Eminent Domain FAQ

The State can negotiate to buy your property just like any other buyer might. If you and the State can not agree a price, though, the State can proceed with eminent domain. Eminent domain is simply the legal process that has been established to allow governments to gain ownership of private property. Eminent domain formally begins when the State starts a lawsuit to take your property. These lawsuits do not affect your credit rating or allege that you have done anything wrong.

An eminent domain appraiser should meet the following standards: a. Thorough understanding of eminent domain valuation rules; b. Experience with property type being acquired; c. Ability to write a comprehensive and thoroughly reasoned appraisal report; and, d. Ability and experience as a witness in court.  Learn more about the importance of selecting an appraiser in eminent domain law.

The eminent domain process can be stopped if the proposed taking does not meet the requirements for public necessity or public purpose. If these tests are met, the government cannot be stopped from taking your property, but the government cannot dictate the price it will pay, either.  Learn more about challenging the right to take in eminent domain.

Usually, yes. For most properties the existence of parking is critical for the ability to use the property as it was intended. When parking is lost due to eminent domain, the remaining property may have great difficulty supporting the businesses that remain there. This depresses the value of the remainder beyond the loss of value of the parking area. This is an example of severance damages that the government frequently chooses to ignore or dramatically understate in eminent domain cases.

Yes, if it is reasonable that someone would buy property and change the zoning based upon a more valuable use than current zoning allows. Then the value of the property under eminent domain rules must be based upon the more valuable use.

None. By forcing condemnation, the property owner is simply exercising all the constitutional and statutory rights that the law allows. It is the only way for the owner to receive the full value for his/her property if the government refuses to voluntarily pay that amount.

When an owner forces condemnation, the government must pay its good faith value to the owner (usually the offer) at the beginning of the condemnation.

Important considerations when hiring an attorney for an eminent domain matter are: a. Handles eminent domain cases on a regular basis rather than occasionally; b. Knows how to evaluate appraisers and appraisal reports; c. Will not be compromised by local politics or other potential work representing the government; and, d. Will not hesitate to take a case to trial and knows how to develop a trial strategy.  Learn more about selecting an eminent domain attorney.

No. The government is no different from any other buyer of real estate. It wants to buy property as cheaply as it can. If an owner agrees to sell too cheaply, it’s because the government does not have to look out for a property owner’s interests. Like any real estate buyer, the government wants to pay the lowest price.

No. Fair market value may vary dramatically depending upon the highest and best use that is selected for the property. The government will frequently, if not usually, choose a lesser highest and best use for a property it seeks to acquire through eminent domain. This justifies the government offering to pay a low “fair” market value for land it seeks to acquire. Property owners should insure the correct highest and best use is applied to their property. This may often be different from the actual use employed by the current owner.

Absolutely. These circumstances are examples of severance that require compensation beyond the value of the property actually taken through eminent domain. Owners should beware, though, because, while the government may recognize these items as severance, it will frequently understate the level of damages resulting from severance.

Yes it can. Access to property is an integral part of the rights of property ownership. When access is adversely changed in a significant way or lost because of eminent domain, the owner’s ability to use the property is restricted. This restriction requires payment from the government.

There are generally three access changes caused by eminent domain that require compensation: a. Direct access before the acquisition is changed to indirect, roundabout access after the taking; b. The taking results in total loss of access; or, c. Access after the taking is limited or restricted to certain uses. Beware that the government will often acknowledge the first two access changes but will understate the required compensation. The government usually won’t acknowledge that the third situation should result in compensation. In the infrequent situations that it is acknowledged, the damages are usually understated.

If the disadvantage to an owner’s business also affects the value of the real estate, compensation must be paid. Otherwise, if the damages are to the business only, compensation is generally not awarded. There are exceptions, though, but they must be analyzed on a case-by-case basis. If a business is forced to move because of an acquisition, the business is always entitled to relocation benefits.

Very definitely. Two examples best describe this possibility. First, if the taking causes the remaining property to become non-conforming with applicable zoning codes, the owner may not recognize the impact until he/she sells the remaining property or attempts to improve the property with an addition. In the second example, the government may restrict access for the existing use only. When the owner attempts to sell the property later or develop if for a higher, more valuable use, that attempt will be denied.

No. The government can only forcibly acquire property through eminent domain that is needed for its project. Adjoining property that is landlocked can be retained by the owner, but the government must pay for its loss of value. Frequently this is all or nearly all of the property’s full value, however, the government usually offers only a small fraction of the full value.

If your property could reasonably be developed in the foreseeable future to a more valuable use than a single residence or agricultural land, then additional compensation must be paid under eminent domain rules.

If the loss of visibility or view is associated with a physical taking, compensation can be justified. If the same loss of view or visibility is not accompanied by a physical taking, generally compensation is not warranted. This is a new area of compensation that will be refined by future eminent domain rulings.

If the division of the property caused by eminent domain results in greater inefficiency for using the remaining property, then compensation must be paid to the owner.

This issue has not yet received widespread attention from the courts. The government seems to uniformly make offers based upon substantial discounts for contamination. Some courts are rejecting those discounts in certain situations. Simatic Biersdorf has obtained beneficial rulings in both New York and Minnesota that contamination should not be considered to reduce an owner’s claim.