When Your Business Property is Condemned
Having your home property condemned is very common in eminent domain, but what if the property condemned is where you have built your business? What does just compensation mean when you are going to have to relocate your business? What additional costs can you recover?
The process for the condemnation of business property works the same way as it would if it were your home that was being condemned. For more on that, see our Condemnation article. The differences come up in the area of compensation.
The property, from the government perspective, is valued using the Fair Market Value scale, just as it would be if it were your home. Unfortunately, this means that you will not be compensated for any losses your business might suffer as a result of moving. For example, if you have a popular diner that is close to a large number of offices, you have built a customer base and have a steady income. If your property is condemned, and you have to move that diner, you will essentially be starting over. You will not be compensated for that loss.
You will, however, be entitled to the cost of moving all your business property, including dismantling any equipment and having it reassembled at the new site. If you need to store business property or equipment, you are entitled to up to one year’s worth of storage fees. You may also be able to recover the cost of any new license and permits you have to obtain to open the new business.
If you are the property owner, you will also be entitled to recover losses based on income from the property itself. For example, rental income, farm income lost from use of the property, or loss of income for leasing the property as a parking lot.