Eminent domain takings of commercial property in Georgia can be a challenging and contentious process for business owners. When GDOT exercises its power to seize your commercial property for public use, it is obligated to provide you with just compensation based on your property’s fair market value. But how do you know if GDOT’s valuation is fair?
GDOT may employ valuation methods that don’t fully address the true value of your property, leading to an offer that is significantly lower than what you may deserve. Understanding these valuation practices and knowing how to navigate the eminent domain process is crucial for commercial property owners to pursue fair compensation for their seized land.
In my experience working with commercial property owners facing eminent domain takings, I’ve found that GDOT’s initial offer is almost always considerably lower than what the property might actually be worth. Many property owners do not realize that they can try to prove that their property is worth more than GDOT’s offer. And an experienced Georgia eminent domain attorney can help you push back against GDOT for the full value of your commercial property.
Contact us online or at 1-888-391-1339 today for a free case evaluation if the government is taking your commercial property.
Can a commercial property owner in Georgia receive compensation for lost income in eminent domain?
Yes, Georgia business owners can seek recovery for relocation expenses and loss of income resulting from eminent domain land takings. The loss must not be “remote” or “speculative,” meaning you must be able to prove the loss was the result of the eminent domain land taking. You may seek compensation for lost income even if your business continues to operate despite the taking.
For example, detailed financial records showing your company’s income before and after the taking can help present a picture of how much you may have lost and how much compensation you should receive.
True public interest vs. economic development in eminent domain takings of commercial property
While eminent domain is intended to be used for public use, such as building highways or schools, many argue that the true motivation behind these takings is economic gain.
When the state takes private property, it can use the land for economic development. This economic development can result in higher property taxes, which directly benefits the state.
The argument that takings can be justified because they bring in more tax revenue for the state is often used to justify the taking of commercial property from businesses. However, the use of eminent domain for economic development can often undermine the fundamental principle of private property rights and create an environment where the government can take property from businesses for its own benefit.
How GDOT determines just compensation for a commercial property
The issue of determining fair compensation can be complicated, and two common methods of valuation used are the comparable sales and income-based approaches.
Comparable sales vs. income-based approaches in determining property value
In many cases, the government uses comparable sales to value property for the purpose of determining just compensation. Comparable sales are properties that are similar to your commercial property in terms of location, size, and other features that affect value. The government may hire an appraiser to determine the value of your property based on sales of similar properties.
The problem with using comparable sales to value property in commercial condemnation proceedings is that you, the owner, may not be a willing seller. If you don’t want to sell your property, the sale of comparable properties may not reflect your property’s true market value. In addition, comparable sales may be influenced by factors that do not apply to your property specifically.
A Georgia eminent domain lawyer can push back against offers based on valuations by government appraisers that may leave out crucial factors which can increase the value of your commercial property.
Potential factors include:
- Highest and best use – The value of the commercial property in terms of its highest or best use, such as if there was a larger building on the land that would increase its value
- Business location and goodwill – Businesses may either succeed or fail depending on their physical location, and relocation can have an enormous impact on a company’s value
- Zoning changes and code compliance – Many businesses must operate within commercial zones and maintain compliance with local ordinances, and eminent domain can lead to extra zoning and compliance costs for business owners
Studies agree: Georgia commercial property owners may be at a disadvantage in eminent domain
Multiple studies suggest that GDOT may not be offering fair compensation for the taking of private commercial property:
- In 2016, the Institute for Justice published a report titled “Taken for a Ride: Georgia’s Urban Renewal and Eminent Domain Law.” The report examined the use of eminent domain for urban renewal projects in Georgia and argued that the state’s laws allowed for abuse of the eminent domain power.
- In 2012, the Georgia Public Policy Foundation published a report titled “The Eminent Domain Revolt in Georgia: Reforming a Broken System.” The report analyzed the use of eminent domain in Georgia and argued that the state’s laws were too heavily weighted in favor of condemnors, with property owners often receiving inadequate compensation for their property.
In particular, the Institute for Justice’s report found that Georgia’s eminent domain laws were some of the most expansive in the country and that condemnors in the state often used eminent domain for economic development purposes rather than true public uses. The report noted that this had led to widespread abuse of eminent domain powers, particularly in urban areas where property values were high and there was pressure to spur economic growth.
The report also found that property owners in Georgia often received inadequate compensation for their property, with condemnors such as GDOT offering lowball offers that did not reflect the true market value of the property.
It is critical for commercial property owners to understand their rights to try to ensure they receive just compensation for the taking of their property.
How your eminent domain lawyer helps you handle GDOT
An experienced Georgia eminent domain lawyer can help you determine how much your property is really worth by:
- Identifying potential future issues for your business created by the taking
- Analyzing the appraisal and pointing out any errors leading to too low of an offer
- Negotiating on your behalf with GDOT for maximum compensation
- Advancing the costs of hiring independent surveyors, civil engineers, appraisers, environmentalists, and other land experts as needed2
- Taking your case to court if needed
Get a free case evaluation for your commercial property – No obligation
Like any buyer, the government wants to pay as little as possible for your property. But we know how to negotiate for maximum compensation. Several of our attorneys once worked for a state Department of Transportation. Now, we use that inside knowledge to try to ensure you don’t leave any money on the negotiating table.
Since our firm began, we’ve been able to increase our clients’ average initial offer by nearly 3x more!1
We advance all costs of your case. And, if we don’t get you a better offer, you pay nothing at all. Guaranteed.2
Call us today at 1-888-391-1339 or contact us online for a free evaluation of what your property may really be worth.
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