Can the state take my commercial property?

Tennessee is a staunch property rights state, and so it likely comes as a shock to our readers that the government can take our property for the public good through a process called eminent domain. The state need only provide us just compensation.

Eminent domain

The term, “eminent domain” refers to the legal process in which the government takes private property for public use. In exchange for that taking, the government gives the property holder “just compensation.”

This is specifically allowed under the U.S. Constitution by the Fifth Amendment’s Takings Clause.

Public use

The first argument that many landowners have when fighting eminent domain is that the government’s proposed use is no more of a public use than their business.

After all, how can a public park be any more of a public use than your restaurant, mechanic’s shop, etc.?

Unfortunately, the courts have expanded the term “public use” so much that just about anything qualifies. Any litigation on the validity of proposed public use will likely fall in the government’s favor.

Given this state of affairs, eminent domain litigation generally revolves around what qualifies as just compensation.

Just compensation

Just compensation puts you in the same position as if the government had not taken your property. This means that you are entitled to the value of your property.

However, determining this value is hotly debated, and rarely will you and the government agree.

Fair market value

The usual metric for determining value is the fair market value at the time of the taking. This requires expert witnesses from both you and the government.

Both experts look to the size of the property, though, surprisingly, larger parcels can actually have less value per square foot.

Other factors include: The ease of accessing the parcel, zoning; unique characteristics of the land; any development of the land; the current and potential uses of the land; and known minerals (oil, gas, water, timber, etc.).

What is not factored

Frustratingly, what is not usually factored in is your emotional and social loss.

For example, even if this land was in your family for generations, and your entire life is based here, you will not receive additional money.

If you cannot afford to move nearby, you will not receive additional compensation to ensure you can. Your stress is not separately compensable, and neither are your moving costs.

This is why those who get an eminent domain letter usually contact a Tennessee attorney.

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