Understanding the Eminent Domain Process for Florida Commercial Property Owners

Florida law permits the government to take private property for public use through a process known as eminent domain, provided it pays the owner full compensation. For a commercial property owner, this power can disrupt business operations, reduce property value, or force a complete relocation. Under Florida law, you are entitled to a process designed to protect your financial interests, including compensation not only for the real estate itself, but potentially for lost business value and the costs of relocating your enterprise.

What Is Eminent Domain in Florida

Eminent domain is the inherent power of the government to take private property for a public purpose. In Florida, this authority is governed by the state constitution and specific statutes designed to ensure property owners are not unfairly burdened by public projects. Two primary requirements must be met for a taking to be valid. The property must be taken for a public use, and the owner must receive full compensation.

Public use typically includes projects such as road expansions, utility systems, schools, and government buildings. Florida law is stricter than many other states when defining public use and generally prohibits taking private property solely to transfer it to another private entity for economic development. As a result, full compensation in Florida is often broader than the federal fair market value standard. It is intended to make the owner whole and may include the value of the land taken, damages to the remaining property, and, in certain commercial cases, business damages and reimbursement of professional fees.

Entities With Condemnation Power and Inverse Condemnation

Various entities in Florida possess the power of eminent domain, including state agencies such as the Department of Transportation, county and municipal governments, school boards, and certain private companies granted condemnation authority by statute, such as utility providers or railroads.

In most cases, the government initiates the process by filing a lawsuit. However, a taking can occur without a formal filing. This is known as inverse condemnation. If a government project or regulation substantially deprives you of the beneficial use of your commercial property, such as permanently blocking access or causing recurring flooding, you may file a claim to force the government to compensate you for the de facto taking of your property rights.

Pre-Suit Negotiations and Property Valuation

Before a condemning authority may file a lawsuit, Florida law requires a mandatory pre-suit negotiation process. The government must provide the property owner with a written offer and a copy of the appraisal supporting that offer. This phase is critical because it is the first opportunity to protect your interests by challenging the government’s valuation through a counter-appraisal.

Valuing commercial property in eminent domain cases is complex and often requires determining the property’s highest and best use, which may differ from its current use. Appraisers typically evaluate factors such as:

• The market value of the land and improvements being taken
  
• Severance damages that compensate for the reduced value of the remaining property
  
• Negative impacts on access, parking, or visibility that could diminish the site’s commercial viability
  

Business Damages and Rights of Commercial Tenants

Florida is unique in allowing the recovery of business damages in certain eminent domain cases involving partial takings. To qualify, the business must generally have been established at that location for at least five years before the taking. Business damages may include lost profits and the diminution in the business’s value resulting from changes to the property’s configuration or usability.

Commercial tenants also have important rights in eminent domain proceedings. Unless a lease agreement expressly states otherwise, a tenant may be entitled to a portion of the compensation paid for the property. This can include:

• The value of the remaining leasehold interest if the rent is below the market rate
  
• Compensation for tenant-owned fixtures or trade improvements
  
• Relocation assistance to cover moving expenses and the cost of searching for a new location
  

Many tenants mistakenly assume they have no rights in such cases, which can result in significant loss of compensation.

Challenging the Taking and the Litigation Process

If negotiations fail, the condemning authority will file a petition in circuit court. Eminent domain litigation typically proceeds in two stages. First, the court conducts an order of taking hearing, during which the owner may challenge the government’s right to take the property by arguing there is no public necessity or that the selected route is arbitrary or made in bad faith.

If the court grants the Order of Taking, the government deposits its appraised value into the court registry and title transfers to the state. The second stage of litigation focuses exclusively on determining the amount of compensation. This issue is often decided by a jury after both sides present expert testimony regarding property value and damages.

Protecting Your Rights with Jimerson Birr

The eminent domain process is adversarial by design, and the government’s initial offer rarely reflects the full scope of a commercial owner’s losses. Jimerson Birr assists Florida business owners at every stage of the process, from pre-suit negotiations through trial. The firm focuses on identifying all available avenues for compensation, including business damages and relocation benefits that are frequently overlooked.

Because Florida statutes require the condemning authority to pay for the property owner’s reasonable attorney fees and expert witness costs, business owners can pursue fair compensation without those expenses depleting their recovery. Jimerson Birr works to ensure that public progress does not come at the expense of private enterprise. If you have received a notice of intent to acquire your property or a formal offer from a government agency, contact Jimerson Birr to have your case reviewed and your commercial interests protected.