Condemnation cases are undoubtedly on the rise in Cleveland, McClain, and Grady Counties, and road improvements, electrical transmission lines and substations, and the proposed OTA turnpike are the catalysts. The basic constitutional principle is that “[p]private property shall not be taken or damaged for public use with just compensation.” This begs the question: what is “just compensation”?

Just compensation is the fair market value of the condemned or damaged property on the taking plus any injury to land not taken. The “fair market value” is the amount of money that a willing buyer would pay to a willing seller for the property. Oklahoma law is clear that the fair market value of a property is to be determined in accordance with the property’s highest and best use for which the property is suitable, regardless of what it may have been used for in the past or what future use the landowner may have intended.

In City of Tulsa v. Creekmore, 1934 OK 57, the Court held that in determining fair market value, it is not merely the value of the property for the use to which it has been applied by the owner that should be taken into consideration but the possibility of its use for all purposes, present and prospective, for which it is adapted and to which it might in reason be applied, must be considered. Creekmore offered an example of this principle - an offering of evidence of what the value of a tract of land that is presently used for agricultural purposes or is vacant and unused, would be if developed into residential lots for homes.

Even if there is an “element of uncertainty” of a proposed use, the landowner may submit evidence of the land’s adaptability to a particular prospective use, but only if the evidence establishes that the proposed use is “within a reasonable probability.”

In this scenario, courts should consider evidence of the land’s adaptability (physical characteristics) to a particular use, as well as regulatory constraints like zoning, comprehensive plan requirements, subdivision and environmental regulations, and the like. Courts will also consider the need and demand of the proposed use by considering market activities, land scarcity, and development trends.

If your land is getting condemned, it might be worth seeking an opinion for an appraiser as to the land’s highest and best use to ensure you are receiving fair market value even if your land is vacant and not being used for anything.

By: Daniel Sadler

Director of Litigation | Attorney at Law