Home Eminent Domain My Business Is On A Property Being Taken By A Government Agency. What Are My Rights?

My Business Is On A Property Being Taken By A Government Agency. What Are My Rights?

The owner of an operating business on property being acquired by the government, has its own rights. Some of those rights will be governed by the contract or the lease between the landlord and the tenant. It is important for the tenant to consider the lease and what it provides, in terms of any impacts on the compensation in the case of eminent domain. A business displaced as a result of a public project may have a claim for loss of business goodwill. It may also have a claim for the value of trade fixtures and equipment that it owns on the property.

Independent of the eminent domain law, there is a separate body of law governing relocation benefits afforded to a business, requiring the government to provide relocation benefits to assist the business in getting relocated to a new site. Relocation occurs in an administrative process outside of the eminent domain case in court.

My Business Is On A Property Being Taken By A Government Agency And I Did Not Receive An Offer. What Do I Do?

The government may take the position it only has an obligation to provide an offer to the real property owner. There may not be an obligation to give an offer, for instance, for loss of business goodwill. In that event, the business owner will need to fight to establish its entitlement to loss of business goodwill. Since the business owner has the burden to establish it is entitled to payment for loss of business goodwill, a California eminent domain attorney can help you protect your rights.

My Business Is Being Displaced Because Of A Government Acquisition Of Property. Am I Entitled To Relocation Benefits?

Relocation is an administrative process that occurs outside of court. There are relocation laws under California law and federal law, depending on whether or not the project that is causing the displacement is a federally funded project or simply subject to state laws. In either case, there are laws that provide for relocation benefits and they are specific and very technically enforced. It is important for you to have your own advice in terms of how to proceed and deal with the relocation benefits. Ordinarily, the government will send a relocation consultant out to speak with you and explain your rights. You may have rights that go beyond t the rights explained by the government’s agent. A California eminent domain attorney can help evaluate whether your relocation rights have been properly explained to you, and if not, discuss your remedies with you.

My Business Is On A Property Being Taken By A Government Agency. Am I Entitled To Compensation?

A business on a property being acquired by the government may be entitled to make a claim for loss of business goodwill. Unlike a claim of just compensation for the taking of real estate, which is a constitutional right under state and federal law, the loss of business goodwill is a statutory right that was created by the legislature, and entitlement is not automatic. A business has to prove entitlement to loss of business goodwill. There is a specific section in California law that governs loss of business goodwill and there are specific steps and conditions that need to be met. This generally involves an evaluation of the profitability of a business in the “before” condition compared to the profitability of the business in the “after” condition.

Generally, a profitable business that has good records, including good tax returns, that experiences diminished profitability as a result of a government acquisition is a candidate to establish a loss of business goodwill. The business is required to establish entitlement to make a loss of goodwill claim. The conditions are that the business had goodwill in the “before” condition, the loss is caused by the taking of the property, the loss could not have been avoided by a relocation or by taking steps and adopting procedures that a reasonably prudent person would take and adopt in preserving goodwill, and that there is no duplication of benefits in the form of relocation benefits or other compensation. Goodwill entitlement is determined by the court. Once established, the amount of goodwill loss is tried to a jury.

For more information on your rights in an eminent domain case, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (213) 236-9720 today.

Additional Information

• California Eminent Domain: A Guide for Small Business Owners