Oregon 30-Hour Real Estate Law Practice Test

What must a property owner receive when the government takes private property under the power of eminent domain?

1. Restitution

2. Compensation

3. Market value

4. Tax exemption

The correct answer is: Compensation

When the government exercises its power of eminent domain, the property owner is entitled to receive compensation for the property taken. This compensation is intended to be just and fair, reflecting the loss that the property owner experiences due to the taking. It is important to note that "compensation" encompasses a broader legal principle, ensuring that property owners are reimbursed for their property rights when the government acquires land for public use, such as for infrastructure projects or urban development. The goal of this principle is to provide equitable treatment to property owners, preventing them from being unfairly disadvantaged by governmental actions. While "market value" could also seem relevant, it is more specific and typically represents an aspect of compensation. The term "compensation" itself is more encompassing, covering not just the market value but potentially other factors as well, such as costs associated with relocation or loss of business. The other options, such as restitution or tax exemptions, do not apply in this context. Restitution refers to restoring something to its rightful owner, while tax exemption is unrelated to the context of eminent domain. Thus, the requirement for compensation ensures that property owners receive fair treatment when their property is taken for public use.