The government must pay just compensation for those interests probably within the scope of the project from the time the government was committed to it. It may not take advantage of any depreciation in the property taken that is attributable to the project itself.
The government took the petitioner’s property in eminent domain proceedings. The petitioner, a lessee, sued the respondent to recover fair market value of the improvements he made to the property. The appellate court held petitioner was not entitled to fair market value, and the United States Supreme Court granted certiorari.
Is the lessee entitled to fair market value of the improvements he made to the property during his occupation?
Yes, the Court held petitioner could recover fair market value.
The Court held that the fifth amendment requires just compensation. Thus, the lessee was entitled to have the improvements assessed at their value without regard to the term of the lease, including the opportunity to have the lease renewed. In other words, the respondent could not consider the lease term or property depreciation in his calculation of compensation.