Just Compensation

Just Compensation, the amount government must pay the owner to take property by exercise of the power of eminent domain. The Takings Clause of the Fifth Amendment limits the use of eminent domain. Most important of these limitations is that “just compensation” must be given to the person from whom property is taken. Most state constitutions contain similar language. It seems to have been the customary, if not universal, practice for American colonial governments to award compensation when private property was taken for public purpose. The same practice can be traced back in England into the early fifteenth century.

Just compensation means the fair market value of what the owner has been compelled to transfer to the government. This amount is determined by a court. Fair market value is the sum of money that a willing buyer would pay a willing seller in a bargained‐for sale upon the open market. That amount is a matter of opinion, upon which testimony is received from the owner and from expert appraisers. A recent sale price is strong evidence of value. In some cases, the owner is entitled to additional compensation for severance damages. This occurs when only part of a parcel of land is taken, but the taking of that part makes the remaining part less valuable. Also, in some cases when the project will confer special benefits on the owner, the value of those offsetting benefits may be credited against the award.

See also Public Use Doctrine.

William B. Stoebuck