Eminent Domain FAQ

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Eminent Domain FAQs about Eminent Domain Condemnation Law.

In New York, it is common for the government where it exercises the power of condemnation and eminent domain to also take a “temporary easement” to accomplish construction.

However, valuation of a temporary easement has proved to be a challenging task for the courts and the affected property owners because when the government takes the temporary easement, it is often years before construction begins.

Under New York condemnation and eminent domain law, the legal valuation standard is well established. Both direct and severance damages are recoverable for a temporary easement. McCurdy v. State, 10 N.Y.3d 234, 855 N.Y.S.2d 421 (2008):

“... the rental value of the land encompassed within the temporary easement for so long as the easement is in effect plus, as consequential damages, the rental value of the parcel’s unencumbered interior acreage for any period of time when highway access was not possible by virtue of the easement’s use. A condemnee is entitled to consequential damages comprising the rental value of the parcel’s unencumbered interior acreage for the easement’s duration only if the condemnor does not meet its burden of proving the interval of actual obstruction, or the condemnee establishes that the mere existence of the temporary easement did, in fact, impede sale or development of the property for its highest and best use.”

There is no question that a claimant is entitled to the rental value of the property actually taken for the period of time that the government maintains the map in place. This is the direct damage and since it is always impossible to ascertain the duration of the map in a condemnation valuation trial, the appraisers will typically arrive at a per month or per annum value for the rental value of the area actually taken. In New York, apparently as a matter of tradition, it is assumed at the outset that the map will be in place for two or three years.

The amount of this direct damage is usually not a problem. It’s in relation to the severance damage where the dispute and legal valuation problem arises.

The courts have generally applied two approaches in considering the compensability or the standard of compensability in respect to the severance damage. On one hand, the Court of Appeals has required proof of the actual physical interference on the remainder property to establish the severance damage. On the other hand, the Court of Appeals has recognized that the presence of the temporary easement map itself even without actual construction causes a market impairment to the remainder property. Compare, McCurdy v. State, id. with Village of Highland Falls v. State, 44 N.Y.2d 505, 406 N.Y.S.2d 446 (1978).

The Court in McCurdy recognized the quandary faced by the Court and the parties where the temporary easement map is still in place, but the construction has not yet begun or is still in process.

The Court in McCurdy in reconciling the apparently opposing standards (as well as an intervening Appellate Division case, Kadlec v. State, 264 A.D.2d 420, 694 N.Y.S.2d 123 (2d Dept. 1999)) stated:

“[t]he general rule is that property taken in eminent domain is to be valued prospectively from the time of appropriation."
“When a temporary easement, contemplating only incidental and contingent use, is appropriated, rather than a permanent interest, however, it may be somewhat more acceptable to permit the use of hindsight in valuing the interest taken. If the condemnation award is made after the easement has expired, it makes practical sense to compute the property owner’s actual damages rather than indulging in speculation on the measure of damages claimant could have contemplated at the time of taking” (44 N.Y.2d at 508, 406 N.Y.S.2d 446, 377 N.E.2d 977 [citations omitted and emphasis added]).
"In adopting a retrospective measure of damages, we observed that “[i]t has been held by this court that compensation need not be paid for the State's taking of a temporary easement when there is no actual interference with the property owner's use of his property” (44 N.Y.2d at 507, citing Great Atl. & Pac. Tea Co. v State of New York, 22 N.Y.2d 75, 87 [1968]). We found “insufficient reason for abandoning [the above] precedent” where a three-year-long temporary easement connected to highway improvements gave the State “the legal right to exercise some sort of dominion throughout the period of the easement,” but, in fact, the claimant's “operation of the water treatment facility was rarely significantly interrupted” (44 NY2d at 507, 508). Similarly, in this case (and unlike the situation in Kadlec), the State proved the interval of actual obstruction; i.e., it is undisputed that highway access to claimant's parcel was obstructed for only 7 to 10 days (and the State concedes 10 days for purposes of the appeal) during the 666 days the easement was in effect (from April 7, 1999 to February 1, 2001)...”

The Court thus having apparently come down on the side of requiring a showing of actual interference obviously was uncomfortable with making this an absolute standard. The McCurdy Court went on to “leave open the door” by then observing:

“We added a caveat in Village of Highland Falls, however, commenting that [n]ot to be ignored ... although not always measurable, is the damage to a property owner caused by uncertainty regarding the condemnor's intentions. A temporary easement that leaves the property owner under constant threat that his use of the property may be curtailed or stopped is likely to affect business or other financial decisions even if use is never interrupted in fact. The threat imposed by the condemnor's legal right to occupy may be almost as damaging as the actual occupation of the property. Damages caused by such uncertainty, difficult as they may be to measure, should generally be compensable” (44 NY2d at 509).”

The temporary easement valuation plainly creates a quandary. If the construction has only just begun or not begun at all, even if the Court were to require a purely physical interference standard, it would be impossible to make any “retrospective” analysis which, in effect, would deprive the property of just compensation. At the same time, even in the absence of actual construction, any prospective purchaser or lessee would discount the rental value because of the temporary easement map – especially where that temporary easement map cuts across and potentially blocks access to the entire site.

This issue will be the subject of further articles and, in particular, what proof should be presented by a property owner to establish entitlement to direct and severance damages.

For questions or to discuss items presented in this topic, please contact Saul Fenchel.