Indiana Condemnation Lawyers for Business, Commercial and Industrial Property Owners
Involuntary takings of real estate from business owners, commercial property owners and industrial property owners are quite different than residential property takings. However, they can be just as stressful. Commercial property and business owners – much like residential property owners – often go into the eminent domain and condemnation proceeding thinking that they can handle it themselves. They may believe it will save them money or that they can negotiate just as good a deal as an attorney can. But the difficulty lies in what they don’t know. Most business owners are not aware of their legal rights in an eminent domain action and they may not be aware of many of the tactics that buying agents use to obtain these properties. This puts the business owner at a distinct disadvantage in these transactions.
One way a business owner can protect their rights and work to maximize their compensation for the lost property is to hire an experienced eminent domain attorney. Cohen & Malad, LLP eminent domain attorneys have handled hundreds of eminent domain transactions for residential and business property owners and can provide you with a free case evaluation.
Business Owner Rights
Commercial property owners invest a lot of time and resources into:
- Developing land, and/or
- Growing their businesses
Business owners will face the same threat from eminent domain that residential owners do. Your risk may be even greater because your commercial property may be income-producing, but Indiana’s eminent domain laws do not provide compensation for:
- Lost sales
- Lost potential sales
Lost or reduced profits will not be factored into the compensation that owners deserve for the property. Value is based on the structure and land value at the time of eminent domain and not the proposed value or profits.
You may be entitled to “relocation assistance,” which may include the costs to relocate the business, reestablishment costs and any costs related to identifying a property that would accommodate the business.
If you’re pressured into accepting the first offer given to you, the just compensation that you deserve to receive may be lost. You have a right to protect your interests.
Eminent domain partial or full taking of commercial land
Business, commercial and industrial property owners face many of the same issues that residential landowners face in an eminent domain proceeding. The government may choose to take all or part of the property in an eminent domain action. Partial takings can often result in residue and other damages. While business owners many times believe that they should be compensated for lost or reduced profits that may result by virtue of a taking, in Indiana lost profits are not a compensable item.
Eminent domain actions may give rise to zoning and access issues
Zoning violations can be common when the government or other agency takes your property involuntarily. Violations could include setback distance, required number of parking spaces, or elimination of an access point. These are just an example of some issues that can result in damages to your commercial land and/or building(s). These types of violations, even if permitted by the governing body, may result in your commercial property being less desirable in the future, i.e. suffering damages.
A change in the access to a commercial or industrial property is an important issue for business owners. A business owner may be able to obtain compensation for the loss of access or the modification of access to the commercial property. Valuation of a commercial or industrial property that has restricted or modified access can be very complicated. Consult an attorney experienced in eminent domain for help in selecting real estate appraisers and other experts who can establish appropriate value for a property with modified access in order to ensure your rights are protected.
Impact of eminent domain on business signage
The loss or relocation of signage can also be an important issue to commercial property owners. If the government or taking agency takes any sort of sign or landmark that you own, you are entitled to compensation. Often times the government wants to pay a cost-to-cure to move the sign out of the area that it is taking. This approach is often insufficient in solving the problem as project estimates many times fail to take into consideration all costs involved with moving the signage or landmark. Signage relocation is also subject to zoning and setback requirements and can pose a whole other set of issues if not considered at the time of the offer.
Relocation for business properties taken by eminent domain
If your entire commercial property is taken by eminent domain, or even sometimes if just a portion is, you may be entitled to relocation assistance. The relocation assistance to which a business is entitled is much different than an individual landowner would receive. Relocation assistance can include moving costs, reestablishment costs, and costs for looking for a new location. Business relocation assistance can be confusing, time-consuming, and burdensome for the business owner to handle. Hiring a trusted legal advisor who is well-versed in condemnation proceedings can take the burden off you and allow you to focus your energy on running your business instead of dealing with the government.
Eminent domain consideration for commercial leaseholders
Commercial leaseholders may also be entitled to compensation if the building they are leasing is taken, damaged, or otherwise affected by an eminent domain action. The damages to a leasehold interest can be complex and difficult to understand for the lessor. It is important to review the condemnation clause, if any, in your lease agreement and to consult an attorney about your rights.
Leaseholders need to know the government or taking agency may not be required to make a direct offer, and may instead work directly with the commercial landowner. For this reason it is important for leaseholders to be involved as much as possible in the eminent domain and condemnation processes.
The 4 Stages of the Eminent Domain Process
Eminent domain is a process, and by the time that property owners are notified, the government has already gone through an extensive period of project design and has determined that your commercial property is necessary for completion.
Four stages of the process exist:
1. Project Design
Eminent domain must be for public use, and a major project must be proposed. An engineer has been tasked with designing the project and determining which properties – commercial or residential – must be taken.
2. Appraisal
A government appraiser will look through public records and may drive by the property to determine its value.
3. Offer
A buying agent for the government will propose a buyout to you, which you can deny. You can expect the agent to be adamant that you accept the offer, and you may have very little time to consider the compensation.
4. Dispute
You don’t agree with the compensation or eminent domain, and you bring a complaint to the court.
Commercial Eminent Domain Case in Indiana
In Hamilton County, the Indiana Department of Transportation (INDOT) withdrew its pursuit of an eminent domain claim over a popular farm market, which has been in business for more than 40 years.
As part of its US 31 limited access project, INDOT had planned to use the eminent domain process to acquire the Wilson Farm Market’s land, which sits on 256th Street and US 31. INDOT previously stated that the stretch of land where the business sits has seen more than “400 crashes” between 2014 and 2020.
INDOT filed a letter of interest but did not finalize eminent domain. Outcry from the public pushed INDOT to revisit the project’s design and withdraw its interest in the property.
The story is a prime example of how the public’s opinion and involvement in eminent domain cases can make a difference in outcomes.
Just Compensation
Commercial property owners have a right to just compensation in eminent domain proceedings.
Just compensation is the fair market value of the property that’s taken, whether that be the entire property or just a portion.
There are four main types of damages that may be recoverable in an eminent domain proceeding:
- The fair market of the land and interests in the land
- The fair market value of structures or improvements on the land
- Damages to the property that are not subject to the taking but will be negatively impacted (e.g., loss of access)
- Other catch-all damages
The latter two categories of damages apply primarily to cases where only a portion of the property is taken. For example, if your business runs along Interstate 69 and a highway project takes away your prior access to the roadway, you may have a residual or catch-all damages claim.
Eminent domain cases involving commercial properties are highly complex and require the help of an experienced lawyer.
Get Help from Experienced Eminent Domain Litigation Lawyers
Business, commercial, and industrial property owners facing eminent domain and condemnation proceedings can contact us to discuss their unique situation and receive a free case evaluation.
