Overview of Severance Damages
What Are Severance Damages?
Severance damages represent the compensation awarded to a property owner for the reduction in value to the remaining portion of their property when only part of their property is taken through condemnation or eminent domain. These damages recognize the incidental harm or inconvenience inflicted on the remaining property, aside from the direct value of the land taken.
Examples of Severance Damages
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Farm Land Severance:
- Example: The state highway department required a 100-foot wide strip from the middle of Dooley’s farm for infrastructure expansion. Dooley was compensated $1,000 per acre for the land taken and received an additional $15,000 in severance damages for the inconvenience of accessing land on either side of the new highway.
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Urban Property Severance:
- Example: A commercial developer had a small part of their property taken for a new municipal road. While compensated for the land taken, they also received severance damages due to the negative impact on the ability to access various parts of their property as efficiently as before.
Frequently Asked Questions (FAQs)
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Why is severance damage awarded?
Severance damages are awarded to ensure that property owners are justly compensated not only for the land taken but also for any depreciation in the value and usability of the remaining property.
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How are severance damages calculated?
Severance damages are typically calculated by assessing the difference in market value of the remaining property before and after the taking.
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Can severance damages apply to residential properties?
Yes, severance damages can apply to any type of property, whether residential, commercial, or agricultural, whenever a portion is taken and the remaining property’s value is adversely affected.
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Condemnation: The legal process by which the government or another entity with eminent domain authority takes private property for public use, with compensation to the owner.
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Indirect Damages: These damages refer to losses or injuries that are not a direct result of an act but occur as a secondary or incidental consequence.
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Larger Parcel: This refers to the broader tract of land under the same ownership, which experiences an impact when a portion is condemned.
Online Resources
- Investopedia’s Basics of Eminent Domain: Investopedia
- American Bar Association on Eminent Domain: ABA
- National Association of Realtors on Condemnation: NAR
References
- Federal Highway Administration: “Eminent Domain: Just Compensation for Condemnation”
- “Property Valuation and Appraisal” by David G. Lenhoff
Suggested Books for Further Studies
- “Eminent Domain: A Handbook of Condemnation Law” by William Scheier and Butch Taube
- “Real Estate Valuation in Litigation” by Richard J. Trottier
- “Appraisal of Real Estate” by Appraisal Institute
Real Estate Basics: Severance Damages Fundamentals Quiz
### What do severance damages compensate for?
- [ ] The cost of new construction
- [x] Reduction in value to the remaining property after part is taken
- [ ] Future potential losses
- [ ] Mortgage interest on the taken property
> **Explanation:** Severance damages specifically address the reduction in value suffered by the remaining property that was not directly taken but was affected as a result of the partial taking.
### Can severance damages apply to commercial properties?
- [x] Yes
- [ ] No
- [ ] Only if specified in the laws
- [ ] Only in rural areas
> **Explanation:** Severance damages can apply to any type of property, including commercial properties, where there is a recognized impact due to the partial taking of the land.
### What concept shows severance damages emerged from something aside from the land taken?
- [ ] Direct Costs
- [x] Indirect Damages
- [ ] Mitigation Expenses
- [ ] Legal Fees
> **Explanation:** Indirect damages pertain to losses that result from the taking but not from the property directly taken itself. These include severance damages due to inconvenience or decreased value of the remaining property.
### Which authority primarily deals with condemnation and thus severance damages?
- [ ] Police
- [ ] Real Estate Agencies
- [x] Government
- [ ] Homeowners Associations
> **Explanation:** The government, specifically through its power of eminent domain, primarily handles condemnation processes and assesses whether severance damages are warranted.
### Through what legal process is private property taken for public use?
- [ ] Forfeiture
- [ ] Purchase
- [x] Condemnation
- [ ] Probate
> **Explanation:** Condemnation is the legal process through which the government takes private property for public use while providing compensation to the property owner.
### Do severance damages only apply at the time of taking?
- [ ] No, they apply when property is sold.
- [x] Yes, they are calculated at the time of the taking.
- [ ] They apply continuously over time.
- [ ] They are irrelevant if property value increases.
> **Explanation:** Severance damages are calculated and applied at the time of the taking to compensate for immediate and foreseeable decreases in property value and utility.
### What must happen for severance damages to be applicable?
- [ ] A change in property zoning.
- [x] A part of the property must be taken through condemnation.
- [ ] The property must be listed for sale.
- [ ] Legal disputes about property lines.
> **Explanation:** Severance damages become applicable when part of a property is taken through the legal process of condemnation and the remainder suffers in value or usability.
### How is the value change of a property generally assessed for severance damages?
- [ ] By local government decree.
- [ ] By doubling the value of the taken part.
- [x] By a comparative market analysis before and after taking.
- [ ] By annual property tax assessments.
> **Explanation:** A comparative market analysis (CMA) is typically used, evaluating the value of the property before the taking and then assessing the change in value after the taking to calculate the severance damages.
### What should ideally accompany severance damages for fairness?
- [ ] Attorney fees reimbursement.
- [ ] Landscaping compensation.
- [x] Just compensation for the land taken.
- [ ] Future development grants.
> **Explanation:** Just compensation for the land directly taken is essential. Severance damages are supplemental to this, ensuring the owner is fairly compensated for the reduction in value of the remaining property.
### How can property owners often contest inadequate severance damages?
- [ ] Through local media
- [ ] Sending a petition to neighbors
- [x] Legal action or appeal against the valuation
- [ ] Hiring a second appraiser
> **Explanation:** Property owners can contest inadequate severance damages through legal action or by appealing the valuation method used in the grievance process of the taking.
