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A Better Partnership
May 23, 2013

COA holds that property owners do not waive interest on a condemnation award by possessing a portion of property

In Lewanee Co v Wagley, the Court of Appeals held that interest on a condemnation award was properly determined by calculating it from the time that the county took possession of an 'avigation' easement, because the property owners did not have to be deprived of the entirety of their property in order for interest to begin accruing. An 'avigation' easement prevents a property owner from using the airspace over her property at a certain height, and is an acceptable alternative to the complete acquisition of property in an airport's 'runway protection zone.'

Michigan's version of the Uniform Just Compensation Statute, MCL 213.65, provides that 'an owner remaining in possession after the date that the complaint is filed waives the interest for the period of the possession.' In this case, the county argued that trial court erred in awarding statutory interest, because the owners waived the interest on their just compensation by retaining the right of possession to part of the property. Rejecting this argument, the Court of Appeals affirmed the trial court, holding that the homeowners were entitled to interest from the time that the county took possession of the easement, even though the easement only affected a portion of the owner's rights to the property. The Court of Appeals reversed the trial court on one count, holding that 2006 amendments to the Michigan just compensation statute allowing for damages enhancements could not be applied retroactively.

The partial dissent would have reversed the trial court as to statutory interest, and held instead that the homeowners waived their right to interest by remaining in possession of the property. The dissent concludes that since there was no order of interim possession in this case, the homeowners had the right to use and possess their residence while the case was pending; accordingly, the homeowners waived their right to interest, regardless of whether or not they actually lived in the home during that time.

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