What Is Eminent Domain?

Understanding eminent domain

Eminent domain allows the government to seize privately owned property for certain public projects. This includes building roads, railways, bridges, schools or other public infrastructure. The government can only invoke eminent domain if it can prove that taking the property is necessary for a public purpose.

Some circumstances where the government can invoke eminent domain include:

• Public infrastructure projects: The government can use eminent domain to acquire the land needed to build roads, bridges, schools and other public infrastructure projects.
• Urban renewal projects: Governments use eminent domain to acquire blighted areas deemed to be a public nuisance.
• Conservation projects: Eminent domain allows governments to acquire land for conservation purposes, such as protecting wildlife habitats or preserving natural resources.

How eminent domain works

The government can’t just seize any property it wants. There are certain requirements the government must meet to claim eminent domain, some of which include:

1. The seized property must be private property.
2. The authority taking the property must be a government entity or a private company working under the authority of the government.
3. The property must be a genuine necessity for the public use project.
4. The owner of the property must get just compensation.

After the government has pinpointed your property for seizure under eminent domain, here’s how the process typically works:

Notification

The government must notify you of its intent to take your property and make an offer to purchase it. This notice must include the reasons for the taking and the amount of compensation that the government is offering.

Agree or challenge

If you agree to the government’s offer, you’re compensated for the fair market value of the property at the time of the taking. If you do not agree to the government's offer, you have the right to challenge the taking in court.

Types of eminent domain takings

There are four primary types of takings that can occur:

• Permanent taking: Permanent taking is when the government takes your property permanently. It’s the most common type of taking.
• Temporary taking: Temporary taking is when the government takes your property for a limited period of time, such as when part of your land gets used briefly for a construction project.
• Complete taking: Complete taking is when the government takes your entire property.
• Partial taking: Partial taking is when the government takes only a portion of your property.

Regardless of which type of taking occurs, the government must provide just compensation for the taking. If you believe that the government isn’t following the proper procedures or that the compensation isn’t fair, you have the right to challenge the taking in court.

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What is just compensation?

Just compensation is the amount of money the owner receives when they relinquish their rights to a property. It’s a significant part of any eminent domain claim, and it’s required by the Fifth Amendment. To determine just compensation, a property’s value is assessed through a home appraisal.

Robert Bird, a professor of business law at the University of Connecticut, said that there isn’t an exact formula for just compensation and that it’s negotiated between the government and the property owner.

“It generally means that the property owner should receive sufficient compensation to put the owner in the same position as if the taking had not occurred,” Bird said. “When property owners challenge takings, it is often over the issues of just compensation.”

There are more cases of just compensation litigation for farms, commercial businesses or industrial properties than for single-family homes, which have a higher number of comparable properties and less contentious appraisal values.

If a parcel of a larger plot of land is taken and this decreases the value of the land the owner is allowed to keep, just compensation might also include severance damages.

How often is eminent domain used?

Governments enact eminent domain to seize property more frequently than you might expect.

“It is so constant that, if you surveyed all 50 states, you would see its power invoked on a daily basis,” said Ryan Simatic, an attorney that specializes in eminent domain with von Briesen & Roper, a Minneapolis-based firm.

“Our firm has represented property owners who have had their property taken for roads, schools, parks, public parking lots and so forth,” Simatic said. “But it can also be for utilities. Some states even allow the use of eminent domain for economic development, like reviving ‘blighted’ areas.”

How to protect yourself as a homeowner

As long as the government has a legitimate public use for the property, overturning an eminent domain claim is unlikely. But there are two main ways for a landowner to increase the payout they receive:

Condemnation proceeding

This is a legal process where the government offers you compensation for your property, but you challenge the proposed compensation amount in court. It usually involves hiring an appraiser to assess the value of your property and present this information to the court. If you can prove that the compensation offered is too low, you may be able to negotiate a higher payout. You can also argue that the taking is not for public use or that the government did not follow the proper procedures.

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Inverse condemnation proceeding

In this process, you file a lawsuit against the government and claim that it’s taken your property without a formal eminent domain proceeding or just compensation. If you win the lawsuit, the government must pay you fair compensation for your property. Note that the amount of compensation considered just can be disputed in court.

Bottom line

If the government needs land to develop something that benefits the community, it can force the current owners to sell it through eminent domain. In exchange, the government must provide fair compensation to the owners. If the owners disagree with the compensation offered or the government's decision to take their property, they may have the right to challenge the government in court.

If you’re in an eminent domain situation, always seek legal advice. Hiring a lawyer who specializes in eminent domain cases can help you navigate this complex process and protect your property rights.