However, that also has the effect of tipping the playing field toward the state, Dunlevy said."If continent fees are not reimbursable under the statute or are only payable out of the condemnation award
outside the statute, then wealthy fee owners will be better able to afford counsel than less wealthy fee owners."
Nevertheless, the trial court awarded Kmart a condemnation award
of $1.4 million.
BEB Capital's total condemnation award
from the MTA was just over USD 3.6 million.
For example, a nontaxable condemnation award
may include taxable interest that was not separately stated and therefore easily overlooked.
The IRS position is that a condemnation award
must segregate severance damages and other components, or else a presumption exists that the award was only for the property taken.
If the property is condemned, the ground lease should provide for an equitable sharing of the condemnation award
. First, the landlord should receive the value of the land as unimproved and not subject to the burden or benefit of the ground lease.
The Eminent Domain Procedure Law allows property owners to seek reimbursement for attorneys' fees, costs and expenses when the court's condemnation award
is substantially in excess of the condemnor's initial valuation.
Owners of property taken in eminent domain may defer the payment of expert fees until the conclusion of the case, and experts who provide impartial and unbiased opinions of value are assured of payment either from the condemning authority or the owner's condemnation award
if the owner has been sanctioned for the unreasonable rejection of an offer of judgment.
Subject to certain thresholds and limits, the loan documents will require the borrower to restore the property with the insurance proceeds or condemnation award
. This is unlike the usual Main Street lender's requirement that it retain discretion about applying such proceeds or award to the reduction of principal.
Takings, especially partial takings, that involve leasehold interests can present unique and complex valuation challenges in analyzing the distribution of proceeds from a condemnation award
. How an award is distributed among competing interest holders of a property depends on the language of the lease, including the length of the remaining term of the lease, renewal options, contract rent, and, most importantly, the condemnation clause.
For example, attorney's fees incurred in connection with the recovery of interest paid on a condemnation award
were nondeductible capital expenses, because they were incurred to increase an award for loss of property.
Marcus said he was reminded of one of his previous matters, where the judge ruled the 6 percent interest rate on a condemnation award
was unconstitutional and raised it to 9 percent.