Questionable Compensation for Temporary Easements
Shenehon Company has recently noticed a pattern where condemning authorities such as the Minnesota Department of Transportation, cities, and counties, establish temporary construction easements and want to compensate property owners in a way that is questionable and unreasonable.
Private land taken for a public project is often acquired in one of two formats: permanent or temporary. The most common temporary easement is a temporary construction easement. Since it is difficult to accurately determine construction timelines, condemning authorities place temporary easements for a longer time period than they actually need to complete construction. For example, a city might need a construction easement for nine months. Since it is difficult to accurately estimate construction timelines, the city might impose the right to use the nine months at any point within 48 months. Lately we are seeing cities like the one in our example offer to compensate property owners only for the nine months of use rather than the 48 months of right to the land. The city claims that since it will use the land for only nine months it must only compensate the property owner for that time.
Some may question this logic. One might argue that since that the city is imposing the right to use the land for 48 months it should compensate for the full 48-month period. Customary leasing practice in the marketplace is for a tenant to pay for the right to occupy a space for a period of time. If the tenant does not actually use the space during the time period stated in the lease, the tenant cannot reduce the rent payment due the landlord.
Using this customary approach to land use and leasing, we assert that it is improper for the city to impose rights for land use during a specified time period and then reduce its just compensation payments based on the fact that it did not actually use the land.
We appreciate the fact that condemning authorities want to save taxpayer dollars. But the approach we just described is a questionable method to trim costs. We maintain that just compensation is based on rights to land use and not actual use.