Just compensation is owed for the impact on the entire large parcel, not merely the particularly described property from which a taking occurs.
When evaluating just compensation, Michigan law requires that all of an owner’s property be evaluated. Therefore, damages to the remainder suffered by properties in addition to the specific, legally-described property from which a taking actually occurs, is compensable.
MCL 213.51 contains definitions of the use throughout the Uniform Condemnation Procedures Act. MCL 213.51(g) defines “parcel” to be “an identifiable unit of land, whether physically contiguous or not, having substantially common beneficial ownership, all or part of which is being acquired, and treated as separate for valuation purposes.”
This concept can come into play in many different scenarios.
For example, if an agency seeks to acquire property used as a parking lot, then it must pay just compensation attributable to the reduction in value of the building that relies upon the parking lot so long as, beneficial ownership exists. Beneficial ownership expands the number of properties that qualify. In this example, an investor group may own the parking lot under one entity and the building under another. This would constitute, beneficial ownership. Indeed, this was exactly what occurred in the scenario that I described in Owners Can Challenge Whether Acquisition of All Rights Sought Are Necessary with the building that became Cheli’s Chili Bar. The Detroit/Wayne County Stadia Authority created plans demonstrating its intent to acquire the parking lot next to and owned by the Central United Methodist Church. The Stadia Authority wisely decided not to acquire this parking lot, which would have required it to pay significant just compensation to the Church, and providing a basis for the necessity challenge that saved the building that became Cheli’s.
Another example would involve multiple properties that were assembled for one larger development. If, for example, a taking reduced access rights to a frontage property that impacted the ability to develop properties to the rear that enjoy common beneficial ownership, the properties to the rear would be included in determining just compensation even though nothing was taken from them.
These are the type of issues that condemning authorities frequently fail to take into account when making good faith offers. This could be based upon an overly aggressive interpretation of condemnation law designed to suppress just compensation or a simple lack of knowledge about the true impact of their takings.
Any owner who owns more than the one property subject to a taking should consult with an experienced eminent domain attorney in order to fully evaluate the just compensation issues triggered by the condemnation. If you have any questions, feel free to contact me.