Severance Damages refer to compensation given to a property owner when a portion of their property is taken through condemnation, adversely impacting the value or usability of the remaining property. This concept is often applied in scenarios where public authorities, such as state highway departments, exercise eminent domain to acquire private land for public use.
Definition and Calculation
Severance Damages are awarded in addition to the market value of the land taken. They aim to compensate for the diminution in value or the inconvenience caused by the partial taking. For example:
Suppose the state highway department expropriates a strip of land 100 feet wide from the middle of a farm, offering $1,000 per acre for the land taken. Additionally, they provide $15,000 in severance damages for the inconvenience faced by the owner in accessing the farm from one side of the highway to the other.
Legal Basis
The legal foundation for Severance Damages is rooted in the concept of eminent domain, where the government has the authority to take private property for public use, provided that “just compensation” is paid. In the United States, this right is enshrined in the Fifth Amendment of the Constitution.
Severance Damages Calculation
Components
- Land Taken: The direct compensation for the portion of the property seized.
- Remaining Property: The diminished value or utility of the rest of the property owing to the partition or other impacts caused by the acquisition.
- Inconvenience and Accessibility: Compensating the owner for increased difficulty or reduced functionality of the property, as exemplified by needing to access different sections of the property separated by a newly constructed highway.
Example Calculation
- Land Taken: $1,000 per acre (e.g., 2 acres taken = $2,000)
- Severance Damages: $15,000 granted for inconvenience, assessed based on the specific impact on the property and owner.
Total compensation = $2,000 (land) + $15,000 (severance damages) = $17,000
Historical Context
The concept of Severance Damages has evolved alongside the development of eminent domain laws. Initially, compensation focused solely on the property taken, but legal precedents have expanded this to include the adverse impacts on the remaining property.
Applicability
Real Estate
Severance Damages play a crucial role in real estate, especially in scenarios involving partial takings. They ensure fair compensation and address the broader economic impacts on the property owner.
Legal Proceedings
Lawyers specializing in property law, eminent domain, and compensation often deal with Severance Damages to safeguard client interests.
Comparisons and Related Terms
- Eminent Domain: The right of a government to take private property for public use with compensation.
- Condemnation: The process through which the government expropriates private property.
- Market Value: The price at which property would sell under normal conditions.
FAQs
Q: What is the difference between Severance Damages and Market Value Compensation?
Q: Are Severance Damages taxable?
Q: How are Severance Damages determined?
References
- United States Constitution, Fifth Amendment. The foundation of eminent domain and just compensation principles.
- Real Estate Law: Eminent Domain and Condemnation. Comprehensive resources on legal precedents and compensation practices.
- Appraisal of Real Estate, 14th Edition by The Appraisal Institute, which provides guidelines on property valuation and damages assessment.
Summary
Severance Damages are critical in ensuring just and fair compensation when a portion of private property is condemned for public use. By accounting for the diminished value and usability of the remaining property, these damages protect property owners from financial losses beyond the mere market value of the expropriated land.
