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What is eminent domain?

What is eminent domain?

Can the government build a park — or a pipeline — where your home is sitting?

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Updated: 08/09/2023

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You may have heard the term "eminent domain" in the news or from your neighbors. It refers to the government's power to take private property for public use, such as building a park, road, school or pipeline.

Wondering what your options are if the government wants to take your property through eminent domain? Here’s what you need to know.

Key insights

Eminent domain grants governments the power to take private property for public use.
Examples of public use might include a public park, utility, school or road.
The Fifth Amendment to the U.S. Constitution requires the government to pay “just compensation” when it takes private property for public use.
In most cases, it’s not possible to refuse an eminent domain action. However, there are ways to increase compensation.

Understanding eminent domain in real estate

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

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

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.
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.

Requirements

Thankfully, 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:

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

Types of takings

Four primary types of takings can occur:

Permanent taking is when the government takes your property permanently. It’s the most common type of 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 temporarily for a construction project.
Complete taking is when the government takes your entire property.
Partial taking is when the government takes only a portion of your property.

In any case, 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.

» MORE: What does a real estate attorney do?

What is just compensation?

Just compensation is the amount of money the owner receives when they relinquish their rights to the property. It’s a significant part of any eminent domain claim.

Robert Bird, a professor of business law at the University of Connecticut, says that there isn’t an exact formula for just compensation; 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,” he said. “When property owners challenge takings, it is often over the issues of just compensation.”

An appraisal is conducted to determine a property’s value. 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.

It [just compensation] 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.”

— Robert Bird, business law professor, University of Connecticut

In the event that 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 what are known as “severance damages.”

Examples of eminent domain in real estate

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 with Biersdorf & Associates, a Minneapolis firm that represents property owners impacted by eminent domain.

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

Here are two recent cases of eminent domain that have made the news:

Iowa CO2 pipeline

Pipeline projects are common triggers for eminent domain cases. In Iowa, a proposed liquid carbon dioxide pipeline may affect private land and require eminent domain claims.

According to the Des Moines Register and Agri-Pulse, Summit Carbon Solutions is spearheading a project that would build about 680 miles of pipeline in Iowa alone. The company is requesting that the state government let it use eminent domain to acquire 1,035 parcels of land for the construction of the pipeline if needed. It’s unclear how many landowners will object to the use of their property for the pipeline.

Local farmers who may be impacted by the pipeline have cited concerns about losing parts of their land, reduced crop yields due to the disturbance of topsoil and other potential consequences of hazardous materials running under the ground.

Georgia rock quarry railroad

In Sparta, Georgia, Sandersville Railroad Company is attempting to use eminent domain to take private property from a group of landowners to build a railroad that goes straight to its privately held rock quarry.

The property owners are fighting back, arguing that the private company’s use of eminent domain is unconstitutional and unjustified. The Institute for Justice, a public interest law firm, is representing the owners in the case and is working to protect their property rights.

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:

A 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.
An inverse condemnation proceeding: In this process, you file a lawsuit against the government, claiming 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.

The amount of compensation considered “just” can be disputed. For example, a Virginia family recently disputed an eminent domain claim to a part of its family property where there are plans for a natural gas pipeline. A jury awarded the family compensation of about $523,000 for the land — significantly more than the pipeline company believed it was worth.

FAQ

What constitutes “public use” in eminent domain?

“Public use” is a broad term in eminent domain. It can include taking property for a park, an airport, a railroad, a port or another project that serves the general public.

Public use now also includes economic development projects. In 2005, the U.S. Supreme Court decided in Kelo v. City of New London that economic benefits for a community qualify as public use.

Will my legal costs be covered in an eminent domain case?

The laws for legal costs in eminent domain cases vary from state to state. In some cases, if the property owner can show in court that the property is not being taken for public use — or if the government entity abandons the project during a case — the court might award the owner court costs and legal fees.

In cases where the owner is only arguing for just compensation and not against the government’s right to take their property, courts in many states will allow the recovery of court costs. It’s important to understand each state’s laws as they pertain to recovering legal costs in eminent domain cases.

Can you stop eminent domain?

Completely stopping an eminent domain case is improbable; successfully negotiating for just compensation is more likely. For example, in 2006, a jury determined that a Georgia hospital had to pay about four times the original appraised value of a duplex it wished to condemn for a public use project, according to NBC News. The home was originally appraised at $50,000 to $60,000, and the jury decided that the hospital had to pay $200,000 for the property in addition to giving its tenant $51,000 to assist with her move.

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.

Article sources

ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include: