Right to Compensation: Are Signs and Billboards Subject to Eminent Domain in Florida?
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Sign, sign, everywhere a sign. Businesses all over Florida use signs and billboards to advertise their brands and products to the consuming public. Private landowners can make money by granting easements to outdoor advertising companies, which construct billboards on property nearby major interstates. Some property owners may wish to advertise their own businesses with signs on their property. If a government project results in a taking that interferes with the visibility or location of signs and billboards, the owners may be entitled to compensation.
Federal Highway Beautification Act
In an effort to control outdoor advertising along the interstates throughout the country, Congress passed the Highway Beautification Act of 1965. This allowed the federal government to work with each state to control and restrict the construction of new billboards.
Soon thereafter, Florida enacted its own outdoor advertising control laws to limit the construction of new billboards and to protect the rights of owners of existing billboards. If the statutory limitations have the effect of terminating vested rights to a pre-existing billboard, such limitations are deemed a compensable taking. National Advertising Co. v. State, Dept. of Transportation, 611 So. 2d 566 (Fla. 1st DCA 1993). However, if a billboard is illegally constructed, the government may lawfully remove it and assess the costs of removal to the owner. Fla. Stat. § 479.105; Dept. of Transportation v. Durden, 471 So. 2d 1271 (Fla. 1985) (finding no compensation is due to the owner for taking of signage).
Under Florida law, so long as the sign is lawful and conforming, just compensation shall be paid by Florida’s Department of Transportation (“FDOT”) for any acquisition of the signage. Fla. Stat. § 479.24(1). Further, any destruction of a billboard structure by a condemning authority constitutes a taking. And a taking requires payment of compensation to the owner. Hernando County v. Anderson, 737 So. 2d 569 (Fla. 5th DCA 1999); see National Advertising Co., 611 So. 2d 566 (holding that leasehold interests in billboards are protected and compensable upon a taking).
Determining The Value Of A Taking
In determining the value of a taking of an interest in a billboard, a jury typically decides the compensation. Then the court may apportion the award among all parties with an interest in the property. Id. In those cases, the court has discretion to sever the proceedings regarding the value of the billboard and proceedings governing the value of the underlying land taken. State, Dept. of Transportation v. Powell, 721 So. 2d 795 (Fla. 1st DCA 1998).
The value of a taking of an interest in a billboard can be determined by various standard appraisal methods. Specifically, the value of a billboard can be determined through measurement of income, comparable sales approach or a hybrid of bot. This is often referred to as the Gross Income Multiplier method (“GIM”). The GIM method is determined by measuring the comparable sales prices over the annual gross revenues. This method derives a comparison multiplier that can be applied to calculate a billboard’s fair market value. This valuation method has been expressly approved by certain courts. See Powell, 721 So. 2d 795. Owners should consider retaining a qualified real estate appraiser familiar with such valuation methods to determine the highest and best value for the billboard.
Additional Compensation For An Owner Of An Interest In Billboards
An owner of an interest in a billboard may also be compensation for the loss of obstruction of the view of the billboard. Specifically, if construction of a sound wall or noise-barrier along a highway will obstruct a lawfully constructed sign, the condemning must allow for, among other things, an increase in the height of the signage or compensation of fair market value for the signage. Fla. Stat. § 479.25.
In the case of a taking of property involving billboards, many parties can be affected. This includes the owners of the property upon which a billboard is located, the owners of the easement for use and access to the billboard, and leasehold interests, among others. In these scenarios, such a taking can involve a comprehensive apportionment of compensation to various parties. Qualified eminent domain counsel can aid you in navigating the intricacies of valuation to ensure that owners receive full and fair compensation.