Valuation
Just compensation, and what it is understood to include
The constitutional phrase is short and the interpretation is long. Just compensation means the owner should be put in as good a position financially as if the property had not been taken. Courts have read that to mean fair market value, with important exclusions.
The standard
Indemnity, not reward
The governing idea is indemnity. Compensation is meant to restore the owner to the financial position occupied before the taking, no better and no worse. That principle explains both what is paid and what is refused.
It explains why fair market value is the measure: market value is what the owner could have obtained by selling, so paying it leaves the owner neither enriched nor impoverished. It also explains why value peculiar to the owner is excluded. A property worth more to this owner than to any buyer carries a value the market would not have paid, and paying it would be a reward rather than an indemnity.
Owners often experience this as unfair, and the reaction is reasonable. The standard compensates the property, not the disruption. Many real losses, moving a business, rebuilding a routine, losing a view, fall outside it entirely or are handled by separate statutory programmes.
The boundary
What is paid and what is not
| Item | Treatment |
|---|---|
| Market value of the land and buildings taken | Compensable |
| Loss in value of the remainder caused by the taking | Compensable as severance damages |
| Fixtures attached to the real property | Compensable |
| Cost of curing a condition created by the taking | Compensable where the cure is genuine |
| Relocation and moving expenses | Not part of the valuation; handled under relocation assistance statutes |
| Business goodwill | Generally excluded, though several states compensate it by statute |
| Lost profits during construction | Generally excluded, with state exceptions |
| Sentimental or personal value | Excluded |
| Attorney and appraisal fees | Excluded in most states; recoverable in some, often conditioned on the outcome |
In a partial taking
Compensation is a subtraction, not an addition
Questions about compensation
Is just compensation the same as what I think my property is worth
Not necessarily. It is what the market would have paid, under a definition that excludes value specific to you. An owner\u2019s own valuation is often higher, and the gap is not evidence of bad faith by anyone.
Do I get interest
In most jurisdictions yes, from the date of taking or the date of deposit until payment, at a rate fixed by statute or by the court. Where an agency deposits an estimated amount early, interest usually runs only on the shortfall.
Can I recover what it costs me to fight the offer
In most states, no, each side bears its own costs. A minority of states shift fees to the agency where the final award exceeds the offer by a set margin. This varies enough that it must be checked locally.
My business will lose customers during construction. Is that compensable
Usually not as part of the valuation. A handful of states compensate business damages by statute, and loss of access claims sometimes capture part of the harm. It is jurisdiction specific.
Who decides the figure if we disagree
A court or, in some states, a commission of appointed viewers. Both sides present appraisal evidence and the decision maker fixes compensation.
Get a valuation question answered
If an offer has arrived and the number does not match what you believe the property is worth, the appraisal behind it is the place to look. Start with the pages below.