Just Compensation Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Just Compensation, written in plain English, along with examples of how it is used.

What is Just Compensation?

It refers to the amount of money paid for the work done or paid as to cover the loss.It also refers to the money paid by the government to use a private property to public. If the amount given is not suffcient, the owner may seek trial to get the correct deserved amount.

History and Meaning of Just Compensation

Just compensation is a legal principle that requires fair payment to be made to an owner whose property is taken by the government or whose property rights are reduced by government regulation. It is a fundamental element of property law, enshrined in the Fifth Amendment to the U.S. Constitution, which requires the government to pay "just compensation" when it takes private property for public use.

The concept of just compensation dates back to medieval England, where it was known as "reasonable value". It gained prominence in the United States during the 19th century, as the government began to expand westward and take land from private owners. Today, the principle of just compensation is a cornerstone of property law in the U.S., and it applies to both real property (such as land and buildings) and personal property (such as cars and other possessions).

Examples of Just Compensation

  1. A homeowner is forced to sell their house to make way for a new highway. The government must pay the homeowner just compensation for the fair market value of their property, as well as any damages caused by the loss of their home.
  2. A business owner's property is taken through eminent domain to make way for a new public park. The government must pay the business owner just compensation for the value of their property, as well as any loss of income or other damages caused by the taking.
  3. A farmer is subject to new environmental regulations that restrict their ability to use their land. The government must pay the farmer just compensation for the reduction in the value of their property caused by the regulations.

Legal Terms Similar to Just Compensation

  1. Eminent Domain: The power of the government to take private property for public use, provided that just compensation is paid to the owner.
  2. Inverse Condemnation: A legal action in which a property owner sues the government for compensation, alleging that a government action (such as a regulation) has effectively taken their property without just compensation.
  3. Regulatory Taking: A government action (such as a regulation) that restricts a property owner's use of their property to such an extent that it effectively takes the property without just compensation.