What is the term for a situation where a property owner receives compensation for the loss of the property?

The term that describes a situation in which a property owner receives compensation for the loss of their property is "Eminent Domain." This legal principle allows the government to take private property for public use, provided that the property owner is compensated fairly. The compensation is usually based on the market value of the property, ensuring that the owner is not left at a financial loss due to the taking of their property.

This process is typically invoked for public projects such as the construction of highways, schools, or parks, where the need for public benefit outweighs the owner's rights to the property. Eminent domain is governed by the Fifth Amendment of the U.S. Constitution, which requires just compensation.

In contrast, foreclosure refers to a lender's legal process to reclaim property when a borrower defaults on a loan. Insurable interest involves a financial stake in a property that justifies the purchase of insurance, while a tax lien is a claim placed on property due to unpaid taxes. All of these terms represent different aspects of property law but do not pertain to the scenario of receiving compensation for property loss as prominently as eminent domain does.