Condemnation– Valuation of a Partial Taking

Whenever the State takes private property for a public purpose pursuant to the provisions of the Eminent Domain Act of 1971, the property owner is entitled to receive just compensation. When the entire property is taken, the measure of damages is calculated as the property’s fair market value at the time of the taking. However, when only a portion of the property is taken, the calculation of damages is not so straightforward. The measure of damages must include both the value of the portion of land taken and the value by which the remaining portion of land has been diminished as a result of the partial taking.
There are two methods of valuation that are used when there has been a partial taking. The first, commonly referred to as the “Before and After” Rule, is the difference in the property value before and after the taking. Alternatively, the “Per Se” Rule considers the value of the land taken plus the diminution of value to the remainder land. Either method may be employed in New Jersey and both methods require consideration of the value of the land remaining after taking. “Value” is understood to be market value, or the price which would be mutually agreeable to a willing buyer and a willing seller, when neither party is under any compulsion to act. In order to determine the fair market value an inquiry must be made into all relevant factors at the time of the taking.

The inquiry into the fair market value of the remainder land in a partial takings case is a broad inquiry to all material facts and circumstances, both past and prospective, that would influence a buyer or seller interested in consummating a sale of the property. To be compensated for damages to the remainder land, the damages must proximately result from the portion of property being taken. This may include factors that have a bearing on an available future use of the property and, in some instances, evidence of zoning changes affecting the future use of the property.

A complete loss of highway access is a compensable damage in a partial taking case. However, in many instances partial takings involve items of damage to the remainder property which are not compensable. They include the following: (1) the imposition of directional traffic regulations, i.e. prohibitions on crossing a highway or restrictions on turning movements; (2) a loss of maneuvering room as a result of a modification to an existing right of way; (3) the diversion of traffic away from the remainder property; (4) the imposition or creation of a more circuitous route to the property; and (5) any interference with access to the property which is merely speculative.

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