What does “highest & best use” mean?

It is important for property owners to understand the meaning of “highest and best use.” Per the Dictionary of Real Estate Appraisal, the highest and best use of a property is “The reasonably probable and legal use of vacant land or an improved property, that is physically possible, appropriately supported, financially feasible, and that results in the highest value.”

This effectively breaks down into four factors.

1. legally permissible

2. physically possible

3. financially feasible

4. maximally productive

For example, just because you may currently be using your property for residential purposes, that does not necessarily mean that the property’s “highest and best use” is for residential use.

What are partial takings?

A partial property taking may cause the remainder of your land or dwelling to suffer residue or other damages. Partial takings can include something as simple as a strip off the front of your property for a road widening project; or they can be something more complicated, such as or a utility line easement running directly through your property or a roundabout being placed at the corner of your land causing serious damages and affecting your safety and accessibility to your residence, business or other type of property.

What is a total taking?

With a total taking the problem centers around the value of the entire property on the date of taking. There are no damages because no real estate remains; the government is taking your entire property. Residential landowners are entitled to relocation assistance and sometimes to a Housing Differential Payment. The Housing Differential Payment refers to the amount the government or taking agency agrees to pay you and the actual cost of a replacement dwelling. Relocation assistance and the Housing Differential Payment are confusing terms, and many lawyers who don’t regularly handle eminent domain matters fail to understand how these mechanisms work and are not as well equipped to help landowners.

What are residue damages?

Residue damages could include a reduced value of your remaining land, or a reduced value of your home or other structures on your property. The category of other damages can include a wide variety of damages that may be suffered by virtue of the construction or the project. Appraisers hired by the government or taking agency will commonly underestimate or completely overlook residue and other damages to your property.

Can I receive additional compensation for an eminent domain issue that I discover later?

Under eminent domain, you are entitled to just compensation. However, it is important to know that you only have one bite at the apple. Once you settle with the government or taking agency, the transaction is complete. You will not be able to receive any additional compensation if some type of damage, issue or problem is later discovered. This is why it’s important for you to seek legal guidance or representation if you are faced with an eminent domain action to take your property.