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UDOT v. Kmart Corp., 2018 UT 54 (Sept. 25, 2018)

Sep 25, 2018

UDOT appealed a condemnation award arguing that Kmart’s leasehold interest had no value because the lease contained a clause that terminated the lease upon condemnation of the subject property.  The Utah Supreme Court agreed with UDOT and adopted the termination clause rule from other jurisdictions.  This rule provides that when a lease agreement provides a termination upon condemnation clause, the lessee is not entitled to a condemnation award.  Utah’s constitutional guarantee of just compensation is only triggered if the party shows a protectable property interest, and in this case, a lessee has no protectable property interest.