Just Compensation
Candlefocus EditorThe concept of just compensation rests on the foundation that when a person is forced to give up their private land, they must be given fair payment. The government cannot act to take away their property without due compensation. This process is put in place to prevent the government from profiting from a taking as well as ensuring that individuals are entitled to fair and just compensation for the use of their land.
When determining the amount of just compensation, acts such as the Fair Market Value Rule, the Definite Loss Rule, and the Good Will or Going Concern Value Rule are used. The Fair Market Value Rule is the most commonly used rule of valuation, and it dictates that an owner be paid the current appraised value of the property, which is the same price that the owner could receive in a voluntary sale. The Definite Loss Rule, on the other hand, takes into consideration losses that are definite, meaning that losses that are not typically considered when determining the value of the land are included. The Good Will or Going Concern Value Rule includes the market value of the property in addition to the value of any business operations that were conducted on that property.
In certain cases, the opinion of an independent appraiser may be needed to accurately determine the fair market value of the property. These appraisals can be conducted for both residential and commercial properties, and will take into account factors such as location, size, age, condition, and potential of the surrounding area. The appraiser will assess the land to determine the highest and best use of the land, the projected income it could generate, the market rates of return on similar properties, and the type of market the property is in.
Just compensation is an important right that all property owners are entitled to. It allows individuals to be compensated in the case of their land being taken for public use, ensuring that they are not denied compensation. It is important that individuals understand the concept of just compensation and the laws that are in place to protect them if their land is ever taken.