C. Eminent Domain/condemnation
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C. Eminent Domain/Condemnation 92
1. Origins of Condemnation
The Constitution of the united States guarantees that private property shall not "be taken for public use, without just compensation."93 The South Carolina Constitution similarly demands that "private property shall not be taken for private use without the consent of the owner, nor for public use without just compensation being first made thereof."94 until South Carolina adopted its Constitution of 1868, the State exercised its right of eminent domain to take private property without compensation.95 The concept of "just compensation" is a critical component of both constitutions' provisions. South Carolina has a judicial history rich in explanation and refinement of the concept of "just compensation."
2. South Carolina's Statutory Scheme
The South Carolina General Assembly enacted statutory law to create a practical system for exercising the state's power of condemnation and determining just compensation.96 The "Eminent Domain Procedure Act" ("the Act") created a uniform process for the State to acquire property through the exercise of its condemnation power.97 An understanding of condemnation in South Carolina must begin with this Act.
A primary goal of the Act is to ensure that just compensation is paid to the person whose property is taken. under the Act, the government, prior to initiating a condemnation action, must have the property appraised and make the appraisal available to the landowner.98 The government must also attempt to reach a settlement as to just compensation prior to instituting an action.99
If the parties cannot reach an agreement on the value of the land, the government may take possession of the land after depositing the appraisal amount with the clerk of court.100The issue of just compensation must then be taken up by the court and may be tried by a jury upon the request of either party.101 The condemnee may apply to receive up to 50% of the funds deposited with the clerk of court prior to conclusion of the case.102
3. Just Compensation
a. General Meaning
"The purpose of payment of just compensation is to put the condemnee in as good a position pecuniarily as he would have been had his property not been taken."103 "The compensation to which the owner is entitled is the full and perfect equivalent of the property taken."104
When explaining just compensation, South Carolina courts have focused on fair market value.105 Value must be determined by considering all possible uses of the land that affect its value in the market.106 In determining just compensation, only the value of the property taken and any damage or benefit to remaining land may be considered.107
b. Time of Valuation and Future Uses
The date of the filing of a condemnation notice is the pertinent date for purposes of establishing valuation.108 However, any future purpose that the property could reasonably be used for is a legitimate element of establishing market value.109
The jury may consider all of the uses to which the land may be applied, and the jury is not limited to considering "merely the condition it is in at the time and the use to which it was then applied by the owner."110 The landowner is entitled to the value of the property if put to its most advantageous or profitable use and is not limited to its value under its present use.111
The jury may not, however, consider possible uses that are so remote and speculative that they do not affect market value.112 To merit consideration of possible uses of the land, the landowner must show: (1) the property is adaptable to the possible use; and (2) it is reasonably probable that it could be put to the other use within a reasonable time.113
The jury may not take into consideration any increase in the value of the condemned property caused by the condemnation project's placement of public works upon it.114
c. Remaining and Adjoining Property
Any diminution or increase in the value of adjoining land retained by the condemnee must be considered in determining just compensation.
In addition to the actual value of the land taken, the landowner is entitled to compensation for any damages resulting to the remaining land in that parcel.115 These damages include any decrease in the actual value proximately resulting from the condemnation.116 The mere fact that the government has taken some property entitles the landowner to full compensation for damages to any remaining property.117 The damages to remaining property may include a loss of privacy or view.118
Any decrease in the value of remaining property, however, must be offset by any increase in its value caused by the proposed public project.119 Thus, in many condemnation cases, the measure of damages will be the value of the land taken plus any resulting injury to remaining property, minus any benefits to the remaining land attributable to the project.120
An owner is not entitled to compensation for damages to a remaining tract if it is a separate and independent parcel.121 The question of whether remaining land is separate or part of the condemned land hinges on the issues of use, contiguity, and ownership.122 If doubt exists, the issue should be decided by the jury.123
d. Fixtures
A property owner can recover damages for the taking of fixed improvements on real property.124 As defined in the Act, a fixed improvement includes any building, machinery, or structure "that cannot be removed from the real property on which it is situated without substantial damage to the real property or other substantial economic loss."125
The mere fact that costs are incurred in moving an item from the land does not make that item a fixed improvement.126 Personal property located on real property is not a proper element of damages in a condemnation proceeding.127 Furthermore, the cost of removing personal property from the real estate is not an element of damages.128
Criteria for determining the fixed nature of property include: (1) the mode of attachment, (2) the character of the structure or article, (3) the intent of the parties making the annexation, and (4) the relationship of the parties.129 Mobile homes may be considered fixtures depending on whether permanent foundations or other improvements have been made.130 Damages to fixed improvements made by tenants may also be recoverable.131 A considerable body of law relating to fixtures has developed in areas other than condemnation and is applicable to condemnation proceedings.132
e. Business Value
The value of a business being conducted on the property is not an element of damages recoverable in a condemnation case.133 Lost profits from the business are therefore not recoverable either.134
The existence of a given business, however, should be taken into consideration in determining the market value of the real property when the use of the real property for that business purpose enhances its value.135 Earnings of a particular business are not admissible in considering market value, but the earnings directly attributable to the property are admissible.136
f. Ingress and Egress
Restrictions on a property owner's rights of ingress and egress to and from the property are rights that must be compensated if taken.137 The mere closing of a road does not vest a landowner with a compensable injury; the critical determination is the loss of ability to access one's land.138 An element of special damage that may be considered is the necessity of taking a circuitous route to access remaining lands.139
In Allison,140 the State constructed an interstate over portions of a state highway.141 The State condemned property from the landowner for the right-of-way.142 The interstate allowed only restricted access to the landowner, unlike the former state highway that allowed access along the landowner's entire western portion.143 The court allowed recovery for the landowner's loss of access to the state highway that was turned into the interstate.144
The law surrounding takings of egress and ingress in South Carolina is still developing and has not yet established clear guidelines.145
South Carolina courts have established that if an owner's property is not subject to condemnation and does not abut the roadway proposed to be closed, the property owner must prove special damages to be entitled to any recovery.146
g. Submerged Land
The government may take submerged land or extend rights over that submerged land without providing any compensation if the taking is for the limited purpose of aiding navigation.147 Conversely, the submersion of land that would otherwise remain dry is compensable.148
h. Leasehold Interest
A tenant may have a compensable interest in condemned property.149 Normally, the measure of damages is the difference between the value of the occupancy of the leasehold for the remainder of the term plus the value of any right to renew minus the agreed upon rent.150 Where only a partial taking occurs, the measure of damages is the difference between the fair market value of the lease before and after the taking.151
4. The Process of Valuation
a. Lay Testimony
A landowner may give an opinion regarding the value of condemned land and the damages suffered because of the condemnation.152 A landowner may testify about the land's most profitable uses and may opine regarding any use reasonably anticipated in the future.153
A person who does not own the property may testify regarding value if thoroughly familiar with the characteristics, nature, and use of the property.154 In Rural Land Co.,155 the court allowed testimony from an employee of the corporate owner. The employee had various responsibilities associated with the property and was familiar with its operations.156
b. Expert Witnesses
Expert witness testimony is allowed to assist in establishing the market value of condemned property and the reduction in value of any remaining parcels.157 Experts may testify by establishing the difference in value of an entire tract before and after the...
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