina, our laws generally define “just compensation” as the difference between the market value of the real property immediately before the taking and the market value of the real property immediately after the taking.  This definition accounts for the value of the land acquired as well as any damage – or reduction – to the value of the remaining property.  For example, if a fast food restaurant located on a corner parcel has three entrances before a highway project, but only one entrance after the project is complete, then the remaining property can likely be considered “damaged.”

However, it is important to note that under North Carolina law, a property owner cannot (usually) be compensated for certain things in a condemnation case:

  • Installation of medians
  • Business losses
  • Circuity of travel
  • Inconvenience during construction

Are you being impacted by a government taking? Make sure you do your  research and hire an attorney who has experience in the field of eminent domain law.

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