Eminent Domain FAQ

View Eminent Domain/Condemnation FAQ
Eminent Domain FAQs about Eminent Domain Condemnation Law.

I

INTRODUCTION

One of the questions which sometimes arises in evaluating the damages or potential damages when a portion of property is taken by government pursuant to its power of condemnation or eminent domain is whether there can be a recovery even where the highest and best use of the property remains the same both before and after the taking.

The answer is yes. Where there has been a diminution in the intensity of the highest and best use or a loss of the full potential of the highest and best use in the remainder property, then severance or consequential damages (i.e., more than direct damages alone) are recoverable for the diminishment in value.

II

THE GENERAL STANDARD OF DAMAGES IS DETERMINED BY THE BEFORE AND AFTER RULE

A) Before and After Rule

In Chester Industrial Park Associates, LLP v. State, 65 A.D.3d 513, 884 N.Y.S.2d 243 (2d Dept. 2009), the Appellate Division, Second Department, following well established precedents, defined the standard of damages in a partial taking as follows:

“It is well settled that the measure of damages for a partial taking of real property is the difference between the value of the whole property before the taking and the value of the remainder after the taking ... Consequential damages are measured by the difference between the before and after values, less the value of the land and improvements appropriated. The measure of damages must reflect the fair market value of the property in its highest and best use on the date of the taking... (Citation omitted)."

This rule, however, is not an absolute one. It does not apply in all circumstances. Particularly where it would result in the property owner receiving less than the amount of direct damages by reason of the enhancement in the remainder parcel due to the condemnation. Chisea v. State, 36 N.Y.2d 21, 364 N.Y.S.2d 848 (1974). See also, Done Holding Co. v. State, 144 A.D.2d 528, 534 N.Y.S.2d 406 (2d Dept. 1988), lv to appeal denied 73 N.Y.2d 710, 541 N.Y.S.2d 764 (1989). The rule is also inapplicable where there is no unified use of the overall parcel (i.e., there must be contiguity, as well as unity of use and title). The issue of unified valuation is addressed, in part, in another article on this website. See, “Valuation of the Entire Property/The Unity of Title Requirement/Does Different Record Title Prevent Unified Valuation?

III

DAMAGES FOR DIMINUTION IN HIGHEST AND BEST USE

Damages are recoverable even where the highest and best use may remain the same both before and after the taking. Specifically, damages are recoverable for impairment, diminishment, limitation or reduction in the intensity of the highest and best use. In In re County of Rockland [Kohl Industrial Park], 147 A.D.2d 478, 537 N.Y.S.2d 309 (2d Dept. 1989), the Court stated:

“... consequential damages may be awarded even though there has not been a change in the highest and best use of the remaining property, if the claimant can establish a diminution in the potential development of that use. Accordingly, we find the award of consequential damages in this case appropriate.”

Citing Chemung Canal Trust Co. v. State, 90 A.D.2d 889, 456 N.Y.S.2d 518 (drive-in bank facility); Matter of Saratoga County Sewer Dist. #1 v. Gordon, 101 A.D.2d 966, 477 N.Y.S.2d 713 (less suitable for commercial purposes); Banos v. State, 54 A.D.2d 1077, 388 N.Y.S.2d 755 (from unlimited to limited industrial development); Laken Realty Corp. v. State, 29 A.D.2d 1027, 289 N.Y.S.2d 570 (industrial development); Tauzel v. State, 82 A.D.2d 933, 440 N.Y.S.2d 757 (farmland).

While damages are recoverable for a loss in the intensity of highest and best use as well as, of course, changes in the highest and best use in the remainder parcel, the claimant must still satisfy its burden of proof that there has been a severance or consequential damage to the remainder. While no specific valuation method is mandatory, there must be sufficient proof presented to establish the loss in value. See, on this website, the article entitled “Can You Recover Loss in the Value of your Remaining Property (the “Severance” or “Consequential” Damage)?

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