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Casino Reinvestment Development Authority v. Hauck

162 N.J. 576, 745 A.2d 1163 (2000)

CONDEMNATION—Interest on a condemnation award runs from the date of the commencement of the action, but in times of great rate fluctuations, it may differ from that set by Court Rule.

Property was condemned by a development authority. After a jury trial award, the lower court granted interest on the award, computing it at the rate set in Rule 4:42-11 and calculating it from the date the condemnation action was filed. The property owners challenged the interest rate, arguing that a higher rate should have been paid. They also argued that interest should have been granted from the date that the property was valued. The Appellate Division concluded that interest on a condemnation award runs from the date on which the condemnation begins, but upheld application of the interest rate in Rule 4:42-11. The matter was then appealed to the New Jersey Supreme Court, which held that the Court Rule established the appropriate interest rate and that interest was properly added to the condemnation award from the date the condemnation action began. In doing so, the Court followed the Eminent Domain Act of 1971 which “clearly establishes that interest on a condemnation award runs from the date of the commencement of the action until the date of payment of compensation, ..., and not from the date of valuation which serves an entirely different statutory purpose.” Under certain circumstances, interest may be applied from an earlier date where governmental action substantially affects use and enjoyment of the property, but there must be proof that there has been substantial destruction of the value of the property and that the condemning authority’s activities were a substantial factor in bringing that about. Here, there was no such proof. With respect to the interest rate, the Court did not suggest that the rate prescribed under the Court Rule would always be appropriate, only that it was appropriate in this case. “Indeed, in times of great interest fluctuations, where the interest rate prescribed by the court rule is inadequate to indemnify the condemnee, application of a different rate may well be warranted.”


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