CONDEMNATION
The Fifth Amendment to the Constitution of the United States is a wonderful thing. Among other rights, it provides “nor shall private property be taken for public use, without just compensation”. Most of condemnation proceedings within the Commonwealth of Kentucky involve right-of-way takings for new roads, the widening of existing roads, or urban renewal. The appraisal valuation is based upon a “before and after” format, based upon the valuation of the property immediately before the taking and immediately after the taking.
In the case of right-of-way takings, the condemning authority makes an initial offer to the property owner based upon value conclusions of the appraiser(s) hired by the Commonwealth. Should the property owner not agree with the initial offer, the owner has the right to a Commissioners’ Award. Under Kentucky law, the Court appoints three commissioners to establish the value of the property being condemned who are “impartial housekeepers of the county who are owners of land”. If neither party takes exception to the Commissioners’ Award, this becomes the value of the property once an interlocutory judgment is entered. The date of entering the interlocutory judgment is the proper “taking date” for fixing a value. Should the property owner not agree with the Commissioners’ Award, the owner is entitled to a jury trial.
In some takings, damage exists; however, are considered noncompensable as they are “sacrifices which society has the right to inflict for the public good.” In Kentucky some noncompensable items include: noise, circuitry of travel, business losses, interruption of business, inconvenience, nonwillingness to sell, and goodwill. While the Commonwealth v. Sherrod case held that loss of business is noncompensable, the R.J. Corman Railroad Company/Memphis Line v. Commonwealth may open the door for additional compensation in some cases when employing the “Income Capitalization” method of valuation in the before and/or after values. Loss of business has always been compensable when the taking alters the highest and best use of the property.
In addition to the compensation of land/buildings taken, a significant amount of damage may be incurred including: proximity damage (external obsolescence), economic obsolescence, grade changes, loss of access, severance damage, landlocked remainders, change in highest and best use, reduction in economic size, and other cost-to-cure (curable obsolescence) items of damage. These items are compensable and will increase the amount of just compensation due the owner.
A number of road widenings involve proximity damage or constructing the new right-of-way limits or road closer to a residence or building. An example was a case that was a part of the Paris Pike project in Fayette County. Before the taking, the distance from this residence to the right-of-way was 125 feet. After the taking, this distance was reduced to 34 feet for a percentage of yard area loss of 73%, which is significant. The new right-of-way limits after the taking may be seen in the form of the stone fence/wall, seen in the photograph at top right. Bailey Appraisal Service represented the client and this case was settled out of court.
Having appraised more than 500 "before and after" parcels for condemnation proceedings and appearing in various Courts as an expert witness more than 200 times, James F. Bailey can represent your condemnation, and litigation appraisal needs.
