Just Compensation


DEFINITION of 'Just Compensation'

Compensation provided to an owner whose private real property is seized by the government's power of eminent domain, which allows it to take such property for public use. For example, when the national highway system was being constructed in the 1950s, many homeowners had their property seized through eminent domain because the government wanted the land to build the highway system. The just compensation remedy is provided by the Fifth Amendment's taking clause, and is usually considered to be fair market value. However, what the government considers just compensation may not be considered as such by the person whose property is seized.

BREAKING DOWN 'Just Compensation'

One reason why an individual who loses his home to eminent domain may not consider the fair market value of the property to be just compensation is because it does not take into account the time, stress, and expense of locating, purchasing, and moving to a new property. Just compensation also fails to account for the loss of neighborhood social networks or the emotional ties the owner may have to the property.

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