‘Fair market value’ defined
The law gives the government the power to take private property for its own purposes, but it must compensate the owners fair market value. For many property owners, getting a fair compensation offer is a second-best option to getting to not having to give up their property.
Even this can be a struggle, as the government may try to assign a lower value to your property than it is actually worth. An attorney that understands the eminent domain process can help you get fair value.
In Florida, fair market value is the highest price a willing buyer under normal circumstances would pay based on its highest and best use. The date used to determine fair market value is either the date the title passes or the date the eminent domain dispute goes to trial. The valuation must ignore any changes that knowledge of the impending project for which the property is being condemned would make on the dollar figure.
As with many legal matters, if the parties take the dispute to litigation, expert witnesses must step in. In this case, the experts will be real estate appraisers, who may use one of three methods of assigning a value to your property:
- The comparable sales approach, which uses recent sales prices for similar properties
- The income approach, based on capitalization of the highest income the property is capable of producing
- The cost approach, which estimates the cost of building on the property plus the fair market value of the empty lot
For more information, please contact an attorney experienced in eminent domain matters.