06/19/2017 by Attorney Norman W. Shearin
The applicable measure of damages in a condemnation proceeding for the court and jury is the DIFFERENCE between the fair market value of the ENTIRE TRACT immediately prior to the taking and the fair market value of the REMAINDER immediately after the taking. The only situation in which the fair market value of the property taken can exceed the difference between the fair market value of the property before and after the taking under N.C. Gen. Stat. § 40A-64 is where there is a special benefit offset.
All factors pertinent to a determination of what a buyer – willing to buy but not under compulsion to do so – would pay and what a seller – willing to sell but not under compulsion to do so – would take for the ENTIRE PROPERTY must be considered in arriving at the compensation to which a landowner is entitled. The compensation for the taking must be full and complete. Such compensation includes everything which affects the value of the ENTIRE PROPERTY before the taking and the REMAINDER after the taking. The adverse impacts of the Project must be considered in assessing damages.
A condemnor must pay for the rights taken, not what it actually does on the property. Carolina Central Gas Co. v. Hyder, 241 N.C. 639, 642, 86 S.E.2d 458, 460 (1955) (“[I]n assessing damages for easement rights, it is not what the condemner or grantee actually does, but what it acquires the right to do that determines the quantum of damages.”) (citations omitted).
To properly evaluate an easement acquisition, the appraiser must know precisely how the easement will be used, what rights are to be acquired, and how responsibilities as to the easement will be divided by the parties. The full impact of an easement acquisition cannot be estimated until the appraiser determines: (1) the loss of present utility, (2) loss of future utility, (3) accessory rights to be acquired, and (4) the obligations of the parties. Accessory rights (secondary easements) may include the right to maintain the easement area including the right to enter onto the property for inspection, repair and/or replacement.
Damages to land due to the imposition of an easement can range from 0% to 100% of the easement area’s fee value. J.D. Eaton, MAI, SRA, Real Estate Valuation in Litigation (1995).
Under N.C. Gen. Stat. §40A-66(a), “[i]f there is a taking of less than the entire tract, the value of the remainder on the valuation date shall reflect increases or decreases in value caused by the proposed project including any work to be performed under an agreement between the parties.”