May 29, 2018

Don’t Leave Money on the Table: A Brief Look at Relocation Benefits in a Condemnation Case

Relocation benefits are an often overlooked source of additional compensation that may be available in a condemnation case. A uniform federal act and corresponding state statutes provide that when a landowner is displaced (even temporarily) for projects involving federal funds, the condemning agency must pay for applicable relocation benefits. Thus, the first step in evaluating whether relocation benefits are available in your case is to determine the source of funding for the government project. If federal funds are or will be involved, you are entitled to relocation benefits.

While both the type and amount of relocation benefits will vary depending on the state and the property interests that are impacted by the displacement, the uniform act and most corresponding state statutes provide for three general categories of relocation benefits: (1) moving costs; (2) reestablishment costs; and (3) other eligible expenses. The brief discussion below will focus on those relocation benefits available under the uniform federal act to a displaced business owner.

Moving Costs

A business owner is entitled to its actual, reasonable and necessary moving expenses, generally with no cap on the amount of eligible expenses. These expenses include, by way of example: costs of disconnecting, packing, unpacking and moving personal property; the cost to purchase replacement personal property, if less than the cost to move the property; professional services for planning the move and searching for replacement property; and any other moving-related expenses that are not deemed ineligible.

Reestablishment Costs

Once the replacement site is selected and the personal property is all disconnected, packed and ready to be re-installed, the business owner is also entitled to reestablishment costs necessary to make the site operational. Unlike moving costs, reestablishment costs are typically capped, and the amount will vary by jurisdiction. These costs include repairs or improvements to the replacement site as required by law or code; modifications to the replacement property necessary to enable the business to operate in the new location; installation of signage; increased operational costs for up to two years; and any other items that are considered essential to reestablish the business.

Other Eligible Expenses

In addition to the two categories above, a displaced business owner may recover those costs that are actual, reasonable and necessary for the connection of utilities at the replacement site; for professional services performed prior to the purchase of a replacement site to determine its suitability for the business; and any one-time impact fees or assessments for utility usage.

Relocation benefits are an important source of compensation to make a displaced landowner impacted by a government taking whole. But without experienced eminent domain counsel to advocate on your behalf to ensure you get everything you are entitled to, it is likely you will leave money on the table.

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