Eminent Domain: Rights of Property Owners
Eminent domain allows federal, state or local governments and agencies to legally seize privately held property for the legitimate benefit and use of the public. The process used to exercise this right is called condemnation, and it involves specific steps that must be followed before a property can ultimately be taken.
First and foremost, the rights of the property owner must be preserved throughout the process. But many owners are unaware of the established protections afforded to them. These protections, which stem from the Fifth and Fourteenth Amendments to the U.S. Constitution, can be described by an experienced attorney who can assist property owners and guide them through the eminent domain process.
How Eminent Domain Works
There are two primary objectives associated with eminent domain: Owners must be paid a fair market value for their property, and the governmental body must have a legitimate public use in mind for the property.
The first step is the payment of fair compensation to the property owner. To begin the process, the government agency must first make an offer. If the property owner refuses the offer, the agency may then exercise the power of eminent domain. The agency can cite any of the following reasons in order to initiate a forced sale after an owner has refused to sell:
- The property owner refuses all offers at any price
- Both parties dispute the fair market value of the property
- Defects in the record title prevent a landowner from conveying a clear title
- One or more owners cannot be located or identified
Beyond the above requirements, the agency must also have authority to exercise eminent domain. And it must have sufficient funds to purchase the property at its fair market value. It must file the appropriate action in a court that has jurisdiction, and it cannot seize privately owned property without a favorable ruling. The property owner is entitled to contest the action.
Eminent Domain and the U.S. Supreme Court
In 1875, the U.S. Supreme Court ruled that privately owned land could be seized by the government or a governmental agency for:
- Forts, armories and arsenals
- Naval yards
- Post offices and courthouses
- Custom houses
Subsequent Supreme Court rulings have expanded the list due to changes in the economic climate, societal needs and overall growth opportunities. In 2005, the Supreme Court ruled that a city’s economic revitalization development plan was an allowed public use of the power of eminent domain. This decision furthered the reach of government in seizing properties for a broader array of purposes. Eminent domain has been applied to such initiatives as economic development, the construction of new parks and the enhancement of targeted commercial development.
The federal Declaration of Taking Act also states that the government must give adequate notice of its intent to seize a property. It must provide:
- A statement with regard to the authority used to take the land
- A clear description of the property
- A statement detailing the interest in the land for public use
- A plan showing how the land taken will be incorporated
- An estimate of compensation
What if property is taken and the property owner has not received sufficient notice or the steps required in the formal condemnation process were not followed? Then a property owner may be able to initiate an action, called inverse condemnation, to challenge the taking of the property.
If the property owner is successful, it typically results in compensation. But in some cases, the court may find that the property is not in the public’s best interest and may order an injunction to stop the taking.
The information on this page is meant to provide a general overview of the law. The laws in your state and/or city may deviate significantly from those described here. If you have specific questions related to your situation you should speak with a local attorney.
Related Topics In This Section
- Real Estate
- 1031 Exchange
- Buying a Home
- Loan Workout
- Mortgage Refinancing
- Real Estate Condemnation
- Landlord Tenant Law