Oregon Eminent Domain Law

A Guide to Oregon Eminent Domain Law

Few issues evoke such strong opposition as the taking of private land through eminent domain for a public use. When it comes to eminent domain, the government is playing in their arena; they do this every day. They know what the rules are, they know how the rules affect them and they know how the rules affect property owners. If the government is taking your land, make sure that you become informed so that you know what you can and cannot do and what to look for in a Oregon eminent domain attorney.

Your initial question might be, can I stop the process? In most cases, you won’t be able to prevent the government from acquiring your land, but you are entitled to just compensation under eminent domain law. Learn more about eminent domain generally and what you’re entitled to receive, or continue reading to learn about the Oregon eminent domain process, your rights as a property owner and hiring an Oregon eminent domain attorney.

We are an eminent domain law firm that only represents property owners, never the government or condemning authority. We are licensed to practice law in Oregon and we have experience representing owners throughout the state. We help property owners who are impacted by highway and transit projects, pipeline projects, natural gas storage facility projects, redevelopment projects, acquisitions for municipal buildings, inverse condemnation, regulatory takings and much more. Did you know that most eminent domain attorneys work on a contingent fee basis? With this fee structure, the attorney assumes the risk of earning a fee. Also, the government or condemning authority is required to pay your attorney’s fees in eminent domain cases if certain criteria are met.

Oregon Eminent Domain Process

In the state of Oregon, the eminent domain process can only be stopped if the proposed taking does not meet the requirements for public purpose or public necessity. If you have determined that the proposed taking does meet these requirements, then you should learn more about the Oregon eminent domain process.

Remember, even if the government has the right to condemn your property, they cannot dictate the price they are willing to pay; compensation is determined by the highest and best use laws for your property.

We’ve provided the following information regarding the Oregon eminent domain process for takings that meet the criteria for public use and necessity.  These takings usually occur for highway expansion projects such as road widening projects and intersection reconstruction projects.  In some cases, the takings occur for utility projects such as sewer expansion projects.

Extended explanations for each item in the flow chart are included below.  Please be aware that the flow chart and explanations are simply an overview of the Oregon eminent domain process and should not be used as a tool to take matters into your own hands.

1. Government Announces Project and Properties Affected Typically during project development, the condemning authority (whether that agency is the Department of Transportation, or a City/County Planning Division, etc.) will hold public meetings to inform the public of the upcoming project and how this project will affect private property.
   
2. Property Owner Hires Attorney
   Frequently an owner will only receive full compensation by allowing condemnation to occur. In condemnation an owner can show that the rules for highest and best use will produce a higher price than the amount offered by the government.  Property owners should hire an eminent domain attorney to assist with their additional damages claim.
   
3. Government Inspects and Values Property
   Before the condemning authority makes an offer, they must determine the value of the property taken and  damages do the remainder parcel (severance damages). This valuation is determined by an appraiser and reviewed by the condemning authority prior to them issuing their offer.  These appraisers often have long-standing relationships with the government, and their appraisals may contain errors such as using incorrect comparables, or they may not value your property at its “highest and best use”.  Frequently, they ignore severance issues or dramatically understate their significance and impact.
   
   The government or condemnor may enter onto the property to conduct the survey and appraisal.  The condemnor must provide actual or conspicuous written notice of an intent to enter for this purpose (O.R.S. § 35.220).  The notice must be at least 15 days, and the owner and any representative may be present during inspection (O.R.S. § 35.346(3)).
   
4. Government Makes Offer to Property Owner
   The government or condemning authority must first try to acquire the property through negotiations (O.R.S. § 35.235(1)).  A condemnor must provide a written offer and associated appraisal at least 40 days before the commencement of a condemnation action. O.R.S. § 35.346(1).  If the condemner determines that the amount of just compensation due is less than $20,000, the condemner, in lieu of a written appraisal, may provide to the owner or other person having an interest in the property a written explanation of the bases and method by which the condemner arrived at the specific valuation of the property (O.R.S. § 35.346(2)).
   
5. Attorney Evaluates Offer
   After the condemning authority makes an offer, the property owner’s attorney will evaluate the appraisal and offer to determine if it represents just compensation. If the attorney finds errors in the condemning authority’s valuation, then they will determine how best to proceed. The owner has no less than 40 days from the date they receive the written offer, accompanied by the appraisal or written explanation, to accept or reject the offer. If the owner rejects the government’s offer and obtains a separate appraisal, the owner shall provide the condemner with a copy of the owner’s appraisal no less than 60 days prior to trial or arbitration (O.R.S. § 35.346(4)).
   
6. Determine Negotiation Strategy
   The negotiation phase initiates after the offer is made and before condemnation occurs.  During this time, parties can reach a settlement agreement before the government initiates the eminent domain process.
   
7. Select Appraiser to Determine True Property Value
   During the negotiation phase, a second appraisal must be done on the property in order to show the full complement of damages, including those not addressed by the condemning authority’s appraiser.  This appraisal is submitted as evidence supporting the property owner’s claim for additional compensation and can be used as evidence during trial. It is highly recommended to consult with an eminent domain attorney prior to obtaining a second appraisal. Any and all appraisals done on the property to determine the owner’s opinion of value must be submitted to the condemning authority.  If you hire an appraiser on your own who is not experienced in valuing property in eminent domain cases, this appraiser could overlook damages and ultimately ruin your claim. An eminent domain attorney will thoroughly review the initial appraisal and determine its strengths and weaknesses.  The attorney will then indicate a selection for the most qualified appraiser to value the property in question. Visit our Resources page, under hiring an appraiser to read an example of why hiring the wrong appraiser can hurt your claim. Make sure you consult with an eminent domain attorney before hiring an appraiser on your own.
   
8. Property Owner Settles with Government
   If the property owner is satisfied with the offer, they can sign the final settlement agreement, therefore waiving their right to pursue additional damages.
   
9. Deed is Transferred
   Once the final settlement papers are executed by the property owner, the deed is transferred to the condemning authority.  It is at this time that ownership is transferred from the property owner to the condemning authority.
   
10. Owner’s Case is Done
    The owner is paid in full, the condemning authority owns the property, and the owner’s case is completely done. The property owner can no longer file a claim to challenge the taking or to receive additional compensation.
    
11. Property Owner Does Not Accept Offer
    If, after negotiations, the property owner is not satisfied with the amount offered by the condemning authority, they can refuse the offer and allow condemnation to occur.
    
12. Government Initiates Eminent Domain Proceeding
    If no settlement agreement is reached, the condemnor may file an action to condemn in the circuit court of the county in which the property is located (O.R.S. § 35.245).
    
13. Government Makes Deposit, Takes Possession
    Condemnor, whether state agency or private company, may deposit anticipated compensation and take control of the property.  This deposit is compulsory for public agencies and within the court’s discretion for private condemnors.  O.R.S. §§ 35.265, 35.275.    The court may make funds available to owner and the owner may withdraw such funds without waiving rights of appeal (O.R.S. § 35.285).
    
14. Owner Files Answer Seeking Additional Compensation
    Owner will file an answer to seek additional compensation and include the alleged true value of the property and damages in an answer (O.R.S. § 35.295)
    
15. Jury Trial on Compensation

A trial is by jury is conducted to determine just compensation for the property owner.  O.R.S. § 35.305, 35.325.

If owner wishes to appeal the jury finding, the condemnor may pay a deposit and take possession.  A withdraw of this deposit voids the right to appeal.  O.R.S. §§ 35.355, 35.365.

Binding arbitration is only available if the property is estimated at less than $20,000.  O.R.S. § 35.346(6).  If the total value claimed is between $20,000 and $50,000, non-binding arbitration is available.

The eminent domain process in the state of Oregon is complicated, and if you are undergoing eminent domain and want to make sure you are justly compensated, you should speak to an eminent domain attorney. Speaking to an eminent domain attorney regarding your case will keep you informed of your rights, the eminent domain process, and whether or not your attorney’s fees will be paid for by the state of Oregon.

Oregon Property Rights

The eminent domain abuse dialogue often centers on policy issues involving the right to take property for economic development and blight. Since the landmark case of Kelo v. City of New London in 2005, many states have taken measures to help curb eminent domain abuse. Some states were very successful at passing meaningful reform, and other states failed to pass any legislation at all. Most states fall in the middle by passing legislation that looks good on paper but does little to level the playing field between property owners and the government.

Since the decision by the United States Supreme Court in Kelo v. City of New London many states across the country have taken measures to help protect the rights of private ownership.  The controversial Kelo decision held that a local government can take the private property of one person and give it to another private entity.  While the Court’s ruling was seen by many as a serious blow to citizen’s constitutionally protected rights of private property ownership, the decision prompted a number of states to initiate legislative reform to help curb eminent domain abuse.

The Castle Coalition has released a report, grading each of the states based on their efforts to protect private property owners and their rights based on changes in their respective state laws.  The Castle Coalition is the Institute for Justice’s nationwide grassroots property rights activism project that teaches home and small business owners how to protect themselves and stand up to abuse by governments and developers who seek to use eminent domain to take private property for their own gain.  The Castle Coalition gave Oregon a B+ for property rights.

Here is what the Castle Coalition says:

“Oregon is another example of a state in which citizens were so dedicated to making eminent domain reform a reality that they took the matter into their own hands. The Oregon State Legislature did not have a session scheduled for 2006, so a group of passionate citizens organized to get a statute on the ballot that would limit the government’s authority to use eminent domain for private benefit.”

“Measure 39, the statute proposed in the initiative, forbids government parties to condemn private property used as a residence, business establishment, farm, or forest operation “if at the time of the condemnation the public body intends to convey fee title to all or a portion of the real property, or a lesser interest than fee title, to another private party.” Given the opportunity to vote on it, Oregonians approved the new law by nearly two-to-one. The new statute is particularly important because its language prohibits private-to-private transfers (although the use of “intends” makes that prohibition incomplete since it is always hard for a citizen to prove government intent). The initiative states that a blight designation can be applied only to individual properties that constitute a danger to the health and safety of the community.”

“Even though Oregon now has valuable statutory limits on the use of eminent domain, they can still be reversed by future acts of the State Legislature. In order to ensure that these reforms are made as strong as possible, this state needs to adopt a constitutional amendment that will safeguard property rights by enshrining a narrow definition of “public use” in its organic law.”

Castle Coalition

Hiring an Oregon Eminent Domain Attorney

The most blatant form of eminent domain abuse occurs when the government or condemning authority makes a ‘low ball’ offer. This scenario invariably requires the property owner to hire an attorney to obtain just compensation. Fortunately, the vast majority of eminent domain attorneys work on a contingent fee basis, meaning they charge a percentage of the additional money they obtain for the property owner. Also, Oregon has passed legislation requiring the condemning authority to pay your attorneys fees and costs in eminent domain cases if certain criteria are met.

If a trial is held or arbitration conducted for the fixing of the amount of compensation to be awarded to the defendant owner or party having an interest in the property being condemned, the court or arbitrator shall award the defendant costs and disbursements including reasonable attorney fees and reasonable expenses as defined in ORS 35.335 (Effect of condemner’s abandonment of action) (2) in the following cases, and no other:

(a)If the amount of just compensation assessed by the verdict in the trial exceeds the highest written offer in settlement submitted by condemner before the filing of the action to those defendants appearing in the action pursuant to subsection (1) of this section; or

(b)If the court finds that the first written offer made by condemner to defendant in settlement before the filing of the action did not constitute a good faith offer of an amount reasonably believed by condemner to be just compensation.(O.R.S 35.346(7).

The motivation to negotiate honestly, and even avoid low ball offers to begin with, increases significantly if the condemning authority can be liable for the attorney’s fees incurred by the property owner. This statute helps level the playing field between the government and property owners, especially when small claimants can hire an attorney to help them obtain just compensation.

Very few attorneys can claim expertise in the area of eminent domain law. If you’re affected by eminent domain, you should obtain a consultation from an Oregon eminent domain attorney so that you know and understand your rights before taking any action. Remember, the government is like any buyer, they will want to purchase your property as cheaply as possible, and their appraisers may neglect to consider damages that can lead to a larger amount of just compensation. 

Oregon Attorney Fee Recovery in Eminent Domain

The US Supreme Court has consistently held in condemnation cases that the government’s obligation is to “put the owner in as good a position pecuniary as if the use of their property had not been taken” Monongahela Nav. Co. v United States, 148 U.S. 312 (1893); Phelps v. United States, 274 U.S. 341 (1927); Olson v. United States, 292 U.S. 296 (1934).   That is, property owners should receive fair and just compensation and not be at any financial loss resulting from the government’s action to seize their property.  We believe that in order for this to be possible, property owners should be entitled to quality legal representation at the expense of the condemning authority provided their offer of compensation doesn’t adequately compensate the property owner under the rules of eminent domain law.  Even a property owner who successfully pursues such a claim is not entirely happy when part of that just compensation (often one third) has to be paid to the attorney.

Over the next several years, a significant amount of private property will be acquired through eminent domain by the state of Oregon for numerous large transportation improvement projects.  Fortunately for property owners, statues exist in Oregon that direct the government to pay property owner’s attorneys fees in eminent domain cases when  the amount of just compensation assessed by the verdict in trial exceed the highest written offer in settlement submitted by the condemnor before the filing of the action (O.R.S. § 35.346(7)).

Although the statute seems relatively straightforward, we’ll interpret its meaning and application through the use of an example.   In Oregon, the offer of compromise is a formal written offer that serves as a marker on the timeline of litigation for the calculation of recoverable attorney fees.  The first offer of compromise is usually made to property owners after the government files for condemnation.  Additionally, each subsequent offer establishes a time period for which attorney fees are potentially recoverable.

Let’s say for example the first offer of compromise is for $100,000.  If the owner receives more than $100,000, attorney fees are recoverable at least up until the time of that offer.  If the government only makes one offer of compromise for $100,000 before trial, then all fees would be recoverable so long as the judgment at trial exceeds $100,000.

However, condemning authorities in Oregon typically make multiple offers of compromise because settling a case will minimize their costs.  In fact, the government can make offers of compromise until 10 days prior to trial.

Let’s examine a similar situation where the first offer of compromise is $100,000, and then a subsequent offer of $125,000 is made before trial.  Now there are two relevant time periods and amounts.  If the owners receive an amount in excess of $100,000 but lower than $125,000 at trial, then attorney fees would only be available up to the time of the second offer, i.e. from the beginning of the lawsuit until the time of the $125,000 offer.  If, however, the owners received a judgment in excess of $125,000, then all attorney fees would be recoverable.  Each offer thus has its own set of criteria applicable to a specific time period.

Although the Oregon eminent domain attorney fee recovery statute only directs the government to pay fees when the case proceeds to trial, a good eminent domain lawyer in Oregon will use this to their advantage during negotiations.  Attorney’s fees can be negotiated into a settlement agreement, which makes an Oregon property owner financially ‘whole’ without having to proceed to trial.  If however the negotiations do not lead to a satisfactory level of compensation, or the government refuses to pay fees during negotiation, then the option still exists to take the case to trial.  We’ve said it before and we’ll say it again, as part of your strategy considerations in eminent domain, you’ll want to make sure you hire an eminent domain attorney with trial experience.  For example, our attorneys  prepare all of our cases in anticipation of going to trial which gives us maximum leverage against the condemning authority during negotiations.  If negotiations fail, then the case is ready to proceed to trial.

Summary

The state of Oregon has seen significant reform against eminent domain abuse. If the language concerning the public use definition was slightly tightened, and the state made the initiative into a constitutional amendment, citizens would be fully protected against eminent domain abuse.