Whether purchasing or leasing commercial real estate, where you decide to locate your business is critical. Some businesses remain in the same location for decades, even though major changes in ownership or operations.
Some businesses are forced to move because they fall behind on rent, outgrow the space, simply close their doors, or other similar reasons. Other businesses, however, may have their location threatened for reasons that are completely beyond their control. In such situations, an owner should contact an experienced commercial real estate and business attorney to determine their options and rights as soon as possible.
Eminent domain can affect businesses
Under the Fifth Amendment of the Constitution of the United States, the government has the authority to take private property from rightful owners under certain conditions. First, the takings must be for “public use,” though the definition of public use has been broadly interpreted. Additionally, the government is required to justly compensate property owners for the taking of their property. These takings are commonly referred to as “eminent domain” or “condemnation,” which is different from condemning a property due to a state of disrepair.
While condemnation is most often associated with the destruction of homes or neighborhoods, the government also has the right to seize commercial real estate. In fact, business districts are often affected by the widening of highways or the construction of larger-scale commercial developments. Whether you rent or own your commercial space, you may be forced to move due to eminent domain.
Losing your location can be harmful to business:
- Finding a suitable location to move your business can be costly.
- If your business is located in a high-traffic area that attracted many customers you may not be able to find a new location with similar attributes.
- If your property is specifically tailored for the operations of your business relocating may result in considerable expense.
Rights of businesses in condemnation actions
Because relocating your business can cause substantial hardship, you want to make sure the taking of the property is valid and that your rights as a business owner are protected. A commercial real estate attorney can evaluate the eminent domain action and can assist you in responding to the action. If the condemnation does occur and you have to move, an attorney can make sure that you’re properly compensated.
If you have any legal question related to business or commercial real estate, please do not hesitate to call the Structure Law Group in San Jose at 408-441-7500 for help today.