severance damages

severance damages

The compensation to a property owner after the government takes some portion of real property by condemnation under its eminent domain rights and,as a result,causes a decrease in value to the remaining property.

Example: Annie's Corner Grocery received a $135,000 condemnation award when the city took one-half of the grocery's parking lot in order to expand the library, and an additional $200,000 in severance damages because the grocery store itself was now much less valuable with the smaller parking lot.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.

Severance Damages

Payment received because part of a property is condemned and the value of the retained part is thereby decreased.
Copyright © 2008 H&R Block. All Rights Reserved. Reproduced with permission from H&R Block Glossary
References in periodicals archive ?
(84) The government may also pay severance damages to the taxpayer for a decline in the value of the portion of the property the taxpayer retains.
As for the remainder property, the lower court's award of $37,000 for severance damages was reversed as the appraiser had comingled two mutually exclusive approaches recognized in valuing a partial taking, thus resulting in double compensation.
The owner's appraiser concluded that absent the project, the license would have remained in effect, or potentially converted to an easement, and damages due to the direct loss of access caused millions in severance damages. The public agency's appraiser did not consider the loss of access because the owner only had a revocable license that contained a waiver of damages in the event of termination.
Severance damages are a clear example in Louisiana where depreciation in property value is compensable.
(7) If the commercial tenant is allowed to share in the compensation paid for the real estate, the tenant will typically recover the value of any lost fixtures less any salvage value as an element of severance damages. (8) On the other hand, if the equipment is determined to be personal property, no compensation is due for any reduction in value the equipment may suffer upon its removal and relocation.
Focusing on larger parcels, uneconomic remnants, cost to cure, and severance damages, the course discusses the qualifications, roles, and responsibilities of the review appraiser from pre- to post-appraisal activities.
It covers Section 1033, a provision that allows taxpayers to defer gain recognition on involuntary converted property, business interruption insurance, involuntary conversion examples, and reviews severance damages, separate awards, and replacement periods.
Both appraisers had the same facts and a very similar opinion of value of the easement, but they arrived at immensely different opinions on severance damages based on different valuation methods: one considering the project in the manner proposed and the other the most injurious use.
At trial Sound Transit's appraiser testified the permanent easement was worth $113,169, the TCE was worth $61,503, and there were no severance damages. Severance damages are the amount by which the permanent easement damages the remainder of the property.
Where the property owner can substantiate severance damages, opportunities to offset basis against the retained property exist.
The first category is "[t]he value of the property sought to be appropriated." (3) In the next category, severance damages and business damages may be available where less than the entire property is sought to be appropriated.