The status of Condemnation Law in Virginia

November 30th, 2016 by JBWK

Submitted by Conway H. Sheild, III

What can a condemnee expect as compensation?   The power of eminent domain has been exercised in the Commonwealth of Virginia since its formative years, and the Virginia Constitution currently reads that the General Assembly shall not pass any law … where private property shall be taken or damaged for public use, without just compensation.

 

What has put a spotlight on eminent domain in general, in Virginia and other states, was a 2005 case in Connecticut styled Kelo v. City of New London which was a challenge to the public use provision of that state’s condemning authority, and it narrowed the definition of public use substantially since in Connecticut it had been used, in this context, for economic development purposes which the United States Supreme Court found unsuitable.  Virginia responded by passing legislation which narrowed the definition of “public use” and is considering a Constitutional Amendment in that regard currently.

 

However, an often overlooked issue with condemnation proceedings in this State is that the owner may be undercompensated for its property when equipment and fixtures on the property are not appraised because they are overlooked at the time of the condemnation.  How could this happen?  Simply because the attorneys and appraisers who carry out the condemning authority’s work often confine the scope of the property being affected by the condemnation as only that property shown on the taking documents or plansheets that they are given.  Accordingly, this may result in the condemnor’s falling short of the requirement that they provide the owner for all property taken and damaged with “just compensation”.

 

The owner must make sure that the “intent test” is used to determine what are chattels or fixtures, and it is unjust to require the landowners to accept no value or only salvage value for fixtures on condemned property.  The fact that a restaurant is being condemned, when it has movable fixtures (ovens, refrigerators, etc.) which may be worthless outside of the context of the space they are in, and once removed from the property depreciate in value substantially to the point that the landowner may be undercompensated if this equipment, useful on this property, is forced to be removed, should be considered.  Accordingly, the law is that condemnor is required to  take the entire property unit when they exercise their right of eminent domain, including not only the structures and the improvements, but also the furnishings, fixtures and equipment thereon if failure to include them would be unjust.

 

Landowners have consistently misunderstood their rights in this regard, and may in fact, without the intervention of skilled legal help, accept far less than the actual entitlement under the law, which would ignore the economic realities of the fixtures.  In this context, just compensation under the law may require more than consideration of the bricks and mortar.

facebooktwitterfacebooktwitter
  • Posted in Real Estate
  • Comments Off on The status of Condemnation Law in Virginia

Comments are closed.