If you are a Florida business owner being threatened with an eminent domain condemnation, you may be very aware of how critical the risk to your business can be.  For many businesses, your shopfront is your business.  Walk-up traffic, drive-by traffic, association with a community or complementary businesses can all be mainstays of your client base. An eminent domain condemnation of your property threatens all of these. You can probably think of several successful businesses that moved and never survived, even if their new location was supposedly “better.” As all of these things are going through your mind, you may wonder whether the full compensation promised you in the Florida constitution includes these potential losses.

Business Damages not Constitutional

Unfortunately, business damages are not considered part of the constitutionally guaranteed “just” or “full” compensation. Lost profits, lost goodwill, loss of walk-up traffic, and other types of business losses are not considered “property” in the sense that guarantees compensation under the terms of the constitution.  Instead, they are considered intangibles that can sometimes be compensated “by legislative grace.”  In other words, sometimes business damages are granted by specific laws, but they are not generally guaranteed.

Specific Guarantees for Business Damages

In Florida, there is a very specific definition of when a business is eligible for damages.  In order for your business to qualify for business damages, all the following must be true:

The eminent domain condemnation must be a “partial taking,” which takes only part of the property The remainder (not taken part of the property) is also part of the business The property is being taken for a qualifying “right of way” including roads and water-related improvements The portion of the property to be taken damages or destroys a business established in its current location for at least five years The property owner is also the business owner Losing the taken property is the cause of business damageIf all of these are true, then your business may qualify for business damages.  Whether you qualify for business damages will be determined at the eminent domain hearing, but the exact amount of damages will not be determined until a later hearing.

Other Ways to Be Compensated for Business Losses

The above determination for business damages is very strict, and only a small number of businesses affected by eminent domain actually qualify.  However, there are other methods of receiving compensation for damage to your business.  If your business is properly appraised, fair market value will include the likely or potential loss to your business based on losing your current property.  This is done by considering the value of your land at its “highest and best use” and considering the cost of producing a comparable building at a new site.  In addition, an appraiser will factor in the cost of any equipment that must be replaced or moved.

Disclaimer- Martyn L. Daniel represents both private parties and public agencies and provides these blog entries as a general overview on eminent domain related news.