Rent-to-Buy

It's one thing for a law professor to suggest the "rent-to-buy" compensation formula for regulatory takings; it gets a lot better when a Judge of the U.S. Court of Federal Claims ("CFC") adopts the formula in an Opinion.

CFC Judge Victor Wolski entered an Opinion and Order on August 10, 2007, in Gary Bailey v. United States, published at 2007 U.S. Claims LEXIS 261, in which he validated the "rent-to-buy" compensation formula proposed by Assoc. Prof. (now Distinguished Professor) Gregory Stein (Univ. Tenn. College of Law) in his 1995 law review article, "Pinpointing the Beginning and Ending of a Temporary Regulatory Taking," 70 Wash. L. Rev. 953 (Oct. 1995).

Judge Wolski's Opinion puts to rest the government's contentions, in Collins and Galleon Bay, that compensation for a regulatory taking (in Florida) is the Fair Market Value on the date the regulation "took" the property, plus interest until payment is made.

We have consistently argued that, under Florida law, "regulatory taken" property is valued "as of the date of trial, or when title transfers, whichever comes first," unless the government has "ousted" the landowner by fencing the property or building a prison, canal, or railroad track on it.

What the "rent-to-buy" compensation formula means is easily understood. After a regulation has been determined, by a court, to have "taken" the property, the government is liable to the owner for "rent," based on market rates in the geographic area, from the date of the taking until the date the government acquires the full, fee-simple, interest in the property. That can occur either at the time of a condemnation trial, or when a court "order of taking" issues after the government deposits a check for the property's "estimated value" in the Court registry.

To complete the transaction, the government then must pay the owner the Fair Market Value of the property as of the date of the condemnation trial, or as of the date of an "order of taking," if the government has already made a "good-faith deposit" of the Fair Market Value.

That is how Florida Eminent Domain law works; the State and County are having a cow over what they decry to be "two takings" when there should only be one. That is why this Blog is entitled Grand Theft: Property.

Judge Wolski's 53-page Opinion and Order can be downloaded from the CFC's website, at http://www.uscfc.uscourts.gov/Opinions/Wolski/07/WOLSKI.BAILEY081007.pdf