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INVESTORS’ CORNER: Development prevented by NC DOT

The North Carolina Supreme Court recently stopped the Department of Transportation (DOT) from taking land without providing compensation. This occurred throughout North Carolina and many were affected. Many landowners will be entitled to receive payment for their injury.

At issue is the Map Act, which allowed the state to effectively freeze landowners rights. Under the Map Act, the DOT had the authority to prohibit landowners from developing their property. The DOT accomplished the moratorium by designating “Protected Corridors,” in which future road construction would occur. If land was in a protected corridor, it could not be developed it. Therefore, the full profit potential often went unrealized. Yet no compensation was awarded for the damage.

Often the road construction never occurred, or took years or even decades to be realized. Throughout the lapse of time, landowners were prevented from developing land. This tactic has been used since 1987.

Legally, the DOT’s behavior is categorized as a “taking.” If the government “takes” your land, just compensation must be provided. In N.C., compensation is to be provided based upon what the landowner has lost.

Practically, this means that many landowners and investors now have a claim against the DOT for loss. Years of damages might exist. Those once prevented from developing land now have a right to compensation.

Yet, just compensation is not automatically awarded to the landowner. In order to make a claim, a lawsuit must be filed against the DOT. Those affected by the DOT’s actions must take action in order to receive their proper award.

Attorney Craig Morgan is a member of Metrolina Real Estate Investors Association, www.MetrolinaREIA.com, which provides education, networking, and mentoring to investors in the greater Charlotte area, as well as managing attorney at Providence Law. He can be reached at Craig@providencelawcarolina.com, (www.providencelawcarolina.com).

 

 

 

 

 

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