Just and adequate compensation can include damages to an existing business impacted by a condemnation. Obtaining such compensation, however, can be tricky. For example, Georgia law places the burden of proving business loss on the business owner. By comparison, the condemning authority has the burden of proof regarding the value of any land taken or damaged by a condemnation.
Business loss in condemnation
When a business is operated by the property owner, business loss is only available in cases where the condemnation acquires all of the land, known as a ?total taking.? When a condemnation acquires only a portion of the land, known as a ?partial taking,? business loss is available only when the business owner is separate from the property owner. Naturally, there are ways around this general rule, such as by having one entity (such as an LLC) own the property while another entity owns the land and leases it to the business owner. When considering how to structure such an arrangement, it is important to consult a lawyer who does condemnation to avoid certain pitfalls.
There are other considerations when it comes to business loss, especially when structuring a lease between unrelated parties whereby one party owns the land and leases it to another entity who will operate the business. The considerations are important to protect both parties in the event of condemnation.
To recover for business loss, the property must also be unique, which means that it is incapable of being relocated to another location in the same vicinity that it was in before and continuing to operate. Since the burden of proof for business losses is on the business owner, a condemning authority will not typically offer business-loss damages before condemnation. But, the condemning authority may offer relocation expenses. In that case, it is important to understand the impact of accepting relocation damages on claiming that a property is unique for purposes of later establishing a business-loss claim.
While the forgoing information is intended to be general in nature, if you are a business owner and have been contacted by a condemning authority regarding a potential condemnation, we would be happy to speak to you regarding your rights. Contact our office to schedule a free consultation.
Smith, Welch, Webb & White, LLC.
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