Are installed fixtures subject to eminent domain governmental condemnation in Florida?

By: Charles B. Jimerson, Esq. and Evan Reid, J.D. Candidate 

Property owners often install fixtures to their land without knowing that their land will one day be seized through eminent domain governmental condemnation. In Florida, property owners must be compensated for everything that is seized through eminent domain, including installed fixtures.

Requirements of Eminent Domain

At the federal level, the power of eminent domain is derived from the Fourth and Fifth Amendments. Article X, Section 6(a) of the Florida Constitution grants similarly broad power at the state level. In addition to the federal and state government, local, county, and municipal governments as well as some non-governmental entities including public utilities can exercise the power of eminent domain.

Before a governmental entity can exercise its power of eminent domain, it must prove that the intended use of the property is for the public good and must provide “just compensation” to the property owner. Roads, schools, airports, hospitals, power lines, and public utility infrastructure projects can all satisfy the requirement that seized land is used for the public good.

The process of governmental condemnation is slightly complicated when there are installed fixtures attached to the land. While installed fixtures are subject to eminent domain governmental condemnation in Florida, property owners with installed fixtures must be compensated for those fixtures.

Installed Fixtures: Real or Personal?

In general, there two types of property: real property and personal property. Real property includes things that are attached to the ground and are not easily moved. Buildings, roads, and minerals are generally considered real property. Personal property, on the other hand, includes things that are easily detached from real property and moved, such as cars, furniture, and cash. The practical classification hinges on the difficulty of moving the property in question.

While it seems straightforward to classify property as either real or personal, not everything falls neatly within those two groups. Property that does not fall within either group may be an installed fixture. Think of, for example, a factory. The building itself is real property because it is not easily moved. The inventory and most of the tools inside of it are personal property because they are easily moved, and they are not attached to the ground. But what about specialized equipment that was customized for the building and is not useful without the rest of the building?

The specific criteria for determining whether something is a fixture was explained in Rally’s Hamburgers, Inc. v. State, Dept. of Transportation, 697 So.2d 535, 537 (Fla. 1st DCA 1997), as

(1) whether the equipment is actually annexed to the realty or something appurtenant to it; (2) the appropriateness to the use or purpose of that part of the realty to which it is connected; and (3) whether it was [property owner’s] intent that the annexed equipment become a permanent attachment to the realty.

Applying this test to the factory example, (1) the equipment is physically attached to the factory building, (2) it was specifically built for that particular building, and (3) the factory owner probably intended to permanently install the equipment. Thus, the customized equipment is likely considered an installed fixture.

Compensation for Installed Fixtures

In addition to the value of any real property subject to eminent domain, “just compensation” must also take into account installed fixtures. In determining the amount due for installed fixtures, expert valuation is often needed.

The amount due depends on whether the owner of the fixture leaves the fixture behind or decides to disassemble it and reassemble it somewhere else. Thus, the recovery amount is either the “difference between the value of the machinery in place and its salvage value, [or], the cost of disassembling, trucking and reassembling the machinery . . . .” Malone v. Division of Administration, State of Florida Dept. of Transportation, 438 So.2d 857, 860 (Fla. 3d DCA 1983)disagreed with on other grounds 14 So.3d 967.

Recommended Practices & Strategies

A property owner with installed fixtures facing eminent domain governmental condemnation should keep in mind the following practices and strategies:

  1. Remain courteous in all communications. Remember, the government employees involved in the proceedings have probably developed expertise in their specific job. If a property owner is easy to deal with, then an employee may be more likely to help answer questions or exercise leniency.
  2. Identify procedural errors. Any entity seeking to exercise its power of governmental condemnation eminent domain must comply with certain procedural requirements, such as serving notice of its plans under Statute § 73.021. If it fails to do so, a landowner may be able to stop or slow down the proceedings.
  3. Obtain reliable appraisals of property value. Expert valuation of installed fixtures may be needed from those with industry knowledge, moving companies, manufacturers, or resellers.
  4. Hire competent counsel. With any eminent domain proceeding, the entity seeking to exercise its power must pay for the landowner’s attorney’s fees and court costs, pursuant to Statute §73.091(1). Each exercise of eminent domain presents unique facts and circumstances that require careful consideration. Landowners should retain trusted, experienced counsel to protect their rights and to help guide them through the eminent domain process.

Any entity wishing to exercise eminent domain governmental condemnation must provide just compensation for installed fixtures. With the proper knowledge of how to account for installed fixtures, Florida landowners can more effectively obtain the compensation they deserve.

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