Just compensation

Just compensation is required to be paid by the Fifth Amendment to the U.S. Constitution (and counterpart state constitutions) when private property is taken (or in some states, taken or damaged). Usually, the government (condemnor) files an eminent domain action to take private property for 'public use.', but when it fails to do so and pay for the taking, the owner may seek compensation in an action called 'inverse condemnation.' For reasons of expedience, courts have been generally using fair market value as the measure of just compensation, reasoning that this is the amount that a willing seller would accept in a voluntary sales transaction, and therefore it should also be payable in an involuntary one. However, the U.S. Supreme Court has repeatedly acknowledged that 'fair market value' as defined by it falls short of what sellers would demand and receive in voluntary transactions. Just compensation is required to be paid by the Fifth Amendment to the U.S. Constitution (and counterpart state constitutions) when private property is taken (or in some states, taken or damaged). Usually, the government (condemnor) files an eminent domain action to take private property for 'public use.', but when it fails to do so and pay for the taking, the owner may seek compensation in an action called 'inverse condemnation.' For reasons of expedience, courts have been generally using fair market value as the measure of just compensation, reasoning that this is the amount that a willing seller would accept in a voluntary sales transaction, and therefore it should also be payable in an involuntary one. However, the U.S. Supreme Court has repeatedly acknowledged that 'fair market value' as defined by it falls short of what sellers would demand and receive in voluntary transactions.