Condemnation and eminent domain are two terms in the land buying industry that you’ll encounter.
Often, you’ll hear about them most when there is a major news event around the seizure of private lands for a public project.
And in these contexts, the information you get about the nature of eminent domain and condemnation may be sensationalized, confusing or incomplete.
So to start with, while eminent domain refers to a right that the government has, condemnation defines the process by which the government can carry out that right.
As a property owner, you may encounter the government utilizing the power of eminent domain.
Knowing how to handle the process of condemnation can help you obtain the best outcome for your property.
In this blog, we’ll talk you through the 11 things you must know as a property owner when it comes to condemnation and eminent domain.
1. Eminent domain is the government’s right to take over private property
Eminent domain is the right of the government (or its agent) to expropriate private property for public use.
However, the Fifth Amendment provides this power to the government only if just compensation is provided in return to the property owner.
We’ll talk more about what that means and how that is calculated in #3.
2. Condemnation is a legal process
Condemnation is the legal process by which private property is acquired for a public purpose.
The right to condemn represents the power of eminent domain.
So, while these two terms are not synonymous, they are heavily related when discussing these matters in real estate.
Eminent domain is the right to seize the property, and condemnation is the legal process used to actually seize it.
Now, condemnation sounds scary when you think of the government just swooping in and taking your entire parcel of land.
Yet, that isn’t entirely the case.
Condemnation can be in many forms.
The government can take your entire property, a portion of it, or only take it temporarily
In a partial taking, the entire parcel isn’t necessary for the public project.
For example, your county may need to condemn a 10-foot strip in your front yard in order to widen a street.
In a partial taking, you’ll be looking at significantly less compensation, but you likely could retain most of your property.
Condemnation can also be temporary.
A state may need to use your property only while construction is occurring for a park or prison nearby.
Once it’s created, they will construct a road that won’t affect your property long-term.
3. Just compensation means fair market value for a parcel of property
The Fifth Amendment includes the Just Compensation Clause that states, “nor shall private property be taken for public use without just compensation.”
Yet, what exactly does “just compensation” mean?
How does a public authority decide how much your land is worth before taking it over?
As a general rule, just compensation is considered fair market value, although there are additional standards and exceptions.
In order to determine fair market value, the government will send out an appraiser to determine the value of the land.
It is often in the best interest of the property owner to consult an attorney once they have received the government’s offer.
The attorney can help determine if the offer is fair.
While most property owners receive fair offers, it is still best to check with an attorney.
Please note that fair market value should generally be determined based on the property’s highest and best use.
4. Consider all of these questions when thinking about just compensation
Eminent domain can be exhausting.
As a landowner, you may not know what your rights are or if your land has value beyond what you’re offered.
Here are some considerations you can discuss with an experienced eminent domain lawyer when valuing your land.
How do you maximize value?
Under what circumstances are business damages recoverable?
Can an owner be compensated for damages caused during the construction of the public project?
In a partial taking of a property, when is compensation for damages to the remaining property legally allowed?
In a partial taking of a property, when can the government claim a setoff of damages by arguing the public property will increase the value of the remaining property?
What role does contamination play in eminent domain? Is it ever excluded altogether?
How are fixtures treated in conversations of condemnation?
Is your property designed for special use? Should that be taken into consideration when it is valued?
What is the time frame for receiving compensation in hand?
How can you ensure you receive maximum compensation and benefits for relocation?
If you have tenants, how will they obtain compensation throughout this process?
These are just some of the questions you should consider, and depending on what you use your land for, you may have many more.
Don’t go with the first offer you’re given.
Take these questions to an eminent domain lawyer so you can make sure you’re receiving the best offer possible if your land will be seized (either fully or partially).
5. Condemnation should not be confused with the declaration of a property as uninhabitable
Condemnation is the process by which private property is taken for public use.
However, you’ve probably heard the word condemnation used more frequently when it comes to condemned houses.
These are properties that the government has deemed unsafe or uninhabitable in some way.
Sometimes properties are condemned when they are unsafe or uninhabitable so that the plot of land can be repurposed for public use.
The government will market them as condemned, destroy the existing structures, and perform modifications on the private property before acquiring it.
This is the origin of this phrase.
That said, “condemnation” does not always mean that a property is uninhabitable.
It merely means that it is undergoing the legal process, and it is being acquired for a public purpose.
6. You’ll receive a condemnation notice before your property is seized
Eminent domain grants power to the government and government agencies to seize private property for public use.
However, efore this happens you will receive a condemnation notice that your property may be needed for a public project.
This means that the federal, state, or local government authority is seeking to acquire your property or has some other interest in your property.
7. Just because the government has rights doesn’t mean you do not
It may feel like the government has a trump card with eminent domain.
However, the power of eminent domain is not absolute.
As a property owner, you also have a number of important legal rights.
With the threat of a condemnation case looming, you’ll want to speak with an experienced eminent domain lawyer as soon as possible.
It is fairly common to challenge the compensation amount.
You also often have the following rights, depending on the state:
Negotiation: The public authority is usually required to engage in good faith negotiations around compensation before going to court to seize your property.
Dispute: Landowners are often entitled to their day in court if they are unhappy with the compensation amount.
Remember, just because the government has the right of eminent domain, it doesn’t mean that they automatically win.
The right eminent domain lawyer can help you identify the grounds on which you can challenge the government’s claim.
Even if you end up having to give up your property, you can receive just compensation and guidance navigating this process.
Expense reimbursements: Landowners can often recover some relocation costs, attorneys’ fees, appraisal, or survey fees, and other expenses that result from the eminent domain process.
Don’t let this process come out of your own pocket.
State laws can sometimes protect you.
8. Look at the Fifth Amendment to know your rights
The Fifth Amendment provides an overview of private property owners’ rights.
Public purpose: The government can only condemn private property for a public purpose.
What defines a “public purpose” is not entirely clear; however, there are some guidelines that give you an idea of why the government can and cannot take public property.
Just compensation: The condemning authority must pay just compensation for the property taken using the power of eminent domain.
So, if your property is seized for a government purpose, you’ll receive a financial payment in exchange for the loss of your property.
After receiving this offer, be sure to check with an experienced eminent domain lawyer to ensure you’ve received a sufficient amount for the property.
Due process: All citizens are entitled to due process of law before the government can take their property.
Landowners must receive notice before their property is seized from them under eminent domain.
Any eminent domain notice must provide reasonable information and provide landowners (or other parties) adequate time/opportunity to respond.
9. You can (attempt to) stop a condemnation project if it is not for “legitimate public use”
In order for the government to seize your land under eminent domain, the land must be for “legitimate public use.”
If you’re looking to stop a condemnation project, your best bet is to investigate if the project is valid under these grounds.
If it isn’t, you may have a chance to have it stopped or prevented.
If unjust condemnation occurred, then you can either:
Allow the government to proceed with the project and obtain just compensation through a post-deprivation hearing
Seek an injunction that would terminate the project. In this case, the government would also pay for any losses resulting from the project
Before you go down this path, it’s worth noting that resisting condemnation proceedings can be challenging.
As the property owner, you’ll be personally responsible for proving how your personal losses outweigh the benefits that would be gained by society using this space for public use.
This can be a hard sell.
Think through it carefully with an experienced lawyer for the best results!
10. The eminent domain process (condemnation) differs from state to state
If threatened with condemnation, you’ll have to investigate what the process looks like at a local level.
However, there are some basic steps that are somewhat similar across the country.
The government, agency, or company will be known as the “condemnor”
The condemnor, with the power of eminent domain, identifies a public project or use.
The condemnor will notify any and all potentially affected property owners that their property is needed for legitimate public use
The condemnor may make an offer to buy the property first
If the negotiations are not successful, then the condemnor will file to acquire the property using eminent domain in exchange for just compensation
The state-to-state guidelines will determine how just compensation is calculated
11. There is a second type of taking of property called inverse condemnation
Inverse condemnation occurs when the government acquires or appropriates private property without following eminent domain procedures and paying just compensation.
If this occurs, then the landowner has the right to file an inverse condemnation claim against the government.
This would allow the landowner to recover just compensation for the property taken.
It’s important to note that inverse condemnation isn’t limited to the permanent physical taking of property.
If the government temporarily takes your property or even occupies your property in a way that derives you of economical use, then you may be able to obtain just compensation.
Inverse condemnation also applies to regulatory taking.
If the government’s regulation burdens private property to the point where it is unusable, then this can be referred to as “regulatory taking” and may qualify you for just compensation.
If the government acquires property without following the proper eminent domain procedure, the affected property owner can bring an inverse condemnation lawsuit against the government entity that has taken his or her property.
The name “inverse” condemnation comes from the fact that it is brought by the property owner (not by the government or government agency).
In this case, you (as the property owner) would carry the burden of proof that property rights were acquired without just compensation.
It is also recommended that you consult an experienced attorney in this instance as well.
At any point, you may be faced with condemnation of your property when the government chooses to exercise its power of eminent domain.
This is frustrating for many property owners, but understanding the process and the rights you retain can help you navigate the situation.
When you receive a notice about potential condemnation, reach out to a local eminent domain lawyer who can lend you their expertise.
Even if they can’t “save” your property, they can help ensure you get just compensation for what you’re giving up.
Did we miss anything? Let us know in the comments.
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Disclaimer: we are not lawyers, accountants or financial advisors and the information in this article is for informational purposes only. This article is based on our own research and experience and we do our best to keep it accurate and up-to-date, but it may contain errors. Please be sure to consult a legal or financial professional before making any investment decisions.
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