Owner’s Guide to Understanding Supervariances

The Uniform Condemnation Procedures Act provides condemning agencies with the ability to obtain variances to cure zoning non-conformities created by their takings. 

There are two essential types of takings, total and partial takings. A total taking occurs when an agency acquires an entire property. A partial taking occurs when an agency acquires either a fee simple interest in only a portion of a property (such as the acquisition of a frontage strip for a road project) or an easement. 

Michigan recognizes an entitlement to damages to the remainder. M. Civ. JI 90.12 is a jury instruction created by the Michigan Supreme Court to explain the concept of a partial taking to jurors determining just compensation in those cases. It describes the process for determining just compensation and identifies some examples of issues that can arise creating just compensation claims. 

This case involves what is known as a “partial taking”; that is to say, the property being acquired by the condemning authority is part of a larger parcel under the control of the owner.

When only part of a larger parcel is taken, as is the case here, the owner is entitled to recover not only for the property taken but also for any loss in the value to his or her remaining property.

The measure of compensation is the difference between (1) the market value of the entire parcel before the taking and (2) the market value of what is left of the parcel after the taking.

In valuing the property that is left after the taking, you should take into account various factors, which may include: (1) its reduced size, (2) its altered shape, (3) reduced access, (4) any change in utility or desirability of what is left after the taking, (5) the effect of the applicable zoning ordinances on the remaining property, and (6) the use which the condemning authority intends to make of the property it is acquiring and the effect of that use upon the owner’s remaining property.

Further, in valuing what is left after the taking, you must assume that the condemning authority will use its newly acquired property rights to the full extent allowed by the law.

The creation of zoning non-conformities is both a legally recognized basis for just compensation claims and one of the types of claims that are most commonly missed by agencies and property owners. 

MCL 213.54(2) allows an agency (but only the agency) to obtain what I call a “supervariance” to cure zoning non-conformities created by a taking. The statute says in pertinent part: 

If the acquisition of a portion of a parcel of property needed by an agency would leave the remainder of the parcel in nonconformity with a zoning ordinance, the agency, before or after the acquisition, may apply for a zoning variance for the remainder of the parcel. In determining whether to grant the zoning variance, the governmental entity having jurisdiction to grant the variance shall consider the potential benefits of the public use for which the property would be acquired, in addition to those criteria applicable under the relevant zoning statute, ordinance, or regulation… If a variance is granted under this subsection, the property shall be considered by the governmental entity to be in conformity with the zoning ordinance for all future uses with respect to the nonconformity for which that variance was granted… This section does not deprive a governmental entity of its discretion to grant or deny a variance.

I refer to these as supervariances because a normal variance is specific to a particular use or improvement. For example, if a variance is granted to allow a residential home to be constructed thirty feet from the edge of a road and the normal front yard setback is fifty feet, that variance would not allow conversion of home into an office, would lapse if a significant portion of the home was destroyed by a fire, and would not allow an addition to the home. However, a supervariance granted under MCL 213.54 would remain valid in each of those three scenarios. 

Acquisition of this type of variance can facilitate the resolution of eminent domain cases. For example, this post describes a supervariance that allowed resolution of a case involving a fast food restaurant. Many property owners, particularly owners of commercial buildings, would rather see a future problem solved through the acquisition of a supervariance than retain a claim for damages. 

The key is recognizing the need for such a variance. Condemning authorities rarely seek these type of variances before initiating suit. Obtaining such a variance requires effort on their part, effort that they may not wish to engage in if a property owner is willing to accept an offer out of ignorance of the impacts of the taking. Additionally, if an agency applies for but is denied a variance, the agency has essentially proven the owner’s entitlement to just compensation for that issue and made the property owner aware of it. It is for this reason that it is critical to retain an attorney who not only understands eminent domain but can recognize zoning impacts on a property.

If you have any questions about the potential impacts of a zoning ordinance on a property following an acquisition by an agency, please do not hesitate to contact me.