Section 11.19 Interest

• Jurisdiction: Arizona

Interest on the compensation and damages awarded is provided for by A.R.S. § 12-1123(B), which provides as follows:

If there is an order for immediate possession before the final judgment, the compensation and damages awarded shall draw interest from the date the order is entered by the court. If the defendant is allowed to withdraw money deposited by the plaintiff pursuant to § 12-1116, subsection M, the defendant is entitled to interest on the money that the defendant is allowed to withdraw from the date the order for immediate possession is signed by the court until the date of the withdrawal.

A.R.S. § 44-1201 provides for 10% interest on all judgments, except that interest on a judgment in a condemnation proceeding instituted by a city, town, county, the department of transportation, a county flood control district, power district, or an agricultural improvement district shall be based on “the prime rate.” See A.R.S. § 9-409 (cities and towns); A.R.S. § 11-269.04 (counties); A.R.S. § 28-7101 (ADOT); A.R.S. § 48-3628 (county flood control districts, power districts, and agricultural improvement districts).

The award of interest is part of the just compensation guaranteed by the constitution, in that the owner is not limited to the value of the property at the time of taking; he is entitled to such addition as will produce the full equivalent of that value paid contemporaneously with the taking. Interest at a proper rate is considered a good measure by which to ascertain the amount to be so added.

Tucson Airport Auth. v. Freilich, 136 Ariz. 280, 665 P.2d 1002 (1983)

Failure to compute prejudgment interest according to what “a reasonably prudent person investing funds so as to produce a reasonable return while maintaining safety of principal” may...