Prejudgment Interest And Eminent Domain

What Is Prejudgment Interest?

According to Florida law, part of full compensation for your property taken through eminent domain is “prejudgment interest.” This interest is applied to the difference between what was offered to you by the government as its “good faith” offer of compensation and the value of your property (or partial property, including severance damages) as determined by trial for the time period between when your property was taken and the final trial date (after all appeals, if any). (For more explanation, see The Condemnation Process.) But what is actually included in this prejudgment interest?

Prejudgment Interest And Court Precedent

The Florida Supreme Court decided the question of prejudgment interest (which it considered to be “of great public importance”) in Boulis v. Florida Department of Transportation. According to the Court, the question hinges on the language that “full compensation is determined ‘by reference to the state of affairs that would have existed absent any condemnation proceeding whatsoever'” and by the statutory requirement that interest is applicable to all expenses incurred as a result of the eminent domain proceedings. But what exactly does this mean? Essentially, this means that interest applies not only to the full difference between the condemning authority’s “good faith” offer and the trial decision, but also to any “reasonable” expenses incurred by the property owner during the proceedings.

But this language can be deceiving. It is important to note two caveats. First, the court has the right to determine what constitutes “reasonable” expenses. In the precedent case, Boulis was billed by an expert he employed for $35,308, but the court determined that only $16,200 of that was considered “reasonable.” So Boulis was responsible for nearly $20,000 out of pocket, a reminder that it is good to know what constitutes “reasonable” fees in the eyes of the court. Second, the court said that interest would only apply from the date that the expense was incurred, not from the date the condemning authority took title, unlike the rest of your full compensation.

How Does This Affect You?

As shown in the Boulis case, even those who seemingly know the law can end up with exorbitant expenses due to eminent domain. At the Florida Property Rights Law Firm, P.A., we have experience with experts in numerous disciplines and can help you avoid getting stuck with out of pocket expenses for unreasonable experts’ fees. Navigating the intricate pathways of eminent domain law, such as prejudgment interest, is our area of expertise. We also remind you that normally our fees are paid for by the condemning authority and do not reduce your payment in any way.

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To learn more about eminent domain and how we can help you, please schedule an eminent domain consultation today.

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