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Severance damages means the compensation given to a property owner for the loss in value of a portion of land and for the decrease in value to the remaining property which the government takes for public use by condemnation under its eminent domain rights. Therefore, severance damages refer to the damages awarded to a property owner for reduction in the fair market value of land as a result of severance from the land of the property actually condemned. Usually, when a state condemns land for highway construction they will pay to the landowner the value of the land taken plus severance damages for repairs to the remaining property incurred by the landowner following construction of the highway. The determination of severance damages must be made on the basis of the entire difference between the fair market value of the remainder of the property before the taking and the fair market value of the property subsequent to the taking. As a general rule, market value is fixed at the time of the taking. Although the property may, at some time in the future, become useful for residential purposes, this cannot be taken into consideration unless it is shown that it could be so developed in the not too distant future. Where the loss of aesthetic considerations serves to reduce the market value of the remainder of the property, they certainly may be considered in determining the amount of severance damages to be awarded.
In Hatcher v. Gulf States Utilities Co., 219 So. 2d 208 (La. Ct. App. 1969), the court observed that “Severance damages are those damages awarded to a landowner arising out of the damage done to the remaining property because of its severance from the expropriated property. These damages can be determined at the moment of expropriation and not at some later period.”
Further, in People ex rel. Department of Public Works v. Hayward Bldg. Materials Co., 213 Cal. App. 2d 457 (Cal. Ct. App. 1963), the court observed that “The rule of severance damages is clear: it is the net loss in the market value of the remainder. Costs of reconstruction constitute merely evidence bearing on such loss.”