Pro Tanto Definition

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What Is Pro Tanto?

Pro tanto is a Latin phrase that means “only to that extent,” and is often used to denote partial fulfillment of an actual or potential obligation—often in the form of a partial payment—toward a claim asserted in a lawsuit.

Key Takeaways:

  • Pro tanto refers to a partial payment made “only to that extent” of a larger obligation or commitment.
  • In eminent domain cases, where a government seizes or condemns private property, the owner must be paid just compensation with an initial pro tanto payment.
  • Property owners seeking greater compensation above the pro tanto amount may seek remediation in court.

Understanding Pro Tanto

In the United States, states and the federal government have the right of eminent domain, which allows governments to seize land for certain reasons and transfer the title from private to public ownership.

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For example, when the national highway system was constructed under President Dwight D. Eisenhower’s direction in the 1950s, many homeowners, farmers, and ranchers had their property seized because the government needed the land to build the interstate highway system. As compensation, the government paid owners fair market value. However, what the government considers just compensation may not be considered “just” or “fair” by the person whose property is seized.

Pro tanto is commonly used in eminent domain cases to describe a partial payment made when the government seizes something without prejudice to the petitioner’s right to bring an action for the full amount that they claim is due. So, if a local government paid the owner of a property seized in an eminent domain case, pro tanto, the landowner would still have the option to counter-claim.

With regard to compensation, there is debate as to what constitutes fair recompense for owners of expropriated property. One common definition of “fair market value” is it is the “amount of money which a purchaser willing but not obligated to buy the property would pay, to an owner willing but not obligated to sell it, taking into consideration all uses to which the land was adapted and might in reason be applied.”

Pro Tanto in Property Condemnation

An act of eminent domain will sometimes deem a property condemned or unusable due to health or safety concerns. The condemning authority must provide just compensation (the language comes from the Fifth Amendment in the U.S. Constitution), and the condemnation must be carried out for some public good (such as public health).

If the property owner believe the amount offered inadequately reflects the property’s value, they can pursue the matter in court. Condemned property owners could then challenge the legality of the seizure in court, suing for more compensation or the right to keep the property based on a failure to prove the seizure was in the public interest. Before property seizure, government authorities must first appraise the property. They may then pay a pro tanto award, which the owner can accept without losing the right to sue, or the parties can come to a full settlement.

Pro tanto payments are often small compared to the amount the courts ultimately award owners of the condemned property.

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View more information: https://www.investopedia.com/terms/p/protanto.asp

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