There are a lot of things about the eminent domain process that are unfair. The most upsetting is that the government can just come in and take your land whether you want to sell or not.
To help try to make up for that, there’s a law that says the government has to pay you for what it is taking based on your land’s “highest and best use.” This is an attempt to protect people who’ve been sitting on a piece of valuable land, but haven’t wanted to sell it for one reason or another.
What does highest and best use mean?
Essentially the highest and best use of your property is the use that would reasonably be expected to result in the highest value. Simply put, it wouldn’t be reasonable to expect a large farm, fifty miles from the nearest town, to be purchased to turn into a large residential development. That particular use isn’t reasonable, so it doesn’t matter that it may increase the value of the property.
On the other hand, it may be reasonable to expect that a similarly-sized farm, two miles from the edge of town, could be built up as a residential development. Since the use is reasonable, the next step would be to look at whether this use would increase the value of the property. Click here for a story about how we helped prove highest and best use to increase a property owner’s offer1 from the government.
Generally, as you move from agricultural, to residential, to commercial, and to industrial uses, the value of the property increases. So it wouldn’t be fair to force a property owner to sell land to the state at the price of farmland if that owner could have sold it for more money to someone else to build a house, store, mall, or factory. Just because the property is currently being used for a farm doesn’t mean that there isn’t a higher and better use.
Government appraisals sometimes overlook “highest and best use”
The NCDOT’s appraiser may make the mistake of valuing a particular piece of land as if it were exactly the same as all the other similar pieces of land around it. After all, the basis of an appraisal is using the recent sale prices of nearby properties to determine what the appraised property would be worth to an average buyer.
However, a defining element of property law is that each piece of land is unique. Just because a piece of property is being used for one purpose, doesn’t mean that is the only use that could be made of the property. A piece of farmland on the edge of a town or city could be the location of the next large development.
Maybe the property owner hadn’t sold the land yet because the price wasn’t high enough, maybe the owner was waiting until retirement, maybe the owner just plain didn’t want to sell the land. A piece of prime real estate could be undeveloped or underdeveloped for any of these reasons, or more. Just because a property isn’t currently being used to its highest potential doesn’t mean it’s worth less to the owner.
You need to know more before accepting an offer
We’ve seen our share of cases in which the owner didn’t realize the property had a higher and better use. Take a family who has passed down a home and property for generations, for example. To that family, the best use may just be continued use as a home to pass down to the next generation. An appraiser may even make the mistake of ignoring development sprouting up around the property since the property has remained unchanged for so many years. When the family sees the condemnor’s appraisal that states the highest and best use is for continued residential use of a single family home, they may not even think twice about the offer. Worse, they may simply accept that offer without having all the facts laid out before them.
A condemning agency will usually pay more per square foot of land taken from a high-traffic convenience store than from a family farm. However, if the highest and best use of the farm was actually for development as a convenience store, then the compensation should be equivalent. You need facts that are relevant to your unique situation.
We can potentially help get you those facts
We believe it’s prudent to have an eminent domain attorney who is experienced in these matters review your case and walk with you through the process.
When it comes to highest and best use, we’ve been known to hire (initially at our own expense) the necessary resources to try to uncover what we believe to be the true highest and best use of our clients’ property. If that means more appraisers, engineers, surveyors, brokers, and experts in planning, zoning, architecture, and engineering construction, so be it.
NC eminent domain attorneys can examine your case FREE
Our lawyers have 20+ years of experience helping to prove highest and best use for land and business owners. It can be a complex endeavor. One that, if not handled properly, could end up costing you big. There’s every reason to put our experience to use when it comes to your own land use situation.
When it comes to compensation for your property or business, don’t let the government tell you what they think your land is worth. Get an experienced eminent domain attorney on your side to try to prove to them what the potential for your property’s highest and best use really is.