Temporary construction easements (TCEs) grant a third party—often a developer, utility provider, or public agency—the legal right to use part of a property for a limited period to complete construction-related work. While TCEs can be critical for infrastructure and development projects, their use often disrupts the property owner’s rights and can diminish the property’s value during the easement term.
California law ensures that property owners are entitled to just compensation for TCEs, whether the easement is granted voluntarily or acquired through eminent domain. Proper valuation is essential to securing fair payment and avoiding undercompensation.
The Legal Basis for Compensation
California’s eminent domain statutes expressly require that property owners be compensated for temporary use of their property. Under Cal. Code Civ. Proc. § 1263.310, compensation must reflect the fair market value of the easement plus any severance damages to the remainder of the property.
In People ex rel. Dept. of Public Works v. Lynbar, Inc., 253 Cal. App. 2d 870 (1967), the court confirmed that temporary easement compensation is measured by the rental value of the land for the period of use, along with any proven loss of use or damage to the property.
Key Components of TCE Valuation
- Fair Market Rental Value
The starting point is determining what a willing tenant would pay to rent the affected portion of the property for the term of the easement. This calculation typically considers:- Size of the easement area.
- Location and accessibility.
- Current market rents for similar property uses.
- Impact on Property Use
Even if only part of the property is affected, construction activities may interfere with the use of the remainder—such as by blocking access, increasing noise, or disrupting business operations. These impacts can support additional compensation. - Severance Damages
If the TCE temporarily diminishes the value of the remainder property (outside the easement area), Cal. Code Civ. Proc. § 1263.410 allows for recovery of severance damages. For example, blocking customer access to a retail business may reduce its income during the easement period. - Restoration Costs
If the property requires repairs or restoration after construction ends, the cost of returning it to its pre-easement condition may be factored into the valuation or addressed separately as damages under Cal. Civ. Code § 3333. - Business Interruption
For income-producing properties, business interruption losses may be compensable if they are directly caused by the TCE and are reasonably certain in amount, supported by financial records.
Appraisal Methods
Professional appraisers use several approaches to value TCEs:
- Income Approach — Calculates rental value based on income potential of the easement area.
- Comparable Lease Data — Uses recent leases of similar properties for similar purposes to estimate rental value.
- Cost Approach — Less common for TCEs but may apply where easement use causes measurable temporary replacement costs.
Selecting the appropriate method depends on the property type, market data availability, and the nature of the easement use.
Negotiated vs. Condemned Easements
For voluntarily negotiated TCEs, owners have more flexibility to include compensation for:
- Inconvenience.
- Increased insurance premiums.
- Broader restoration obligations.
In eminent domain proceedings, compensation is limited to legally recognized categories, but courts have interpreted these broadly when supported by credible evidence (Lynbar, supra).
Practical Steps for Property Owners
To maximize compensation:
- Document Pre-Easement Conditions — Photographs, surveys, and inspection reports can help prove restoration costs.
- Track Disruptions and Losses — Maintain records of reduced property use, lost income, or other impacts.
- Engage an Experienced Appraiser — Use an expert familiar with TCE valuation and California eminent domain law.
- Negotiate Protective Terms — Even in condemnation cases, stipulations can address restoration, indemnity, and use restrictions.
Conclusion and Call to Action
Valuing a temporary construction easement requires more than estimating rental value—it demands a comprehensive analysis of use restrictions, project impacts, and restoration needs. Under California law, property owners are entitled to full and fair compensation for all provable losses resulting from a TCE. At Guiding Legal Counsel, APC, we represent property owners in negotiations and eminent domain proceedings to ensure that compensation reflects the true cost of granting temporary access. Contact us today to schedule a confidential consultation and protect your financial interests before agreeing to or contesting a TCE.