1.9.2. Temporary Inverse Takings. Temporary acquisitions by inverse condemnation may be by either a physical invasion of the property by the government (or an agent of the government)73 or by regulation.74 The measure of value in a temporary inverse case is the same as in the acquisition of a TCE, that is, the rental value of the land taken for the term of the taking. The substitution of a return on the fee value of the land for an opinion of the rental value of the land is not generally an accepted alternative.75 

What generally makes temporary acquisitions by inverse condemnation uniquely different from the acquisition of a TCE is the amount of indicated compensation. An inverse condemnation acquisition usually involves whole ownerships rather than a small geographical portion of the ownership, and the term of the alleged inverse taking is generally of a substantially longer period of time than the duration of a TCE. For that reason, greater care must be employed by the appraiser in developing an opinion of the value of such properties. Department of Justice legal counsel will generally provide the appraiser with the effective date of the appraisal and the duration and extent of the alleged taking. 

In a regulatory taking situation, it is possible that the regulation temporarily precludes the use of the land for its highest and best use, but secondary uses of the property remain available to the property owner. In such a case, opinions of the before and after market rent are developed to determine the difference in the rent that could have been commanded by the property during the inverse taking period. The before rent is the market or economic rent of the property for its highest and best use for the duration of the taking, and the after rent is the market or economic rent of the property for its secondary, but allowable, use during the taking period. In estimating the potential use of the subject property during the taking period, appraisers must take into account the limited duration of the period of use.76 

Because inverse condemnation cases (either permanent or temporary) are very fact-specific, it is essential that the appraiser work very closely with the Department of Justice attorney assigned to the case. Both appraiser and attorney must understand the precise question that must be addressed by the appraiser and the acceptable methodology to be used to answer it. This will often involve substantial legal research by the attorney, concluding with written legal instructions to the appraiser.77

73 See, e.g., 767 Third Ave. Assocs. v. United States, 30 Fed. Cl. 216 (1993), aff ’d 48 F. 3d 1575 (Fed. Cir. 1995).
74 See, e.g., First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U.S. 304 (1987).
75 United States v. 883.89 Acres of Land in Sebastian Cty., 442 F.2d 262, 264, 265 (8th Cir. 1971), aff’g 314 F. Supp. 238 (W.D. Ark. 1970); United States v. Michoud Indus. Facilities, 322 F.2d 698, 707 (5th Cir. 1963); United States v. 117,763 Acres of Land in Imperial Cty., 410 F. Supp. 628 (S.D. Cal. 1976), aff ’d sub nom. United States v. Shewfelt Inv. Co., 570 F.2d 290 (9th Cir. 1977).
76 For instance, if the denial of a permit for a period of three years precluded the use of a property for commercial purposes, a secondary use of industrial warehousing during the taking period would not be appropriate because the short-term life of the secondary use would not be economically feasible. However, a secondary use as an industrial equipment storage yard might be a suitable secondary use because such a use would not involve the construction of substantial improvements or a commitment to a long-term use.
77 See Section 1.9 for additional discussion of inverse condemnations.