Utah's Eminent Domain Laws and Property Rigths

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 Powers?

  In Utah, the state, political subdivisions, and other non-governmental entities can exercise the power of eminent domain for approved public uses under appropriate circumstances. Utah Code Ann., § 78B-6-501 identifies many of the common public uses for which the power of eminent domain can be exercised. There are other special public uses suitable for eminent domain identified in various other sections of the Utah Code. Private property can be taken for a public use only if the use is approved and the intended condemner has authority to exercise eminent domain power for that use. Consequently, it is important to confirm at the outset of any case whether the intended condemner can use eminent domain power for the applicable public use.

• What Are the Legal Pre-Requisites for Exercising the Power?

  Under Utah law, property can only be condemned for a lawful public use or purpose; the taking is necessary for the use; construction and use of the property sought to be condemned will commence within a reasonable time; and the taking has been approved by the governing body of the political subdivision, if one is involved. Utah Code Ann., 78B-6-504. A list of statutorily approved uses is set forth by statute. Utah Code Ann., 78B-6-501. If the right to condemn exists, just compensation must be paid for the property being taking. Utah law also requires the condemning authority to make every reasonable effort to acquire the property expeditiously by negotiation before filing an eminent domain action. Utah Code Ann., 78B-6-505.


• What Limiations or Defenses Exist?

  Once the decision to proceed with a public project is made and the acquisition of property necessary for the project is determined by an authorized governmental entity, the grounds to challenge the condemnation are limited under Utah law. Defenses can, however, be raised as to whether a proper public use exists for the condemnation; the taking is necessary for that use; construction of the project will begin within a reasonable time; and the taking has been properly approved. Defenses can also be raised if the prerequisites to commencing a condemnation action have not been satisfied; whether a good faith acquisition offer has been made based on an approved appraisal; and whether certain statutorily required information has been provided to the property owner. But deference is generally given to the condemning authority in its decision to condemn. For instance, the court will not review and substitute its opinion as to whether there is a need to take the property or whether the public project is feasible, unless it can be shown that the decision is so oppressive, arbitrary or unreasonable as to suggest bad faith.
  

• What Constitutes a Public Purpose?

  Like the U.S. Constitution, Utah’s Constitution limits the use of eminent domain to a “public use,” a term which over time has come to include public purpose as well. Typical uses that satisfy a public use or purpose can include roads, parks, schools, other public buildings, or other projects or undertakings that serve a public good or need. By statute, many approved public uses have been specified. Utah Code Ann., 78B-6-501.

• How is Just Compensation Determined?

  Under the Utah Constitution, the property owner is entitled to receive “just compensation” for property taken by eminent domain. The definition of just compensation under Utah law includes the fair market value of the property being taken from the landowner and any diminution in value to the landowner’s remaining property.
  
  In Utah, just compensation is determined by agreement of the parties, or if they cannot agree, by a judicial determination. Jury trials are permitted in eminent domain cases in Utah. The Utah Property Rights Ombudsman’s Office provides free mediation services to property owners to help the parties reach an agreement on the amount of just compensation. The Ombudsman’s office may also require, at the property owner’s request, that a second appraisal be obtained at no cost to the property owner to provide a second opinion on the property valuation.

• How is Fair Market Value Defined?

  Utah law defines “fair market value” in a condemnation case as the “Fair market value of the property is the highest price that a prudent and willing buyer would pay to a prudent and willing seller in an open market assuming that: (1) there is no pressure on either one to buy or sell; and (2) the buyer and the seller know all of the facts about the property.” Excluded from fair market value is any impact on value caused by the project for which the property is being taken. By statute, however, in determining the market value of the property before the taking and the market value of the property after the taking, the trier of fact may consider everything a willing buyer and a willing seller would consider in determining the market value of the property after the taking. Assessed value for property tax purposes may not be considered unless the court determines the property tax assessment constitutes an admission by a party opponent.
  
  Utah law defines “fair market value” in a condemnation case as the “Fair market value of the property is the highest price that a prudent and willing buyer would pay to a prudent and willing seller in an open market assuming that: (1) there is no pressure on either one to buy or sell; and (2) the buyer and the seller know all of the facts about the property.” Excluded from fair market value is any impact on value caused by the project for which the property is being taken. By statute, however, in determining the market value of the property before the taking and the market value of the property after the taking, the trier of fact may consider everything a willing buyer and a willing seller would consider in determining the market value of the property after the taking. Assessed value for property tax purposes may not be considered unless the court determines the property tax assessment constitutes an admission by a party opponent testify to the value of the property owned and being taken. Appraisers will often use different valuation approaches to determine the value of the property, the most common being the comparable sales, income and cost approaches.

• What About Recovering Damages to Remaining Property?

  Under Utah law just compensation includes any diminution in value (i.e. damages) to an owner’s remaining property. Thus, when a condemning authority takes a portion of a landowner's property, it is obligated to pay compensation not only for the part taken, but also for any loss in value to the property not being taken. Unfortunately, in Utah a landowner is not entitled to claim damages for business loss caused by the public project. The theory is that the business itself can be relocated. If relocation of the business is necessary relocation assistance if typically required, including moving and relocation expenses, and other assistance.

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

  Unlike the law in many other states, attorney’s fees, expert witness fees, and other litigation expenses and costs incurred by an owner in defending a condemnation action are generally not recoverable. There are some exceptions to this rule, however. “Litigation Expenses” including court costs, expert witness fees and reasonable attorney’s fees, may be recoverable up to $50,000, ($100,000 for multiple defendants), if a property owner makes a written settlement offer in the condemnation litigation and the ultimate just compensation award exceeds the amount of the property owner’s offer. However, if the condemner makes a written settlement offer and the ultimate just compensation award is less than the settlement offer, the condemner may be entitled to recover its litigation costs up to $50,000. Utah Code Ann., 78B-6-509. Attorney’s fees may also be recoverable under certain circumstances if the government takes property for a public use without filing a condemnation action or paying just compensation or if the condemning authority abandons the condemnation proceeding. Utah Code Ann., 78B-6-517.

• Can the Government Take Possession of the Landowner's Property Before Final Compensation is Paid?

  When a condemning authority seeks to take possession of property prior to a final determination of just compensation it is referred to under Utah Law as “immediate occupancy.” Immediate Occupancy involves the immediate taking of possession of private property for public use so construction of the public improvement can commence while the parties negotiate or litigate the amount of just compensation. The condemner must file a condemnation complaint and a motion for immediate occupancy to obtain immediate occupancy. To prevail in obtaining immediate occupancy, the condemner must have authority to condemn; satisfy all statutory pre-requisites for commencing a condemnation action; and demonstrate that the equities balance in favor of permitting immediate occupancy. The condemner must also deposit into court the condemner’s estimated amount of just compensation, for the benefit of the property owner until the actual amount of compensation can be established. However, by removing the money on deposit with the court, the property owner waives all defenses to the condemnation action except the claim to greater compensation. Utah Code Ann., 78B-6-510.