- What do “Eminent Domain” and “Condemnation” mean?
- Who can take property?
- What is the process?
- What is “Just Compensation”?
- What does “Damage to the Remainder” mean?
- What does “Highest and Best Use” mean?
What do “Eminent Domain” and “Condemnation” mean?
Eminent domain is the right of the government to take private property for public use or benefit, upon payment of just compensation (as required by the Fifth Amendment to the United States Constitution); condemnation is the process by which property is taken if the parties cannot agree on the amount of just compensation.
Who can take property?
Property can be taken by any entity that possesses the power of eminent domain. This includes the State (often through agencies such as the Department of Transportation), cities and counties, railroads, and utility companies.
The power of eminent domain can only be used to acquire property “for public use or benefit.” That means that property cannot be taken for the benefit of a private party. What constitutes “public use or benefit” has been widely litigated, but in general the test is (1) whether the public has a right to a definite use of the condemned property (public use), or (2) whether some benefit accrues to the public as a result of the desired condemnation (public benefit). For example, it is well-established that property can be acquired for creating new roadways or improving old ones, above- or below-ground utilities, establishing greenways and parks, building airports, or building schools or other government facilities.
What is the process?
In the case of a highway project, the Department of Transportation’s engineers will produce design plans showing the location of the right-of-way and easements on a particular project. Each parcel of property affected by the plans is identified, and the owners are contacted by a right-of-way agent. The initial contact is typically an introduction and exchange of contact information. At a later date, the State will send an appraiser out to the property to determine what the State feels is “just compensation” for the property being acquired.
The appraisal can take anywhere from six weeks to several months, depending on several factors. Once the appraisal has been submitted to the State, the right-of-way agent will present an offer to the landowner using the figures from the appraisal. It is important to note that as a property owner you have a right to a copy of your appraisal! Always request it from the right-of-way agent if they do not provide it to you.
If the property owner and State cannot agree on “just compensation,” then the State will file a lawsuit to condemn the property, and deposit with the clerk of court the funds constituting the State’s estimate of just compensation. At that point the property belongs to the State. The filing of the condemnation suit starts the litigation process. The parties will try to resolve the matter and reach an agreement at a mediation, using a neutral mediator. If that is not successful, the case will proceed to a jury trial.
What is “Just Compensation”?
Under the Fifth Amendment to the United States Constitution, if private property is taken for public use, then the property owner must receive just compensation. It is generally the difference between the fair market value of a person’s property immediately before the taking occurred and the fair market value immediately after the taking. As you might imagine, the State’s idea of just compensation is often significantly lower than the property owner’s idea.
What does “Damage to the Remainder” mean?
“Damage to the remainder” is a phrase used to describe the diminution in value to the property remaining after a taking has occurred, typically caused by things like proximity to a roadway, limitation of access, and/or presence of barrier walls or fencing. This is an important aspect of just compensation.
What does “Highest and Best Use” mean?
The Appraisal Institute defines “highest and best use” as the reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, financially feasible, and that results in the highest value. The highest and best use of a residential property might be as a residence – or it might be commercial, depending on the characteristics of the parcel and the surrounding development. Knowing the highest and best use of your property is a vital part of securing just compensation.