The use of eminent domain to acquire commercial property impacts tenants as well as the owner/landlord of the property. Ohio uses the undivided-fee rule, which first values the property as a whole and then apportions the award to each property interest. This procedure can create tension between landlords and tenants as both parties typically want to maximize their respective compensation awards. For this reason, tenants in commercial eminent domain cases should have separate legal counsel.
To determine the tenant’s rights to recovery, the first place to look is always the lease. The terms of the lease will govern. If the lease is silent to this issue, the tenant’s measure of recovery is the market value of the use of the property for the remainder of the lease term minus the agreed rent. The tenant must essentially show that the lease has a bonus value, that is the rents payable under the lease must be shown to be less than the market rate.
Each case is different and unique. An experienced eminent domain attorney can help counsel and advise commercial tenants on the best strategy to maximize recovery. McCarthy Law Office represents clients in eminent domain cases on an hourly or contingent fee basis, depending on the facts of the case. Please contact our office with any questions.