Just Compensation Must Include Payment for the Larger Parcel

The impacts of a taking must evaluate both the actual property being taken and the impacts upon the larger parcel, which could include other legally described properties.

MCL 213.51 contains definitions that are applicable in a condemnation case. This includes the definition of parcel. “‘Parcel’ means 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.” MCL 213.51(g).

When evaluating the larger parcel, two key points must be recognized. First, there must be only common, beneficial ownership and not exact unity of ownership. Second, the parcels need not be contiguous. 

The taking of one property can impact a different property and if the definition of parcel is met, just compensation must be paid for both. For example, if a parking lot owned by one LLC that serves a building owned by another LLC with common beneficial ownership such as common members is taken, just compensation must be paid for the reduction in value to the building. A real life example from early in my career involves a parcel that is familiar to many people.

The acquisition footprint for Comerica Park originally included the parking lot north of Cheli’s Chili Bar. That parking lot is owned by the Central United Methodist Church. The parking lot was excluded from the acquisition footprint, presumably due to the requirement that just compensation be paid for the reduction of value of the church itself. 

Examples can exist in the agricultural context. For example, the taking of one legally defined property that impacts the drain tiles or irrigation systems that service another property with common beneficial ownership would require just compensation be paid for both legally defined properties because they are part of the same parcel.

The definition of parcel is another example of the type of just compensation claim that can only be recognized by experts experienced in the area. 

If you are facing a condemnation, please feel free to contact me.