Relocation Benefits and Eminent Domain: How do they Fit Together?

by Nossaman LLP

One issue that eminent domain attorneys face routinely involves helping businesses obtain the relocation benefits to which they are entitled under the law, while at the same time pursuing a claim for lost business goodwill.  To us, there is a clear difference between the two, as we are indoctrinated early in our careers into understanding that the two types of relief, while seemingly closely related, are instead largely unrelated in the eyes of the law. 

But to a typical business owner facing a forced relocation due to a government acquisition, the issues can appear thorny and complex.  And, let's face it, pretty arbitrary.  Stepping back, I can understand why owners feel that way.  After all, they are concerned with relocating, preserving their business, and minimizing losses along the way.  What does it possibly matter whether the business lost money due to the cost of relocating equipment or due to increased rent at the new location? 

But under the law, the difference is important, and it dictates how -- and if -- the business owner can recover.  A short blog post is not the place to go into detail on how all of this works, but I do want to hit a couple of key points for people to keep in mind. 

First, relocation expenses are almost always handled outside any eminent domain action.  The owner will typically work with a representative of the condemning agency to document the relocation expenses that the law deems recoverable, and the owner will submit a claim to the agency.  If everything appears satisfactory to the agency, the owner will receive a check. 

Second, if there is a dispute over what relocation expenses are recoverable and what are not, the owner typically must first go through some type of administrative appeal process in an effort to convince the agency to change its mind.  At this point, it is often crucial to have an eminent domain attorney helping you, because some of the rules are hyper-technical and (sadly) a bit nonsensical. 

If the administrative appeal does not solve the problem, the owner is free to sue, but even then, the lawsuit would be separate from any condemnation action.

Third, in the condemnation action, owners used to routinely capitalize relocation costs that the agency deemed non-compensable, folding those costs into a "loss of business goodwill" claim.  But California law has changed, and this tactic is largely no longer possible.  (For more on that, see our post on Los Angeles Unified School District v. Casasola.)

Fourth, goodwill claims come with their own set of technical, procedural requirements, and it is pretty easy to make what seems like a harmless mistake, only to discover that it destroys the entire goodwill claim.  (While representing an agency, I once had an owner admit on the witness stand that he didn't really try to relocate the business.  The owner wasn't too concerned about the testimony until he learned that that one answer precluded any recovery for lost business goodwill.)

Because of this, business owners facing a condemnation action should consider hiring a qualified eminent domain attorney early in the process.  This can be crucial if the owner is to avoid making one of those simple -- but fatal -- mistakes (which can occur even before a condemnation lawsuit is filed).

So there you have it.  Just enough about relocation and business goodwill that you are likely more confused now than you were when you started reading.  But look on the bright side.  Unlike me, you probably don't have to deal with these issues every day.  (And if you really are confused about how all this works, feel free to send me an email or give me a call; hopefully I can clear things up or, better yet, refer to you one of my more talented colleagues.)

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Nossaman LLP | Attorney Advertising

Written by:

Nossaman LLP

Nossaman LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.