The Government Is Buying Your Commercial Property--Now What?

When the government uses its power of eminent domain, it forces owners to sell all or part of their property. We often hear of the government seizing residential real estate. But often, government projects require the purchase of commercial property, too. Here’s what you can expect when you get word that your city, county, or the state or federal government is taking over your commercial property.

Expect—and Demand—to Be Offered Just Compensation

When the government seizes your property with its power of eminent domain, it is required to pay you just compensation. This means the government has to pay you fair market value for the property it’s taking.

The most important thing to remember about just compensation is that the government’s offer is negotiable. You do not have to accept its first offer. Get your own evaluation and to speak with an eminent domain attorney for guidance in determining just compensation.

Determine Fair Market Value on Your Own

The government will look at property tax levies, special assessments, and the value of existing structures to evaluate your property. It will also look at comparable properties in the neighborhood to come up with its own idea of fair market value.

You and your lawyer should do the same. Hire real estate professionals to analyze and price your property. If the government is only taking a portion of your property, consider whether the value of your property will increase or decrease. If you suspect it will go down, your just compensation should include payment for this depreciation.

You’re Entitled to Relocation Help

If it’s seizing your entire property, the government must provide financial and professional resources to help you—and your tenants—find a similar property elsewhere. Your reimbursement amount may vary depending on whether the federal, state, county, or municipal government is footing the bill.

You have the right to negotiate what a “similar” property is as well as the amount you received in reimbursement for your forced move. An eminent domain lawyer can be your advocate during the relocation process.

When the government comes knocking for your commercial property, it can be confusing to know what your next steps are. The Minnesota Eminent Domain Institute (MEDI) is an excellent resource for commercial property owners, and I’m proud to be a MEDI member.

For help understanding your rights as a commercial property owner, contact Jon Morphew and the Morphew Law Office, PLLC at 612-790-9189 today for a free consultation.


Brynne Turner