When the government takes your house through eminent domain—or any other type of real estate that you own—they are required to pay you fair market value for the land. You deserve just compensation. The idea is that, while you may technically lose the property, you should still be made whole in a financial sense.
In other words, perhaps the government wants to take a commercial property that you own for the construction of a new interstate highway. The property is worth $1 million. If they pay you that amount based on the market valuation, then you have received fair compensation. You may not be happy about losing the property, but from the government’s perspective, you haven’t lost anything financially. You’ve just converted a real estate asset into a financial asset.
Why this may not feel fair
However, many property owners will argue that they don’t feel like they received proper compensation. In some cases, it’s simply because they disagree with the valuation. For instance, perhaps you believed your property was worth $2 million, but the government determined it was only worth $1 million.
Another issue is that you may be thinking long-term, while the government is only considering your property’s current value. For example, maybe you purchased that commercial property because you anticipated local development. You believed that over the next decade, the value would increase tenfold. By being forced to sell today—even if you technically receive fair market value—you may feel like you’re losing a significant financial opportunity. You planned to sell the property years from now for far more than you’ll receive under eminent domain.
Disputes over the financial side of eminent domain are very common. These cases can be complex to navigate, so it’s important to understand your legal options.