Just Compensation Demand - California

DEMAND FOR JUST COMPENSATION — CALIFORNIA

SENT VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED, AND EMAIL

I. INTRODUCTION AND PURPOSE

This letter is a formal demand for just compensation made on behalf of [OWNER NAME] ("Owner"), the owner of the property identified above (the "Property")[, and [BUSINESS NAME], the business operated on the Property], in connection with the proposed acquisition by [CONDEMNING AUTHORITY / PUBLIC ENTITY] ("Condemnor") for the [PROJECT] (the "Project").

The Owner is entitled to just compensation under Cal. Const. art. I, § 19, and the Eminent Domain Law, Cal. Code Civ. Proc. § 1230.010 et seq. This demand states the Owner's valuation (including loss of business goodwill, if any), the basis for it, and responds to the Condemnor's offer. The Owner sends this letter in good faith to resolve the matter without litigation, while expressly reserving all rights.

II. IDENTIFICATION OF THE PROPERTY AND THE TAKING

III. THE GOVERNING JUST-COMPENSATION STANDARD IN CALIFORNIA

1. Constitutional measure — "taken or damaged"; jury fixes value. Private property may be "taken or damaged for public use … only when just compensation … has first been paid," and compensation is ascertained by a jury unless waived. Cal. Const. art. I, § 19.

2. Fair market value. The measure of compensation for the property taken is its fair market value — the highest price on the open market between a willing, informed buyer and seller, neither under compulsion. Cal. Code Civ. Proc. §§ 1263.310, 1263.320.

3. Severance damages. On a partial taking, the Owner is entitled to severance damages — the injury to the remainder caused by the taking and the construction and use of the Project — offset by any special benefits to the remainder. Cal. Code Civ. Proc. § 1263.410 et seq.

4. Loss of business goodwill (distinctive to California). The owner of a business conducted on the property taken, or on the remainder, is entitled to compensation for loss of goodwill if the owner proves the loss (a) is caused by the taking; (b) cannot reasonably be prevented by relocation or by prudent mitigation; (c) is not included in Gov. Code § 7262 relocation payments; and (d) is not duplicated in other compensation. Cal. Code Civ. Proc. § 1263.510. "Goodwill" is the benefit from a business's location, reputation, skill, quality, and other circumstances producing retention of old or acquisition of new patronage. The court decides entitlement; the jury decides amount; some unavoidable loss suffices to establish entitlement.

5. Fixtures and equipment. Compensable fixtures and equipment are valued under Cal. Code Civ. Proc. § 1263.205 et seq.

IV. OWNER'S VALUATION — ITEMIZED DEMAND

Based on the appraisal and analysis described in Section V, the Owner's just-compensation valuation is as follows:

The Owner hereby demands payment of just compensation in the total amount of $[____________].

V. BASIS AND APPRAISAL SUPPORT

This demand is supported by:

☐ Real-property appraisal of [APPRAISER NAME / FIRM], dated [__/__/____], opining a value of $[____________] (Exhibit B)

☐ Goodwill / business-loss valuation by [FORENSIC ACCOUNTANT / APPRAISER], dated [__/__/____] (Exhibit C)

☐ Relocation site-search / mitigation log (supporting § 1263.510 entitlement)

☐ Before-and-after analysis of the larger parcel (partial taking)

☐ Comparable sales / cost-to-cure estimate

☐ Survey / site plan; photographs (Exhibit D)

☐ Business tax returns / income and expense statements (3–5 years)

☐ Other: [________________________________]

VI. STATUTORY LEVERAGE — CONDEMNOR'S OBLIGATIONS AND FEE EXPOSURE

1. Pre-acquisition written offer at full appraisal. The Condemnor must make a written offer to acquire the Property for not less than its approved appraisal of fair market value, with a written summary of the basis. Cal. Gov. Code § 7267.2. The Owner demands a copy of the Condemnor's appraisal and the basis for its offer.

2. Possession only after deposit. The Condemnor may obtain an order for possession only after depositing the probable amount of compensation. Cal. Code Civ. Proc. §§ 1255.410, 1255.010 et seq.

3. Final offer / final demand → litigation expenses (the key fee lever). At least 20 days before the compensation trial, the Condemnor must file a final offer and the Owner a final demand, each of which "shall include all compensation required pursuant to this title, including compensation for loss of goodwill, if any." If, after judgment, the court finds the Condemnor's final offer was unreasonable and the Owner's final demand was reasonable in light of the evidence and the award, the Owner recovers litigation expenses — defined as the Owner's reasonable attorney's fees and costs, including reasonable expert witness and appraiser fees. Cal. Code Civ. Proc. § 1250.410(b), (e). A final offer made contingent on later agency approvals is per se unreasonable. (City & County of San Francisco v. PCF Acquisitionco, LLC (2015).)

4. Jury determines value. The amount of just compensation, including goodwill and severance damages, is determined by a jury unless waived. Cal. Const. art. I, § 19.

This demand is made in good faith and is intended to support a reasonable § 1250.410 final demand. The Owner's valuation should be met; a final offer materially below the just compensation ultimately awarded will expose the Condemnor to the Owner's litigation expenses, including attorney, appraiser, and expert fees.

VII. DEMAND AND DEADLINE TO RESPOND

The Owner demands that the Condemnor:

1. Pay just compensation in the amount of $[____________] (including loss of goodwill); or

2. Within [____] days of the date of this letter, respond in writing with (a) the Condemnor's appraisal and the basis for its offer, (b) an explanation of any disagreement with the Owner's valuation, including goodwill, and (c) a good-faith counter-offer.

If the Condemnor does not respond by [__/__/____], or if its response does not reflect a good-faith effort to pay full just compensation, the Owner will pursue all available remedies and will rely on this demand in establishing the reasonableness of its § 1250.410 final demand and the Condemnor's exposure to litigation expenses.

VIII. RESERVATION OF RIGHTS

The Owner expressly reserves all rights, including the right to:

1. ☐ Demand a trial by jury on the amount of just compensation, including goodwill and severance damages (Cal. Const. art. I, § 19);
2. ☐ Contest the Condemnor's right to take, the public use, and the necessity (resolution of necessity) of the taking;
3. ☐ File an answer in any eminent domain action;
4. ☐ Pursue an inverse-condemnation claim for property "taken or damaged" without just compensation (Cal. Const. art. I, § 19; CCP § 1245.260; precondemnation/Klopping damages);
5. ☐ Recover litigation expenses — attorney, appraiser, and expert fees — under CCP § 1250.410, plus costs and interest;
6. ☐ Claim loss of business goodwill under CCP § 1263.510;
7. ☐ Amend or supplement this demand based on further appraisal or information;
8. ☐ Pursue relocation assistance and benefits under Cal. Gov. Code § 7260 et seq. (and the federal Uniform Relocation Assistance Act, 42 U.S.C. § 4601 et seq.), separate from and without duplicating just compensation.

Nothing in this letter is an admission, a waiver, or an agreement to any valuation.

IX. SIGNATURE

Respectfully submitted,

[________________________________]

[OWNER NAME / COUNSEL NAME]

☐ Owner ☐ Attorney for Owner — State Bar of California No. [__________]

[FIRM NAME]

[STREET ADDRESS]

[CITY, STATE ZIP]

Telephone: [__________] Email: [__________]

Date: [__/__/____]

X. ENCLOSURES

☐ Exhibit A — Legal description
☐ Exhibit B — Real-property appraisal report / summary
☐ Exhibit C — Goodwill / business-loss valuation
☐ Exhibit D — Survey / site plan / photographs
☐ Relocation site-search / mitigation log
☐ Authorization to represent (if counsel)

XI. CALIFORNIA PRACTICE NOTES

• "Taken or damaged"; jury fixes value. Cal. Const. art. I, § 19 compensates property "taken or damaged," broader than the federal Fifth Amendment; the jury determines the amount of compensation.
• Measure. Fair market value of the part taken (CCP §§ 1263.310, 1263.320) plus severance damages to the remainder, offset by special benefits (CCP § 1263.410).
• Goodwill (distinctive). Business goodwill loss is compensable under CCP § 1263.510 on the four-part proof; the court decides entitlement and the jury the amount; "some" unavoidable loss establishes entitlement (Yum Yum Donut; Presidio). Do not duplicate Gov. Code § 7262 relocation payments.
• Fee leverage (strong). CCP § 1250.410 final offer/final demand: if the condemnor's offer was unreasonable and the owner's demand reasonable, the owner recovers litigation expenses, including reasonable attorney, appraiser, and expert fees. Contingent final offers are per se unreasonable (PCF Acquisitionco). The pre-suit demand should set up a reasonable, well-documented final demand.
• Valuation date. Generally the date of deposit of probable compensation (if made within statutory time) or the date trial commences; confirm under CCP § 1263.110 et seq.
• Possession. Order for possession only after deposit. CCP §§ 1255.410, 1255.010 et seq.

XII. SOURCES AND REFERENCES

• Cal. Const. art. I, § 19 — https://leginfo.legislature.ca.gov/
• Cal. Code Civ. Proc. § 1263.310, § 1263.320, § 1263.410 (measure; FMV; severance)
• Cal. Code Civ. Proc. § 1263.510 (loss of goodwill) — https://codes.findlaw.com/ca/code-of-civil-procedure/ccp-sect-1263-510/
• Cal. Code Civ. Proc. § 1250.410 (final offer/demand; litigation expenses) — https://codes.findlaw.com/ca/code-of-civil-procedure/ccp-sect-1250-410/
• Cal. Code Civ. Proc. § 1255.410 (order for possession after deposit)
• Cal. Gov. Code § 7267.2 (pre-acquisition offer); § 7262 (relocation payments)
• City & County of San Francisco v. PCF Acquisitionco, LLC (Cal. Ct. App. 2015); LAMTA v. Yum Yum Donut Shops, Inc.; People ex rel. Dep't of Transp. v. Presidio Performing Arts Foundation

Disclaimer: This template is provided for informational purposes only and does not constitute legal advice. An attorney licensed in California, working with qualified real-property and goodwill appraisers, must review and customize this document before use. Laws, citations, and case law change; verify all authorities before relying on them.