Minimum Compensation Claims in Cases of Partial Acquisitions

I received an email from a follower of this blog that I wanted to post for possible feedback. The person that sent the email is a right-of-way acquisition specialist for a suburban municipality.

In his email, the person stated that he thought that the minimum compensation statute is only applicable in cases where the entire property is taken or in cases where the remainder of the property may be considered an uneconomic remnant.

I responded by noting that I thought he was correct in his understanding of the statute. The statute does say "when an owner must relocate". Presumably, this means that the property owner can no longer use it for its intended purpose because the remainder does not meet setback requirements, zoning restrictions, etc.

For example, an ordinary strip taking for right-of-way purposes that does not affect the improvements would most likely not require a minimum compensation payment. That person would be entitled to compensation for the property taken and severance damages, if any, to the remainder of the property. However, if the strip taking affects the improvements, but is not a total take, and the business or resident can no longer remain on the property, then I think that property-owner would be entitled to a minimum compensation payment.

The tougher question becomes what happens in the case of a strip taking that affects the future development potential of that property. The strip taking doesn't currently affect the owner's use of the property, but maybe that property is in transition to some higher and better use because it had be previously rezoned during an amendment to the city's comprehensive plan. Right now the property is being used for residential purposes, but had been previously rezoned to office/commercial and the property owner had plans to convert their home to small office space (for an insurance office or real estate sales office). Now the property owner is nearing retirement and wants to earn rents from the conversion of their property to small office rentals. If the strip taking were to affect the use of the home for small office, would that property owner be entitled to a minimum compensation claim for the future use of that property?

That also leads to another question, how would you value that minimum compensation claim. Are their damages based upon purchasing a comparable property within the community for its current use or any possible future uses based upon the rezoning of that property. My guess is that they would be entitled to a minimum compensation claim based upon a comparable property located within a similarly zoned area. Just my thoughts.

Does anyone else have any thoughts on the issues raised in this post?