Just compensation

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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, damaged) for public use. 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. Market value is not the exclusive measure of just compensation, and in unusual cases other measures of compensation can be used. United States v. Pewee Coal Co., 341 U.S. 114 (1951) (increased operational loss of a coal company during its temporary seizure by the government deemed to be the measure of compensation). The legal definition of market value is defined as the most probable price that would be paid by a willing but unpressured buyer to a willing but unpressured seller, both being fully informed as to the property's attributes and its good and bad features, including its highest and best use. This formulation assumes that the property has been exposed for sale in the market for a reasonable period of time.

Market value does not include incidental losses (e.g., cost of moving, loss of business goodwill, etc.), but some of these losses are made compensable by statutes, such as the federal Uniform Relocation Assistance Act and its state counterparts. The judicial denial of compensation for business losses suffered when a business conducted on the taken land is destroyed by the taking, has been the subject of much controversy and severe criticism by legal commentators. Nonetheless, only one state (Alaska) allows their recovery and so do a few others where it is impossible for the affected business to relocate. Some states allow recovery of business losses by statute.

Likewise, the property owner's attorneys' and appraisers' fees are not included in just compensation (except in Florida where they are awarded in all cases under the state courts' interpretation of the Florida Constitution).