Not Paid for Leased Space Under Eminent Domain? (What if You Could Get Paid?)
When you lease property that the NCDOT has condemned under eminent domain, they may often ignore your lease and/or may claim it is valueless and undeserving of just compensation. Sometimes that is true.
But we have seen the NCDOT use this argument as a one-size-fits-all solution to the question regarding leases.
Many Eminent Domain Scenarios are Potentially Negotiable
No argument is one-size-fits-all and many are potentially negotiable – even when the NCDOT says it is not. You just need to know what to ask for, the right experts to help you ask for it, and try to prove your case. Sometimes, a successful outcome is dependent on having the right technological and staffing resources at your disposal. And sometimes you have to get creative in your thinking and research, as we had to do for two business partners who leased space for one of their KFC restaurants.
“No Right to Compensation”
These business partners were involved in a highly complex eminent domain scenario, for which the NCDOT said they had no legal claim to compensation. Technically they were correct. Despite that technicality, the complexity of their situation, and the NCDOT’s denial of compensation, we were able to convince them to compensate these lessors1.
Since we’ve been in business, we have increased the average offer for our clients by 182%2
One of the business partners acknowledged just how complex the situation was. “We had a long-term lease, and then we had subleased a portion of the property to another tenant. So the tenant was paying us rent. We were paying the landlord rent. It got very complicated,” he explained.
What Does Your Lease Say?
If you have a lease or a lessor, and the property is condemned, it is important to check the lease to see if and how it divvies up just compensation between the landlord and tenant. Some leases give it all to the landlord. Some to the tenant. Some leases divide between the two. And some leases are silent, leaving the issue for the court and jury to decide.
In the KFC case the lease was silent. So the NCDOT ignored the KFC tenant and tried to pay only the landlord. But this lease had significant market value to the tenant. We were able to force our way to the table and present a cogent argument that cut through the entanglement of eminent domain laws surrounding leases in North Carolina.
We were able to successfully1:
- Intervene in the condemnation regarding property our clients did not own.
- Develop our own legal theory in the absence of North Carolina legal precedents or provisions in the lease that applied to our clients’ unique situation.
- Find a critical resource at the 11th hour, just before trial, that supported our position, after scouring North Carolina and U.S. legal databases for established precedents and finding none. (That resource? An appraisal textbook.)
- Negotiate separate deals with the NCDOT for all parties – our client, our client’s landlord, and our client’s sub-lessor.
The NCDOT ended up fairly and substantially compensating our KFC clients for its lost lease1.
Fight for What You Are Potentially Owed
Of course, each situation needs to be evaluated separately, but if your lease does not have a condemnation clause, then you may potentially be entitled to compensation for your costs to relocate and for the fair market value of your lease. Generally, the fair market value of your lease is the difference between your current lease cost and the cost to lease a new location.
Get Your Free Case Evaluation From NC Eminent Domain Lawyers
If you are faced with an eminent domain taking, contact us. Since we’ve been in business, we have increased the average offer for our clients by 182%2.
An experienced NC Eminent Domain Law Firm attorney (two of whom used to work as NCDOT assistant attorneys general) may be able to help you fight for compensation for your leased space. Contact us today or call 1-877-393-4990.