What Is Eminent Domain?

Eminent domain gives municipalities, state governments, the federal government, an authorized corporation, or an authorized individual the power to take private property for public use. In situations involving eminent domain, which is legal under the Fifth Amendment of the US Constitution, the owner of the private property being taken must be provided with just compensation for their loss. In addition to traditional eminent domain cases, there are situations (usually involving environmental issues) where instead of a government entity, corporation, or outside individual pursuing eminent domain, the private property owner does.

How Does Eminent Domain Work?

According to the eminent domain definition, the process involves “the right of a government or its agent to expropriate private property for public use, with payment of compensation.”

Before a government, authorized corporation, or authorized individual can apply eminent domain to take private property for public use, certain requirements must be met:

  • The property being taken must be private property – Private property can include land, stocks, leases, fixtures, and other items. For instance, the rifle that was used to assassinate President Kennedy was the subject of an eminent domain hearing.
  • The property must be taken physically or taken due to its value being lowered – Property does not always have to be taken away from a property owner to be considered the target of eminent domain. If the property’s value is lowered for some reason, such as the installation of a new highway turning land from beachfront property to inland property, then the property owner may be able to secure just compensation for the loss of property value he or she suffered.
  • The property must be taken to benefit the public and not an individual or private organization – This can mean that the property will be used by the public, such as a new highway, or it could mean that the property will benefit the public, like if the area is used for a new private sports stadium that will revitalize a metropolitan area.
  • The property owner must receive just compensation for the property damaged or seized – This means that the compensation that the property owner receives for the property is fair for both the property owner and the public.

Who Benefits from Eminent Domain?

Depending on the situation, both property owners and those taking property through eminent domain can benefit. If a government, individual, or corporation takes property for fair compensation through eminent domain, they can greatly benefit. It may enable them to install a public rail system to ease traffic congestion in a busy metropolitan area or to build an auto plant that will provide several jobs to people in the community.

If a property owner is the one who initiates eminent domain, which is referred to as inverse condemnation, then they may benefit from receiving compensation for property damage that they otherwise would not have received. For example, if the government pollutes a stream that feeds a farmer’s land, eminent domain may provide the farmer with a way to recoup his or her financial losses.

Who Are the Victims of Eminent Domain?

While property owners can be the beneficiaries of eminent domain on occasion, often property owners suffer due to it. For instance, if the land taken from a property owner is their home and/or has been passed down through their family for generations, to them, there may not be such a thing as “just compensation” for their loss.

However, there are instances where the public can suffer because of eminent domain. For example, if a new highway could revitalize a dying municipality but the necessary property is unable to be seized through eminent domain, then people throughout the community could suffer financially and possibly even have to leave the area as a result.

Eminent Domain Process

The laws of each state differ regarding the steps that a government or authorized corporation need to take to apply eminent domain. In general, the first step that will be taken is that the government entity or company interested in acquiring private property will contact the property’s owner to inform him or her of their interest in the property. After that, if the government agency chooses to pursue their interest the property, they will schedule an appraisal of the property. Following the completion of the appraisal, the property owner will be provided with a copy of the appraisal and an offer will be made to buy the property.

After the offer is made, a public hearing will be held. At the hearing, the government or authorized corporation will have to prove why the property must be taken. This will usually involve the government or company showing:

  • Why taking the property is necessary to complete a public project
  • That taking the property would be the most beneficial way for the project to be completed
  • That they made the property owner an offer.

Upon the completion of the public hearing, if the government agency successfully showed that taking the property is necessary for the public project to move forward, the case will be filed in court. Once it is filed in court, the government will make a deposit with the court for the appraised value of the property.

However, before the case is heard in court, both the government and the property owner will again have the property appraised to ensure that the property’s fair market value is determined. The two appraisals will be exchanged, and the sides will have the opportunity to settle. If a settlement cannot be reached, a jury will decide fair market value. The government agency will have to pay the property owner for the property within 30 days of the settlement agreement or the jury’s decision.

Can I Fight Eminent Domain?

If a property owner chooses to challenge eminent domain, he or she will have to prove that the use of their property for the intended project is unnecessary or that the intended project does not benefit the public.

A property owner can also contest the amount of compensation offered for the property.

How Talking to a Real Estate Attorney About Eminent Domain Can Help

If you are a property owner dealing with issues involving eminent domain, you should discuss your situation with a real estate attorney. You may be able to speak with a real estate lawyer about your case for free. Whether you are pursuing eminent domain to recoup property value losses, challenging an eminent domain claim, or just seeking to get the best deal possible for your property, an attorney familiar with real estate law will be able to examine your situation, explain your options, and answer your questions.