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Arizona's Eminent Domain Laws and Property Rights

Property Rights in the State of Arizona

Like many states, Arizona’s eminent domain laws are a combination of Constitutional provisions, state statutes and case law. To understand the process and procedures fully it is important for any property owner being subjected to the eminent domain power to consult with an attorney experienced in the area of eminent domain and property takings.

Meet OCA's Arizona Attorney

Anthony H. Misseldine

Anthony H. Misseldine

Anthony Misselldine is a shareholder with JacksonWhite. He represents private property owners, tenants, and developers in all aspects of eminent domain litigation and takings. Anthony’s practice also includes business and commercial litigation, land use litigation, representation of financial institutions (loan enforcement, market valuation proceedings, and deficiency claims), and other complex commercial lawsuits. In the area of eminent domain, Anthony only represents clients with interests in the real property.

A Summary of Arizona’s Eminent Domain Laws

The following responses are intended to provide general information about eminent domain laws in the featured state. Such information does not constitute legal advice. Anyone interested in learning more about eminent domain law and the impact it may have on a given set of facts should consult with an OCA attorney or another attorney experienced in handling eminent domain cases.

  • Who Can Exercise Eminent Domain Laws?

    The State, as the sovereign, may exercise the power of eminent domain in Arizona under Article 2, Section 17. The State may also delegate the power of eminent domain to governmental entities which then act as agents of the State. Examples of when other government entities act as agents of the State include the following:

    • A person seeking to acquire property for public uses authorized by A.R.S. §12- 1115(C). A.R.S. §12-1201 and §12-1202.

    • A public service corporation which is condemning property for a use designated by A.R.S. §12-1111.

    • Incorporated cities and towns. A.R.S. §9-276.

    • The State Parks Board. A.R.S. §41-511.05, 41-511.06, 41-502.

    • A city or town for utility services. A.R.S. §9-516.

    • The Arizona Power Authority for development and utilization of power (A.R.S. §30-123).

    • An agricultural improvement district. A.R.S. §48-2340, 48-2341.

    • A county flood control district for flood control purposes. A.R.S. §48-3603, 48-3621.

    • A city or town for public right-of-ways. A.R.S. §48-502, 48-503, 48-504, 48-508.

    • A city, town, or county for airport purposes. A.R.S. §28-8416.

    • A city, town, or county on behalf of a regional transportation authority for implementation of a regional transportation plan. A.R.S. §48-5123, 48-5313.

    • A county or a board of supervisors for local or federal-county highways. A.R.S. §28-6701, 28-6704.

    • A county for toll roads. A.R.S. §28-6805.

    • The Director of The Department of Transportation. A.R.S. §28-368 and 28-7091-7103

    • A city, town or county for public housing projects. A.R.S. §36-1403, 36-1407

    • A state public body or federal agency for a public works project. A.R.S. §12-1141-1162

  • What Are the Legal Requirements for Exercising the Power?

    The Arizona Constitution (Article 2 Section 17) authorizes the exercise of eminent domain authority if the taking is for a public use and the property owner is paid just compensation. Arizona’s Constitution and state statutory provisions regarding eminent domain are not limited by the Fifth Amendment of the United States Constitution. Rather, the State’s laws are required to be consistent with the Fifth Amendment.

  • What Limitations or Defenses Exist?

    A. Statutory Prerequisites.

    A.R.S. §§12-1111 through 12-1129 establish the general procedures for a direct condemnation in Arizona. These procedures include: at least twenty days prior to filing a condemnation complaint (lawsuit) the condemning authority must deliver to the property owner a written offer to purchase A.R.S. §12-1116(1); an estimate of the just compensation to be paid (§12-1116(1)); and one or more appraisals supporting the offered compensation (§12-1116(2)). Additionally, a survey of the property and an accurate legal description of the property to be taken must be completed. (A.R.S. §12-1115).

    B. Filing an Eminent Domain Complaint (A.R.S §12-1117).

    The complaint in a condemnation action must set forth:

    • The name of the person asserting the public use for which the property is sought, as plaintiff.

    • The names of all owners and claimants of the property, if known, or a statement that they are unknown, as defendants.

    • A statement of the authority to condemn.

    • If a right-of-way is sought, the location and general route, accompanied with a map of the route.

    • A description of each piece of land sought to be taken, and whether the land includes the whole or only a part of an entire parcel or tract.

    • A property owner and any person claiming an interest in the property identified in the complaint has a right to defend their interest. (A.R.S §12-1120).

    C. Notice & Service (A.R.S §12-1119). The clerk of the court must issue a summons containing:
    • The names of the parties.

    • The general description of the property.

    • A statement of the public use for which it is sought.

    • A reference to the complaint for description of the respective parcels.

    • Notice to defendants to appear and show reasons why the property described should not be condemned as requested for in the complaint. An owner cannot be deprived of land without the statutorily prescribed and constitutionally required notice. The failure to properly serve a copy of the summons and complaint upon a property owner renders the judgment void.

    D. Venue & Jurisdiction (A.R.S §12-1116(A)). Actions for condemnation must be brought “as other civil action in the superior court of the county in which the property is located.”

    E. Immediate Possession (A.R.S. §§12-1116(E) - (O)).

    The condemning entity may apply for an order granting immediate possession of the property sought to be condemned – the right to possess the property prior to entry of a final judgment. The only issues to be determined at a hearing on immediate possession are necessity and probable damages. A.R.S. §12-1116(H). An order of immediate possession cannot be appealed until after a final judgment is entered. Immediate possession gives the condemning entity the right of legal possession, but not title to the property. Title does not pass until a final judgment is entered, the just compensation has been paid, and a final order of condemnation is issued by the court. A.R.S. §12-1126.

    F. Burdens of Proof.

    The condemning entity has the burden of proof as to the following issues:

    • To show that it has taken the steps necessary to authorize the initiation of the condemnation action. Flecha Caida Water Co. v. City of Tucson, 4 Ariz. App. 331, 420 P.2d 198 (1966).

    • To prove special benefits. Pima County v. Gonzales, 177 Ariz. 566, 869 P.2d 183 ((App.1998).

    • On the issue of project influence. City of Phoenix v. Claus, 177 Ariz. 566, 869 P.2d 1219 (App. 1994).

    The property owner or party claiming an interest in the property being taken has the burden of proof as to the following issues:

    a: The amount of just compensation and severance damages. State ex rel. Ordway v. Buchanan, 154 Ariz. 159, 741 P.2d 292 (1987).

    b: Whether the condemning authority has properly balanced the greatest public good versus the least private injury under A.R.S. 12-115. Queen Creek Summit, L.L.C. v. Davis, 219 Ariz. 576, 201 P.3d 537 (App. 2008).

  • What Constitutes a Public Purpose?

    Arizona Revised Statute §12-1112 provides that the taking of private property must be for a public use and that the taking is necessary to such public use. Arizona case law has generally interpreted public use to include:

    • Use of the land by the public;

    • Promoting the public welfare; or

    • Promoting the purposes of a governmental entity.



    In Bailey v. City of Mesa, 206 Ariz. 224, 230, 76 P.3d 898, 904 (App. 2003) the Arizona appellate court held that the “...anticipated public benefits must substantially outweigh” any character of private use of the land taken.

  • How is Just Compensation Determined?

    The trial court or jury is required to determine the value of the part taken, severance damages, and special benefits. The compensation must be determined for each source of damage separately. The right to a jury trial may be waived.

    A property owner in Arizona must be paid “just compensation” for the taking or damaging of property by the government. Article 2, Section 17. “Just compensation” is the equivalent in money that places the property owner in as good a position financially as he would have been if his property had not been taken. State ex rel. Miller v. Filler, 168 Ariz. 147, 812 P.2d 388 (1991).

    Arizona recognizes that the standard of “fair dealing” must be met in any eminent domain action. The trial court must use the measure of damages which is most appropriate under the circumstances to compensate the property owner. State ex. rel. Herman v. Southern Pacific Co., 8 Ariz. App. 238, 445 P.2d 186 (1969).

  • How Is Fair Market Value Defined?

    If there is an ascertainable market value, it should be given great consideration. However, if the character of the property prevents an ascertainable market value, the cost to cure, replacement cost minus depreciation, capitalized cost of inconvenience, or other fair manners of compensation shall be given consideration.

    a. Market Value

    The court has the responsibility to bring the values of the real world marketplace into the courtroom. City of Phoenix v. Wilson, 200 Ariz. 2, 21 P.3d 388 (2001).

    The market value of the property is determined by what a willing buyer would pay and a willing seller would accept. Defnet Land & Inv. Co v. State ex rel. Herman, 103 Ariz. 388, 442 P.2d 835 (1968).

    Market value is defined as “...the most probable price in terms of cash in United States dollars or comparable market financial arrangements that the property would bring if exposed for sale in the open market, with reasonable time allowed which to find a purchaser, buying with knowledge of all uses and purposes to which it was adapted and for which it was capable.” A.R.S. §12-1122. State v. McDonald, 88 Ariz. 1, 352 P.2d 343 (1960).

    Market value must also consider the reasonable probability of a future event, such as rezoning. City of Tucson v. Estate of DeConcini, 132 Ariz. 416, 646 P.2d 301(App. 1982).

    b. When Market Value is Difficult to Ascertain.

    When an owner is able to prove there is market value is difficult to determine, the court must use the measure of damages most appropriate under the circumstances. Selective Resources v. Superior Court, 145 Ariz. 151, 700 P.2d 849 (App. 1984).

    In many cases, the value of the part taken and severance damages in condemnation proceedings can only be estimated.

    Arizona courts recognize at least three traditional appraisal approaches:

    1. The market data or comparable sales approach
    2. The income approach
    3. The cost approach

    City of Tucson v. Robles, 189 Ariz. 82, 505 P.2d 253 (1975). The traditional methods do not all need be applied, but may be used in combination. Other methods of valuation may also be appropriate or necessary.

  • What About Recovering Damages to Remaining Property?

    Compensation of a partial taking of property is the value of the land taken plus severance damages. Severance is defined as “the damages that will accrue to the portion not sought to be condemned by reason of its severance from the portion sought to be condemned, and the construction of the improvement in the manner proposed by the plaintiff.” A.R.S. §12-1122(A)(2).

    Any factor affecting the after condition value of the remaining property resulting from the taking may be considered when determining severance damages. Selective Resources v. Superior Court, 145 Ariz. 151, 700 P.2d 849 (App. 1984).

  • Is the Landowner Entitled to Recover Reasonable Attorney Fees? Expert Fees? Litigation Costs?

    The general rule in Arizona is that a property owner is not entitled to recover attorneys’ fees and costs. But, an owner may recover litigation expenses in a successful inverse condemnation action. A.R.S. §12-1128.

Arizona

Jackson White, P.C.
40 North Center Street Suite 200
Mesa, Arizona 85201
Tel: (480) 464-1111 | Fax: (480) 464-5692
Amisseldine@jacksonwhitelaw.com | www.jacksonwhitelaw.com

For more than 25 years, Anthony Misseldine has focused his practice on the representation of Arizona property owners in eminent domain, inverse condemnation, real estate valuation, ad valorem tax appeals, and land use & zoning proceedings. He also represents individuals and businesses in complex commercial lawsuits. Tony’s clients include individual landowners, private companies and national corporations throughout the State of Arizona. He has received the peer review rating of AV Preeminent® from Martindale-Hubbell, the leading lawyer rating and referral service.

Significant Eminent Domain and Property Rights Representations

  • Represented property owner and secured lender in condemnation actions filed by the City of Santa Clarita, California, for the construction of a regional highway. Initial offer: $558,100. Result: jury verdict of $12.3 million in compensation plus an award of attorneys’ fees and costs of $7.0 million.
  • Represented a Phoenix property owner in a condemnation by the City. Initial offer: $74,000. Result: settlement over $3.8 million in compensation to the property owner.
  • Represented a landowner in a condemnation action with the Arizona Department of Transportation (ADOT) in which the restricted access to a highway after construction. ADOT made no offer of compensation for the loss of access. Result: settlement of more than $500,000 in compensation to the landowner.
  • Represented a commercial property owner in an eminent domain taking that eliminated all front parking. The loss of parking due to condemnation was a significant factor in the national restaurant tenant terminating the lease. Result: negotiated compensation substantially in excess of the government’s initial offer.
  • Represented the owner of a mini-storage facility in a condemnation to widen the public road. The taking reduced the length of the driveway resulting in a serious safety risk to moving vans and trucks entering the facility, which blocked traffic until the security gates opened. Result: negotiated compensation to redesign the driveway, buildings and entrance, in addition to a high value for the land taken.
  • Represented the owner of a veterinary clinic in eminent domain proceedings which required the acquisition of most of the parking spaces in front of the clinic and precluded deliveries from large commercial vehicles. Result: successfully resolved claims for compensation in excess of the government’ s offer.
  • Represented a homeowner in a taking for a power substation. Result: negotiated the relocation of the substation to the back of the property to minimize visual and aesthetic impacts, in addition to compensation.
  • Successfully represented the owner of a large tract of agricultural land in a condemnation to acquire a 300 foot easement for high-voltage towers and power lines. The property’s highest and best use was for future multi-use development. Result: the landowner received additional compensation for significant damages to the remaining property.

Professional Affiliations

  • J. Reuben Clark Law Society
  • Chandler Chamber of Commerce, Public Policy Committee
  • Land Title Association of Arizona
  • Arizona Rock Products Association
  • Arizona Cattlemen’s Association
  • Former Member, State Bar of Arizona Professionalism Committee

Education

  • Brigham Young University, Bachelors of Arts, 1984
  • Northwestern School of Law at Lewis and Clark College, Juris Doctorate, cum laude, 1987

Bar Admissions and Memberships

  • Arizona
  • Supreme Court of Arizona
  • U.S. District Court for the District of Arizona
  • U.S. Court of Appeals, Ninth Circuit
  • State Bar of Arizona

Honors and Awards

  • AV® Preeminent™ Peer Review Rated by Martindale-Hubbell®

For more than 25 years, Anthony Misseldine has focused his practice on the representation of Arizona property owners in eminent domain, inverse condemnation, real estate valuation, ad valorem tax appeals, and land use & zoning proceedings. He also represents individuals and businesses in complex commercial lawsuits. Tony’s clients include individual landowners, private companies and national corporations throughout the State of Arizona. He has received the peer review rating of AV Preeminent® from Martindale-Hubbell, the leading lawyer rating and referral service.

Significant Eminent Domain and Property Rights Representations

  • Represented property owner and secured lender in condemnation actions filed by the City of Santa Clarita, California, for the construction of a regional highway. Initial offer: $558,100. Result: jury verdict of $12.3 million in compensation plus an award of attorneys’ fees and costs of $7.0 million.
  • Represented a Phoenix property owner in a condemnation by the City. Initial offer: $74,000. Result: settlement over $3.8 million in compensation to the property owner.
  • Represented a landowner in a condemnation action with the Arizona Department of Transportation (ADOT) in which the restricted access to a highway after construction. ADOT made no offer of compensation for the loss of access. Result: settlement of more than $500,000 in compensation to the landowner.
  • Represented a commercial property owner in an eminent domain taking that eliminated all front parking. The loss of parking due to condemnation was a significant factor in the national restaurant tenant terminating the lease. Result: negotiated compensation substantially in excess of the government’s initial offer.
  • Represented the owner of a mini-storage facility in a condemnation to widen the public road. The taking reduced the length of the driveway resulting in a serious safety risk to moving vans and trucks entering the facility, which blocked traffic until the security gates opened. Result: negotiated compensation to redesign the driveway, buildings and entrance, in addition to a high value for the land taken.
  • Represented the owner of a veterinary clinic in eminent domain proceedings which required the acquisition of most of the parking spaces in front of the clinic and precluded deliveries from large commercial vehicles. Result: successfully resolved claims for compensation in excess of the government’ s offer.
  • Represented a homeowner in a taking for a power substation. Result: negotiated the relocation of the substation to the back of the property to minimize visual and aesthetic impacts, in addition to compensation.
  • Successfully represented the owner of a large tract of agricultural land in a condemnation to acquire a 300 foot easement for high-voltage towers and power lines. The property’s highest and best use was for future multi-use development. Result: the landowner received additional compensation for significant damages to the remaining property.

Professional Affiliations

  • J. Reuben Clark Law Society
  • Chandler Chamber of Commerce, Public Policy Committee
  • Land Title Association of Arizona
  • Arizona Rock Products Association
  • Arizona Cattlemen’s Association
  • Former Member, State Bar of Arizona Professionalism Committee
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