Special Benefits in Real Estate

Definition of Special Benefits

Special Benefits in real estate refer to the enhancements or increases in value experienced by the untaken portion of the property during a partial condemnation. These benefits accrue to the property owner and are unique or disproportionate compared to those experienced by the overall area. Typically, during a condemnation process, the value of these special benefits may be deducted from the compensation awarded to the property owner. This concept relies on the premise that public projects resulting in partial takings confer certain benefits on the remaining property that go beyond general benefits shared by the community.

Examples of Special Benefits

1. Infrastructure Enhancements:
   • When a city widens a road and installs new water pipes, the specific properties connected to these new utilities benefit more than the surrounding neighborhood. This can increase the property value and service quality for those particular parcels.
2. Improved Accessibility:
   • Suppose a partial condemnation is undertaken for constructing a new exit ramp on a freeway adjacent to a commercial property. The easier and increased access can significantly elevate the property’s market value.
3. Utility Improvements:
   • During the condemnation for a new public park, if specific nearby properties are given enhanced sewage or electrical systems directly linked to the project, these properties experience individual benefits over the broader community.

Frequently Asked Questions (FAQ) about Special Benefits

Q1: What is the purpose of considering special benefits in real estate?

• The consideration of special benefits ensures a fair and just compensation reaches property owners during partial condemnation processes, accounting for both the losses and the unique gains to their property.

Q2: Are special benefits uniform across all properties in a condemned area?

• No, special benefits are unique to specific properties and are not uniformly experienced by all properties in the condemned area. These benefits lead to a disproportionate advantage to some property owners.

Q3: How do special benefits affect a condemnation award?

• The value of special benefits is often subtracted from the condemnation award to avoid overcompensating a property owner who benefits from the public project.

Q4: Can special benefits result in a net gain financially to the property owner after condemnation?

• While theoretically possible, the primary aim is to ensure balanced compensation. Calculations typically endeavor to cover losses adequately while adjusting for unique property enhancements.

Q5: Are special benefits always physical improvements?

• Not necessarily. Special benefits could be factors like improved accessibility, reduced flooding risks, or overall location value enhancement linked to new developments.

Related Terms with Definitions

• Condemnation: A legal process wherein property is taken for public use through eminent domain, with compensation provided.
• Setoff: A counterbalancing amount; in real estate, it can refer to the reduction in a condemnation award due to the value of special benefits.
• Eminent Domain: The right of a government to seize private property for public use with appropriate compensation.
• Partial Condemnation: The taking of a portion of a property through eminent domain, rather than the entire property.

Online Resources

1. Cornell Law School Legal Information Institute:

   • For detailed legal definitions and case references on Eminent Domain and Condemnation. LII: Eminent Domain

2. National Association of Realtors (NAR):

   • Comprehensive resources on property valuation and real estate law. NAR Official Website

3. National Business Institute (NBI):

   • Articles and courses on handling condemnation cases and real estate litigation. NBI Real Estate Resources

References

• Pennsylvania Statute Title 26 - Eminent Domain.
• “Principles of Condemnation Law” by John W. Grund.
• “Handbook of Real Estate Law” by Joel Andranovich.

Suggested Books for Further Studies

1. “Real Estate Law, 8th Edition” by Raymond J. Werner and Edward G. Robinson Comprehensive guide providing in-depth coverage of all aspects of real estate law, including condemnation and special benefits.

2. “Eminent Domain: A Handbook of Condemnation Law” by William Scheiderich

   • Essential reading for understanding various facets of condemnation laws, implications, and the calculation of compensation including special benefits.

3. “Condemnation Appraisal Practice Handbook” by the Appraisal Institute

   • Technical manual detailing the methodologies and considerations pertinent to appraisals in condemnation cases.

Real Estate Basics: Special Benefits Fundamentals Quiz