An Overview of Capped Actual Cost Items for Business Owners Affected by Eminent Domain

In my last blog post entitled, “Would You Choose Lump Sum or Actual Cost Relocation Reimbursement? I discussed two reimbursement options available to business owners who must relocated due to eminent domain; lump sum and actual cost.

If a business owner chooses to be reimbursed using actual cost as the basis for the claims, some expenses are capped.

Capped Expenses: Reestablishment (maximum $25,000):

Note that the $25,000 cap mentioned above is the minimum set by the Federal Relocation Guidelines. Some states have higher amounts, some are at $50k or higher, and a few are unlimited. Link to a state-by-state relocation listing here.

1. Repairs or improvement to the replacement property as required by law or code

2. Modification to the replacement property to enable the business to operate

3. Construction and installation of new signage to advertise the business

4. Redecoration or replacement of soiled or worn surfaces such as carpeting, paint, paneling

5. Advertisement of the replacement location

6. Increased cost of operations for two years

7. Other items considered essential to the reestablishment of the business

Since an eminent domain and business relocation consultant’s services are an eligible cost when opting for the actual cost for a planned relocation, the capped items listed above are where a consultant’s expertise is important.

For example, #2 – capped within the $25,000 (depending on your state or location) is ‘modification to the replacement property to enable the business to operate’.  A consultant with construction experience can suggest modifications which are contained within that reimbursement amount.

On the other hand, a business owner may simply look at a replacement property (if he even has the time to search for properties) and believe that hefty modifications leading to out-of-pocket expenses is the only solution to enable the business to operate.

Can you see why an eminent domain and business relocation consultant’s services are absolutely necessary to the seamless transition in an eminent domain move?

In my next blog post, I will compare actual cost estimates for relocation for small businesses versus acceptance of the lump sum.

Do you have any questions about the capped amount in your state?