June 30th, 2016 — In Articles
Dictionary of Key Terms
Below are general definitions of key terms that are often used in eminent domain and other taking cases. Please note that the precise definition of any of the following terms may differ depending upon the state or jurisdiction applicable to the relevant matter.
The right of a condemning authority to withdraw or dismiss a condemnation action after it has been filed, usually because the condemnor has determined that it does not want to pay the final just compensation award. In many states, condemning authorities have an automatic right to abandon a condemnation action, meaning they do not have to seek the approval of the court to do so. Other states may impose specific retrictions or conditions on the right of abandonment, including even that the condemnor must reimburse the landowner for various out of pocket expenses and attorney fees. Still other states will not allow a condemning entity to abandon a condemnation action under specific circumstances, such as when a statute precludes abandonment, or the landowner can show that it reasonably relied to its detriment on the condemnation case going forward, or the condemnor has taken immediate possession of the landowner's property. To learn more about the concept of abandonment read OCA's Featured Article entitled, "Can The Government Abandon An Eminent Domain Taking?"
Answer or Responsive Pleading
A written pleading filed by the landowner responding to the Petition or Complaint of the condemning authority in which the landowner answers each allegation by either denying, admitting or admitting in part and denying in part. The Answer generally also identifies the landowner’s legal defenses to the taking.
In situations where a public project may bestow benefits on a landowner’s remaining property, the condemning authority may seek to quantify such benefits and then use them to reduce the total amount of just compensation to be paid. In most jurisdictions benefits must be deemed “specific” in nature, rather than “general” in order to reduce just compensation. While benefits are typically used to reduce damages to remaining property, in some jurisdictions benefits may also be used to reduce the compensation paid for the property being taken.
Blight is a legal term used to determine whether a neighborhood or commercial area qualifies for redevelopment through urban renewal. Often it is used to describe physical conditions of structures and buildings that are deteriorated, dilapidated, or decayed. Unfortunately, because there is no uniform definition of blight, and because it is often open to subjective interpretation, and finally because statutes characterizing what is and what is not blight differ from state to state— there is significant room for mischief and even abuse in how blight determinations are made. As examples of how subjective and even vague blight determinations can be, here are a list of some of the commonly considered factors that can provide the foundation for a blight finding: (1) defective or inadequate street layouts (2) broken windows (3) cracked sidewalks (4) faulty lot designs (5) title defects (6) lack of parks or open spaces (7) lack of storm drainage or other utility facilities etc. For more information about this subject, read "Can My Property Be Taken for Urban Renewal Purposes and Transferred to a Private Redeveloper Even If It’s Not Blighted?" within the Featured Article section of OCA's website.
Burden of Proof
A term that defines the duty placed upon a party to prove or disprove by appropriate evidence all disputed facts in a case necessary to prove a claim. In a traditonal eminent domain case most disputed facts relate to the amount of just compensation to be paid for the taking. Depending upon the jurisdiction where the case is tried, the burden of proof on the issue of compensation may be on either the landowner or the condemning authority. Another issue where the burden of proof may be important relates to whether the property is being taken for a proper public use or purpose. In some states, the condemning authority bears the burden of proof on this issue. The standard of proof refers to the amount of evidence the party needs to provide in order for the judge or jury to reach a particular determination. In most eminent domain cases, the burden of persuasion that applies is called “a preponderance of the evidence.”
Business Losses or Business Damages
Compensation claims relating to the negative impact that an eminent domain taking may have on a particular business or business operation. Although most states currently do not allow a landowner to recover business damages or losses as part of the just compensation that must be paid for a taking, a few states do provide for such recovery. To find out more about each state's position on business impact claims talk with an OCA lawyer or view the state laws under Locate an OCA Lawyer.
Commission or Board
Some jurisdictions allow the amount of just compensation to be determined by a body of individuals sometimes called a Commission or a Board. Commissioners are generally appointed by the court. In most jurisdictions, some type of investigation or voir dire process is undertaken to ensure that the Commissioners are independent, impartial and unbiased as it concerns the parties and issues in the case.
A valuation methodology generally used by appraisers in determining fair market value that involves considering recent selling prices of properties similar to the subject property in terms of a number of factors, e.g. location, use, size, zoning, geography, etc. The comparable sales approach is sometimes called the market approach. To learn more about comparable sales in an eminent domain case, read "A Landowner's Guide to Understanding the Comparable Sales Approach" under Featured Articles.
A provision in a lease that generally describes the legal rights and obligations of the parties (typically the landlord and tenant) should the leased property (or any portion of the leased property) become the subject of an eminent domain taking or proceeding. There is no form Condemnation Clause that applies in every situation and it is incumbent upon the parties to a lease to fashion a clause that is specific to their unique circumstances and consistent with the eminent domain law and practice within the jurisdiction at issue. For more on Condemnation Clauses and leases read the OCA Featured Article entitled "What's In Your Condemnation Clause? Landlord and Tenant Issues That Often Arise When Leased Interests are Impacted By Eminent Domain Takings."
Damages or Severance Damages
Damages which may result when only part of an owner's property is condemned. The purpose of damages is to compensate an owner for any loss in value of the remaining property due to the acquisition. Damages are also sometimes referred to as 'severance' damages or 'damages to the remainder.' In many condemnation cases damages to the remainder can exceed the value of the property being taken. When there are wide disparities between the condemning authority's valuation position and that of the landowner's, oftentimes the disparity is attributed to a difference of opinon on the existence, degree and amount of damages caused by the acquisition. To learn more about the concept of damages, read the Featured Article entitled, "The Payment of Damages As Part of Just Compensation."
Date of Value
Just compensation is to be determined as of a specific date, which is generally referred to as the “date of value.” The condemnation statues in each jurisdiction will typically address how the “date of value” is to be determined or established.
The legal challenges that a landowner may mount against the condemning authority's condemnation action. In an eminent domain case typical landowner 'defenses' include assertions that: the condemning entity lacks the legal authority to condemn the property, the condemnation is not for a proper public use or purpose, there is a lack of necessity for the taking, and/or the condemnor has not negotiated in good faith for the property being taken prior to filing the condemnation action. The ultimate success and viability of these are other defenses that the landowner may raise against the condemnation action depends largely on the specific facts of the case and the law applicable in the jurisdiction where the case is being tried.
The taking of sworn, out-of-court oral testimony of a witness that may be reduced to a written transcript for later use in court or for discovery purposes. In a condemnation case depositions are typically taken of the landowner, the appraisers, and other expert witnesses. For more information about a property owner's deposition, read "The Landowner's Deposition in An Eminent Domain Case" in the Featured Articles section.
A pre-trial procedure in a condemnation case in which each party, through the rules of civil procedure, seeks to obtain evidence from the other party by means of depositions or various pleadings, such as interrogatories, requests for production of documents, and requests for admissions.
A legal interest in property that gives the beneficiary the right to use the property for a specific use or purpose. The scope and nature of the easement is generally defined by its written terms. While the easement holder is entitled to use the property in accordance with the terms of the easement, legal title to the land itself remains with the owner. Easements can be written to be exclusive, non-exclusive, temporary and permanent. Depending upon the type of easement, the location of the easement, and the terms defining its' usuage, easements can either have minimal impacts on the property they encumber or extensive impacts. See the separate definition of a Temporary Easement herein.
“Eminent domain” (also referred to as “condemnation” or “appropriation” in some states) is the government’s power to take private property subject to payment of just compensation. Federal, state and local government agencies can exercise the power of eminent domain. In certain circumstances, government agencies can grant private companies the authority to exercise eminent domain as well.
Fair Market Value
The price at which the property would sell or change hands on the open market between a willing buyer and a willing seller, neither being under any compulsion or duty to buy or to sell. For more information about this term refer to OCA Featured Article, "What Does Fair Market Value Mean in Determining Just Compensation?"
A property rights term used to describe the maximum ownership interest in real property that is allowed under the law. The fee interest is also sometimes called the fee simple interest.
The Fifth Amendment to the U.S. Constitution creates a number of rights relevant to both criminal and civil legal proceedings. However, most relevant to takings law is the portion of the amendment which reads: "No person shall be...deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation." These words, which are echoed in many state constitutions, provide citizens with certain fundamental rights when it comes to their property and property rights and ensures that private property cannot be taken without due process of law, without a proper public use being met, and without the payment of just compensation.
Good Faith Offer
The valuation offer made to the property owner by the condemning authority as part of the negotiations that occur prior to the filing of the condemnation action. Most state statutes require that the condemnor's offer and the negotiations which follow meet a good faith standard. One way condemnors may seek to show that the offer is made in good faith is by having it supported by an independent appraisal. To learn more about negotiations in an eminent domain case, read "Negotiating With the Condemning Entity From a Position of Strength and Knowledge" in the Featured Article under Landowner Resources.
Highest and Best Use
In most jurisdictions landowners are not limited to a value based on the current use of their property in establishing just compensation. Instead, the property is to be valued considering the most advantageous use, which is often referred to as the “highest and best use” of the property. To meet the standard of “highest and best use” the use must be: (1) physically possible; (2) legally permissible; (3) financially feasible; and (4) maximally productive. See also a "Landowner's Guide to Understanding the Concept of Highest and Best Use" in Featured Articles under Landowner Resources.
Immediate Possession a/k/a Quick Take
While the government typically must pay just compensation before condemning private property, in certain circumstances state laws authorize a “quick-take” procedure which allows agencies to take private property prior to the final determination of just compensation. In most cases, the taking authority must pay its estimate of just compensation to the owner upon acquiring the property. The parties will then follow specific state procedures to determine the final award of compensation. This may include a bench trial before a judge or a hearing before impartial commissioners who will determine the amount of compensation. Or, in some jurisdictions, a jury will be empaneled to hear evidence and determine the amount of compensation due to the owner.
Instructions or Jury Instructions
Statements of the law that are given by the court to a jury at the conclusion of the valuation trial, but before closing arguments, to advise the jury of the law that applies to the facts of the case, and the manner in which they should conduct their deliberations. Most states have adopted specific instructions that are to be given in eminent domain cases.
Government agencies must follow certain procedures in order to exercise the power of eminent domain. When they fail to follow these procedures and take private property without payment of just compensation, property owners can seek to enforce their right to just compensation under the Fifth Amendment through an action for “inverse condemnation.” To learn more about the concept of inverse condemnation read OCA's Featured article entitled "Inverse Condemnation-A Short Primer."
Under the U.S. Constitution and state laws, in order to condemn private property, the government must pay the property owner “just compensation.” However, determining what amount of compensation is “just” isn’t always easy, and property owners will often need to take legal action to enforce their right to just compensation.
A determination (usually made by an appraiser) of what constitutes the extent of the owner's property that should be the focus of the appraisal assignment for purposes of determining the value of the property being taken and damages to any remaining property. Assessing what constitutes the "larger parcel" usually involves an analysis of several factors, the most common of which are: unity of ownership, unity of use, and physical contiguity. The "larger" parcel test can sometimes create wide discrepancies in valuation conclusions if the appraisers disagree on what the "larger parcel" should be.
A notice filed by the condemning authority with the governmental office charged with housing deeds and other property documents. The recorded lis pendens notifies all interested parties that the owner's property is in the process of being acquired for a public use so that anyone dealing with the property is aware of the pending action. Generally, the filing of the lis pendens is one of the first indicia that the condemnor seeks to exercise control and authority over the landowner's property. When the eminent domain proceeding is completed, a condemning authority will usually file a release of the lis pendens.
Motion in Limine
A motion filed by a party in a condemnation case which asks the court for an order or ruling limiting or preventing certain evidence from being presented by the other side at trial. The purpose of the motion is to prevent the interjection of matters which are irrelevant, inadmissible or prejudicial.
A determination made as to whether there is a 'need' or 'necessity' to take the property which is the subject of the condemnation action. The extent to which courts and judges will allow an inquiry into the 'necessity' for the taking varies from state to state. In some states a landowner may challenge the condemnor's necessity finding; other states may allow such an inquiry, but only if bad faith or fraud can be proven; still other states may not allow any inquiry into the necessity for taking the property.
In most jurisdictions, the property owner in a condemnation case is entitled to provide an opinion of value of his or her property. Whether an owner should give such an opinion is an important topic of discussion between the owner and the owner's eminent domain cousel. To understand more about this issue read "Owner Valuation Testimony in an Eminent Domain Case," under Featured Articles under Landowner Resources.
Petition or Complaint
A written pleading filed by the condemning authority to initiate the filing of the condemnation action against the landowner. The Petition or Complaint generally includes the legal basis and authority for filing the case, as well as other relevant facts and details about the parties, the property, the project necessitating the taking, and the nature and scope of the taking itself.
The capacity of the various states to regulate certain matters and behaviors in order to enforce order for the betterment of the health, safety, and general welfare of the state's inhabitants. With respect to property rights, sometimes "police power" actions and regulations can go too far, in which event they may constitute a taking under the Fifth Amendment to the U.S. Constituion for which just compensation must be paid.
In most jurisdictions, just compensation for the property being taken by eminent domain includes the payment of "post-judgment interest" by the condemning authority. This interest is applied to the final just compensation award from the date it is rendered or entered as a judgment against the condemning authority and the date of actual payment. The percentage of interest that a landowner may be entitled to as post-judgment interest may differ from state to state. See also "Pre-Judgment Interest."
In most instances a condemnor will not be held liable for any damages a propery owner may experience under the threat of condemnation or during the pre-planning stage that may be associated with a public project and the consideration of which properties to acquire for its construction. However, in cases where the threat of condemnation has lingered over property for an extended period of time (sometimes called a condemnation "cloud") causing significant uncertainty and damages, a property owner may be entitled to bring a cause of action for "pre-condemnation" damages or inverse condemnation. Such cases are heavily based on the facts and consultation with an experienced eminent domain attorney is recommended.
In most jurisdictions, just compensation for the property being taken by eminent domain includes the payment of "pre-judgment interest" by the condemning authority. This interest is generally applied to the difference between what was offered or made available to the landowner by the condemnor prior to the commencement of the case and the actual value of the property, as determined at trial. The percentage of interest that a landowner may be entitled to as pre-judgment interest may differ from state to state. See also "Post-Judgment Interest."
Project Influence Rule
A rule or standard to be applied in a condemnation case which refers to a positive or negative change in the market value of the property being condemned as a consequence of the public project for which all or a part of the property is being taken.
The government can only condemn private property and authorize the exercise of eminent domain for a “public purpose” or “public use.” Traditionally, this has meant for purposes such as widening roads, utility projects, building schools and other government buildings, and conservation. However, over the past decade, the definition of what constitutes a “public use” has widened substantially, to include, in some cases, private redevelopment projects and increased tax revenues. To learn more about the "public use" clause and how it is interpreted in an eminent domain case read the article "Public Use and Public Purpose" within the Featured Article section of Landowner Resources.
An evidentiary standard that is generally applied in determining the “highest and best use” of property when not all relevant factors exist as of the date of value. For instance, if the property is not zoned consistent with its claimed highest and best use, but there is a reasonable probability that it would be rezoned for that use, that highest and best use may be admissible. Similarly, if the property has not received all necessary permits for a particular use, but there is a reasonable probability that the permits would be issued, the permitted use may be admissible to establish value.
Physically taking private property is not the only way that the government can deprive property owners of their rights. When a government agency enacts a zoning ordinance or other regulation that diminishes the economic value of a piece of property, this is known as a “regulatory taking.” Like physical takings, regulatory takings require payment of just compensation.
Remainder or Residue
That part of the landowner’s property which remains with the landowner after the property being taken by the condemnor. To qualify as a remainder parcel, generally there needs to be a unity of ownership, use, and physical contiguity between the remainder and the property being taken. Jurisdictions differ on the factual basis for determining whether these three unity factors exist.
An easement taking by a condemning authority that allows usuage of the landowner's property for a defined period of time, at the end of which the easement terminates and full usuage returns to the landowner. Like other easement interests, the nature, scope and duration of a temporary easement is defined by its' written terms. Depending upon the language and terms used, as well as the location of a temporary easement, it can either have minimal impacts on property or extensive impacts. As a result, it is important that any temporary easement being requested by a condemning authority be evaluated properly so that the compensation for its use can be appropriately determined. Based on the potential impacts of a temporary easement, it is not uncommon for the landowner or the landowner's attorney to seek to negotiate the terms of the easement with the condemning authority. Temporary easements are generally, but not always, used to aid in the construction of the condemnor's project, in which event they are sometimes called Temporary Construction Easements.
Any portion of the owner's property remaining after a partial acquisition which is of little to no value due to its size, shape or condition. In some jurisdictions uneconomic remnants are required to be taken by the condemning authority on the basis that they constitute a total taking of the owner's property.
Additional Information on Eminent domain
Our website is full of resources for individuals and businesses threatened with the loss of their private property rights. For more information on the law of eminent domain and inverse condemnation, you can read:
- Calculating Just Compensation
- Eminent Domain vs. Inverse Condemnation: What’s the Difference?
- Property Owners’ Frequently Asked Questions about Eminent Domain
- Understanding Your Rights in Inverse Condemnation and Regulatory Takings Cases
- When Can Property Owners Challenge Eminent Domain?
- Can I Afford to Hire an Eminent Domain Attorney?
Speak With an Eminent Domain Lawyer at Owners’ Counsel of America
Owners’ Counsel of America (OCA) is a network of leading eminent domain lawyers throughout the United States. If the government is attempting to take your property, we encourage you to contact an OCA lawyer in your state for a free consultation. Locate your OCA lawyer online or call us at (877) 367-6963 to connect with an eminent domain lawyer today.
March 22nd, 2016 — In Articles
Eminent Domain vs. Inverse Condemnation: What’s the Difference?
Owners’ Counsel of America member-attorneys are dedicated to assisting private property owners defend their property rights when those rights are threatened by government intrusion or overreach. We realize that many of terms we discuss here and the concepts involved in eminent domain law are complex and can be confusing. To shed some light on this “dark corner of the law” we have answered some of the frequently asked questions landowners may have relating to eminent domain and the condemnation process here and here. In this article, we discuss the differences between eminent domain and inverse condemnation.
Eminent Domain vs. Inverse Condemnation
There are two types of government acquisition or “taking” of private property. One form of property acquisition includes the government’s exercise of its eminent domain power to force the sale of private property for a public project or use. Eminent Domain – also referred to as “condemnation” – is the power of local, state or federal government agencies to take private property for public use provided the owner is paid just compensation. Sometimes, private corporations such as oil and gas companies, railroads or redevelopment authorities may be granted eminent domain power to construct projects providing a benefit to the public.
The use of eminent domain power to take property is referred to by many terms and varies from state to state as well as internationally. The acquisition may be referred to as a “condemnation” or “direct condemnation,” “expropriation,” “appropriation” or simply a “direct taking.” In a direct condemnation or direct taking scenario, the government agency or other entity using the power of eminent domain follows certain procedures to acquire the property, establish the amount of just compensation due for the property taken and provide payment of that compensation to the owner.
The Eminent Domain Process
The eminent domain process and the procedures condemnors must follow differ from state to state. Further, the federal government and federal agencies may follow a process that is different from that which agencies within your state may follow. It is important, therefore, to consult with a skilled eminent domain attorney experienced in the state or federal jurisdiction in which your condemnation case will be litigated.
There are some basic steps, which may be similar across the country, such as:
- The government or agency having the power of eminent domain identifies a public project or use which may require the the acquisition of private property
- The government, agency or company (also known as “condemnor”) notifies the potentially affected property owners that their property is needed for this purpose
- The condemnor may make an offer to purchase, request a dedication of private property or may try to negotiate a price for the sale of the property
- If negotiations are not successful, the condemnor will file suit to acquire the property using the power of eminent domain in exchange for just compensation
- Depending upon the state-specific procedures, an independent commission, a sitting judge or a civil jury will determines the amount of just compensation due to the owner for the loss of the property and possibly for damages, if any, to remaining property. In some states, the loss of business good will or profits may also be a component of just compensation and some states also provide for the recovery of attorneys fees, appraisal fees, and/or defense costs. (We have written about the financial compensation available to property owners in eminent domain here and about attorneys fees.)
The second type of taking is referred to as inverse condemnation. A taking of property by inverse condemnation occurs when the government acquires or appropriates private property without following eminent domain procedures and without paying just compensation. An inverse condemnation taking may or may not be a physical acquisition of private property. If land has been acquired by the government or other condemning authority without following the proper procedures, the landowner has the right to file an inverse condemnation claim against the government to recover just compensation for the property taken.
Inverse condemnation is not limited to the permanent physical taking of property. Rather, it can include a temporary taking or occupation of private property, such as flooding, and also includes government regulation which burdens your property in such a way that you can not derive any economical use out of it. When government regulation significantly burdens private property the inverse condemnation may be referred to as a “regulatory taking.” Most importantly, in an inverse condemnation or regulatory taking scenario the government has failed to pay just compensation for the private property rights that have been taken.
The Inverse Condemnation Process
When government acquires property without following the eminent domain procedure, the affected property owner has the right to bring an inverse condemnation lawsuit against the government entity that has taken his or her property. The suit filed by the owner is “inverse” rather than “direct” because it is brought by the property owner, not by the government agency or other entity having eminent domain power. Therefore, the property owner carries the burden of proof that property rights were acquired without the payment of compensation. This differs from a direct condemnation following eminent domain procedures which places the burden of proof upon the condemnor to show that the acquisition is necessary and that the project has a true public purpose.
As in the eminent domain process discussed above, each state may follow different procedures and may have differing statute of limitations for inverse condemnation. Because your property rights are at stake, we recommend consulting with an experienced inverse condemnation attorney before proceeding with an inverse condemnation or regulatory takings claim.
Owners’ Counsel of America: Skilled Eminent Domain and Inverse Condemnation Lawyers
If you are a property owner facing eminent domain or if you believe that you may have a potential inverse condemnation claim, learn more about how to protect your rights by contacting a lawyer with Owners’ Counsel of America.
March 3rd, 2016 — In Articles
I Received a Condemnation Notice. What are My Rights?
If you received a condemnation notice or a notice that your property may be needed for a public project, it means that a federal, state or local government authority is seeking to acquire your property (or an interest in your property) using the power of eminent domain.
Eminent domain is the power granted to the government and governmental agencies to seize private property for public use. This power is not absolute and as a property owner, you have a number of important legal rights. However, protecting these rights can be a challenge. For private owners who suddenly find that their properties sit in the way of public (and, in some cases, private) projects, the threat of condemnation can be a very real concern. As a result, if you have received a notice of condemnation, it is in your best interest to speak with an experienced eminent domain lawyer as soon as possible.
Your Rights After Receiving a Condemnation Notice
As the owner of a private property, your rights are protected by state law, federal law and the U.S. Constitution – specifically, the Fifth Amendment.
Private property owners’ rights include the following:
- Public purpose – The Fifth Amendment requires that the government only condemn private property for a public purpose. While “public purpose” is not clearly defined, there are some guidelines outlining reasons the government can – and can’t – take private property.
- Due process – Under the Fifth and Fourteenth Amendments, all citizens are entitled to due process of law, before the government can take their property. With respect to eminent domain, landowners are entitled to notice of and to be heard before the government can deprive them of their property. The notice must provide reasonable information that would provide affected landowners and other interested parties adequate time and opportunity to respond.
- Just compensation – The Fifth Amendment also requires the condemning authority to pay just compensation for property taken using the power of eminent domain. The requirement that landowners receive just compensation for property acquired by eminent domain provides the owner a financial payment in exchange for the loss of his or her property to the use of the public. When a portion of a property is taken, the owner may be entitled to compensation for the value of the part taken as well as any damages to remaining property.
- Expense reimbursements – State laws across the country provide opportunities for landowners to recover some or all of their attorneys’ fees, relocation costs, appraisal or survey fees and other expenses incurred as a result of the government’s exercise of eminent domain.
- Dispute – Perhaps most importantly, if the government attempts to condemn your property, you have the right to consult with an attorney and to fight back. An experienced eminent domain lawyer will be able to help you identify all possible grounds to challenge the government’s exercise of eminent domain, will assist you in obtaining just compensation for your property and will help you navigate the complex procedures and deadlines of eminent domain litigation.
Unfortunately, government agencies can exceed their authority in attempting to condemn private property. For owners who do nothing, this can result in serious violations of their Constitutional rights and potentially costly losses to their property. For owners who fight back, the process can be a struggle, but the outcome is generally worth the investment.
Contact an Eminent Domain Lawyer with Owners’ Counsel of America
From preventing an unconstitutional taking to ensuring the payment of just compensation, there are numerous issues to consider when you receive a condemnation notice. To learn more, read our FAQs or contact an attorney with Owners’ Counsel of America in your state today.
January 4th, 2016 — In Articles
Can Eminent Domain Be Used to Acquire Natural Gas and Water Rights?
In most eminent domain cases, property owners are fighting to protect their land from condemnation. Whether for a public park, road, hospital, or utility, the government most often uses its power of eminent domain to obtain the right to build on private property.
But, what if the government isn’t seeking to take your property, but rather the resources beneath it? This presents an important question for landowners in resource-rich states like California, Montana, Pennsylvania, West Virginia, and others. Recently, cases and proposed statutes affecting private property owners’ natural gas and water rights have brought this issue to the forefront.
The Broad Power of Eminent Domain
Broadly speaking, the government has the power to exercise eminent domain to take private property rights in addition to acquiring entire parcels of land. Such cases may involve easements and restrictive covenants, affecting only a portion – however valuable – of a landowner’s property.
In general, this concept extends to claims involving underground resource rights. These resources – like the land itself – are valuable private property, and the owners deserve the full protection of the Fifth Amendment’s right of just compensation. However, determining what constitutes just compensation can be a challenge, and in some states, legislators are taking action to require owners to give up their underground natural resource rights.
Determining Just Compensation for Natural Gas and Water Rights
Cases involved natural resource rights can be exceedingly complex. Even the most basic issues – determining who owns what and what constitutes just compensation – can lead to years of legal wrangling and disputes. However, as a property owner, it is critical to protect your rights, and an experienced property rights and eminent domain attorney can help make sure that neither the government nor a private oil and gas company oversteps its bounds.
Recently, a string of cases in Texas has shed new light on the issue of valuing underground resource rights. Depending on the circumstances involved, the cases suggest two possible alternatives:
- The “before and after” approach, which looks at the difference in property value with and without the affected rights; and,
- Focusing on the loss of the income-producing value of the property once the resources are drained.
These alternatives are consistent with those used in other types of eminent domain cases as well.
Forced Pooling: Compelling Landowners to Give Up Rights to Minerals, Gas and Other Underground Resources
When resources such as oil, gas, or other minerals exist in an area extending under multiple parcels of private property, the concern arises as to how to account for each individual property owner’s rights. Under a legal concept known as “forced pooling” or “compulsory integration,” once a certain percentage of landowners in a drilling area agree to a lease allowing extraction, the remaining owners can be forced to follow suit. Forced pooling allows drilling companies to petition the regulatory agency overseeing drilling in a state for permission to harvest resources from a large area without reaching lease or drilling agreements with each affected landowner. These laws also provide that all landowners in a drilling unit receive compensation for the resources extracted from a pooled area. A video explaining forced pooling and landowners’ concerns is available here.
Thirty-nine states, have forced pooling statutes on the books. As of this writing, the laws in West Virginia and Pennsylvania do not apply to drilling in the Marcellus or Utica shale formations, however, proponents have or are trying to expand the laws to include such drilling operations. Similarly to eminent domain laws and procedures, the specific provisions of forced pooling or compulsory integration vary from state to state. In states where Marcellus and Utica shale exploration and drilling is occurring property owners with underground natural gas and water rights must be vigilant to ensure that they are not being denied their property rights without just compensation.
Contact an Attorney with OCA to Protect Your Underground Natural Gas or Water Rights
Owners’ Counsel of America (OCA) is a nationwide network of some of the most-experienced private property rights and eminent domain attorneys in the country. If you are concerned about protecting your underground mineral, natural gas or water rights, please contact us today.
December 28th, 2015 — In Articles
When Can Property Owners Challenge Eminent Domain?
While state and federal government agencies have the power of eminent domain – to take private property for public use – that power is not unlimited. Eminent domain power is limited by the Fifth and Fourteenth Amendments to the U.S. Constitution and by individual state constitutions and laws. If the government seeks to take your property, there are potential defenses an eminent domain attorney may employ to challenge the taking. While certain defenses challenge the condemnation outright, others focus on ensuring that you receive just compensation for the taking of your property. In this article, we provide a brief overview of four of the most common defenses to condemnation:
- The government lacks the authority to condemn your property
- The government lacks a sufficient public purpose for condemnation
- The government does not your property for the public project
- The government has not offered just compensation for your property
Common Defenses to the Exercise of Eminent Domain
The Government Lacks the Authority Needed to Condemn Your Property
In order to condemn your property, the government agency seeking to exercise eminent domain must have the authority to do so. Government agencies cannot simply make a decision to condemn a private owner’s property and move forward. This authority may be granted by a statute that is either general in nature or enacted for a specific purpose. Departments of transportation, public utilities, and the federal government generally have the power of eminent domain.
A landowner may be successful in challenging the authority to take private property in situations where the condemnor assumed it had been granted eminent domain authority when, in fact, it had not. To defend against a taking, eminent domain lawyers may present evidence that a statute did not include a particular type of project, expressly omitted it or required certain steps to be followed – such as a 3/5 vote of the state legislature for approval to use eminent domain.
The Government Lacks a Sufficient Public Purpose for Condemnation
The power of eminent domain only allows condemnation of private property for a legitimate public purpose. While “public purpose” has been interpreted broadly, there may be defenses against the government’s exercise of eminent domain. If the government cannot justify its proposed condemnation with a valid public purpose, its actions may violate your constitutional rights.
Recently, local governments and redevelopment authorities have used the power of eminent domain to condemn private property on behalf of developers, to pave the way for new construction in areas designated as “blighted” by municipal authorities. The intended public purpose or benefit may be to increase tax revenues and ignite economic development for a struggling municipality or to replace or improve what some may consider to be a “blighted” or older community. In some states, such a purpose has been expressly prohibited by statute or constitutional amendment and a public purpose challenge may be successful.
The Government Does Not Need to Condemn Your Property for a Public Project
Even if the government has established a valid public purpose, it may not condemn your property if the intended acquisition of your property is not “necessary” to the project. Under most state statutes, condemnors are only authorized to take enough private property to complete the intended project. Some landowners have successfully defended their property and defeated a taking by arguing a lack of necessity.
In such cases, the landowner’s eminent domain attorney may have challenged the take on the basis that the owner’s land was simply not necessary for the project. For this defense to be successful, the owner’s condemnation attorney must present evidence that the project could be constructed without the subject property and, as such, that land was not needed. If the condemning agency identifies more property for condemnation than absolutely necessary, a defense of this nature may be successful to defeat the taking.
The Government Wants to Take Your Property Without Paying Just Compensation
Finally, if the government has the authority, follows the required procedures and the condemnation of your property is necessary to execute a true public purpose, obtaining just compensation may be your only option under the law. If you feel that the government has not made a reasonable offer for your property, your eminent domain lawyer may be able to negotiate a fair settlement on your behalf.
In many cases, the condemnor’s appraiser only considers the value of the land appropriated not the damages the taking will have on your remaining property. If the condemnor has not offered compensation for the reduction in value to your remaining property or to cure any negative impacts to your remaining property, an eminent domain attorney may help negotiate such compensation. For a property owner facing eminent domain, it is important to understand how properties are valued in condemnation proceedings and what is compensable under the law.
Do You Have Questions? Contact an about Eminent Domain Attorney at Owners’ Counsel of America
The defenses available to you will depend upon the unique facts and circumstances involved in your case. If you are facing condemnation and want to learn more about protecting your property rights, contact an eminent domain attorney with Owners’ Counsel of America.
September 21st, 2015 — In Articles
More Answers to Property Owners’ Frequently Asked Questions about Eminent Domain
The concepts – and even terminology – involved in eminent domain law are complex and can be confusing. To help property owners understand the condemnation process, we have published answers to many frequently asked questions (FAQs). In this article, we provide answers to some additional FAQs that might be helpful to property owners.
The answers provided are for informational purposes only, and should not be construed as legal advice. For a free initial consultation, please contact an Owners’ Counsel eminent domain lawyer to discuss your situation.
Q. If I receive a condemnation notice, does that mean that the government has already taken my property?
A. No. Generally, a condemnation notice is provided to inform you that the government intends to take your property through eminent domain. In many states, a condemning authority must follow certain procedures before it can acquire your property using the power of eminent domain. These procedures often require that the government provide a property owner with notice of the proposed public project and of the need to acquire your property. If you have received a condemnation notice, you still have the opportunity to consult with an experienced eminent domain lawyer to learn how you can defend your property and enforce your statutory and constitutional rights.
Q. If the government has already taken my property, is it too late to take action?
A. Probably not, however, it will depend upon the facts of your case. If your property has been acquired by the government, contact an eminent domain lawyer for a thorough case evaluation. Lawyers with OCA regularly represent property owners seeking to maximize just compensation for property acquired by eminent domain and in situations where the government may have taken property without filing condemnation proceedings, such as inverse condemnation and regulatory takings claims.
Q. What is an “easement,” and how does it relate to eminent domain?
A. Sometimes, a condemning agency does not need to acquire property outright, but only needs to obtain certain rights to use it. In these cases, the agency may seek to acquire a property right known as an “easement” using the power of eminent domain. An easement allows the government (or in some cases, a private entity) to convert a portion of your property for public use.
A recent, high-profile example of a company seeking easements through eminent domain is TransCanada’s efforts to make way for the Keystone XL pipeline. TransCanada is currently fighting with property owners in Nebraska to obtain the rights it needs to build its new pipeline across America.
Q. What should I look for in an eminent domain lawyer?
A. Eminent domain laws are complex, are constantly changing and are unique in each state and in the Federal Court system. As a result, when the government or a private entity threatens to take your private property, you need a lawyer who is experienced in and dedicated to this area of the law.
The lawyers in OCA’s nationwide network are committed to representing property owners in eminent domain and property rights litigation. OCA lawyers have successful track records representing private owners in condemnation and property rights proceedings. Their results highlight their skills and abilities. If you would like more information about an OCA attorney’s results, please contact us.
Speak with an OCA Eminent Domain Lawyer Today
Owners’ Counsel of America (OCA) attorneys are dedicated to representing private landowners who are facing the condemnation of their property through eminent domain. For more information about your property rights or what to do if you are facing an eminent domain taking, we encourage you to get in speak with an OCA attorney about your case, call (877) 367-6963 or contact us online.
September 5th, 2015 — In Articles
Can I Afford to Hire an Eminent Domain Attorney?
You have received a notice from the government informing you that your property is needed for a public project. The notice suggests that the government will use its power of eminent domain to take your property, if you can not reach an agreement on the price that the government should pay you for your land. The idea of challenging the government to defend your property, protect your rights and make sure that you are compensated fairly can be overwhelming and may even seem out of reach. You might wonder if you can afford to hire an experienced condemnation attorney to guide you through the eminent domain process and defend your property rights.
Owners’ Counsel of America attorneys offer a free initial consultation to property owners who are facing condemnation or are concerned that their property has been negatively affected or damaged by a government action. OCA lawyers will speak with an owner to gather the facts surrounding the proposed taking and learn about the land and any improvements or businesses on the property. Our attorneys will explain the condemnation process and inform you of your rights under the law. While no fees will be charged for this initial consultation, an OCA lawyer will evaluate your case and answer your questions.
OCA attorneys are dedicated to the defense of private property rights and to maximizing just compensation while minimizing the impact of the taking. Our lawyers are prepared to challenge the government to defend your property and protect your rights.
Each state has specific eminent domain legislation and procedures which can influence how attorney’s fees and litigation costs are charged (per hour, contingency fee, flat fee) and which party (condemnor/government or condemnee/landowner) is responsible for paying those fees and costs. An OCA attorney can explain how attorney’s fees and costs are calculated and will explain any provisions under the law that provide for reimbursement for either fees and/or costs to a landowner who defends his or her property in an eminent domain proceeding.
If your property has been affected by a public project or is threatened with condemnation, contact an OCA lawyer in your state for a free case evaluation and explanation of the eminent domain process, including how attorney’s fees and costs are determined. Don’t allow the belief that lawyers are too expensive or the fear that you can’t afford a skilled attorney prevent you from defending your property rights and fighting for just compensation.
September 4th, 2015 — In Articles
Property Owners’ Frequently Asked Questions About the Keystone XL Pipeline
If you own property on the proposed route of the Keystone XL Pipeline, it is important to understand your legal rights. Below are answers to some frequently asked questions about the Keystone XL Pipeline. You can also read our answers to frequently asked questions about eminent domain.
What is the Keystone XL Pipeline?
The Keystone Pipeline is an oil pipeline system that runs from the Western Canada Sedimentary Basin in Alberta to refineries and distribution centers in Illinois, Oklahoma and Texas. Commissioned in 2010, the pipeline has been subject to intense debate with regard to its environmental impact, long-term viability, and impact on property owners across America.
While the original Keystone Pipeline was completed in 2010, the Keystone XL Pipeline project has been proposed to construct a second, route from Alberta to Texas passing through Montana, South Dakota and Nebraska. Keystone XL will connect with the Keystone Pipeline in Steele City, Nebraska, and
How Does Eminent Domain Fit Into the Keystone XL Pipeline Discussion?
Eminent domain is the power held by federal, state and local governments to take (or “condemn”) private property for public use. However, the government also has the authority to grant the powers of eminent domain to private corporations undertaking projects for the benefit of the general public.
Viewing the Keystone XL Pipeline as an important public works infrastructure project, Montana and South Dakota have authorized the exercise of eminent domain to acquire the private property needed for the pipeline’s construction. A Nebraska district court judge issued a temporary injunction on February 12, 2015, halting TransCanada’s efforts to acquire easement rights from Nebraska landowners for the Keystone XL pipeline through eminent domain proceedings.
The use of eminent domain is limited by the Fifth and Fourteenth Amendments to the U.S. Constitution. The Takings Clause of the Fifth Amendment places two requirements on the Federal Government’s exercise of eminent domain power: (1) the property must be acquired “for public use,” and, (2) the taking authority must pay “just compensation” to the owner of the property acquired. The Fourteenth Amendment extends the limits of the Takings Clause to state and local governments’ use of eminent domain.
Can TransCanada use Eminent Domain to Take Private Property for the Keystone XL Pipeline?
Yes. TransCanada has been granted eminent domain power to acquire private property for the construction of the Keystone XL Pipeline in Montana and South Dakota. However, there have been numerous legal challenges to TransCanada’s use of eminent domain and private property owners’ constitutional rights.
Subject to regulatory and government approvals, utility companies – including foreign utility companies such as TransCanada – can exercise eminent domain in order to undertake large-scale infrastructure projects benefitting the public.
Have the Courts Prevented any Eminent Domain Takings Relating to the XL Pipeline?
Yes. Earlier this year, OCA Nebraska Member Bill Blake wrote about a case in Nebraska in which the judge issued a temporary injunction disrupting the progress of the Keystone XL Pipeline. There have been similar court cases along the pipeline’s route as well.
Of course, not all property owners’ challenges have been successful. For example, in 2012 a Texas farmer lost her bid to avoid condemnation to make way for the Keystone XL Pipeline.
What Should I Do if I Receive a Condemnation Notice Relating to the Keystone XL Pipeline?
If you receive notice that TransCanada is seeking to condemn your property for the Keystone XL Pipeline, contact an eminent domain attorney to learn more about the eminent domain process and how to protect your property rights. Owners’ Counsel of America is a network of experienced eminent domain attorneys dedicated to defending the rights of private property owners across the country.
Contact Owners’ Counsel of America Today
For more information about protecting your property against the exercise of eminent domain, contact Owners’ Counsel of America today.
September 2nd, 2015 — In Articles
Understanding Your Rights in Inverse Condemnation and Regulatory Takings Cases
The Fifth Amendment to the U.S. Constitution establishes that the government must pay property owners just compensation for the taking of private property for a public purpose. Most government takings involve the condemnation of private property using the power of eminent domain. In a typical eminent domain case, the government issues a notice in advance of the taking and in most jurisdictions makes an initial offer to purchase the needed property.
The property owner, therefore, has an opportunity to protect his or her property rights and obtain just compensation. Owners’ Counsel of America (OCA) attorneys represent property owners in eminent domain and inverse condemnation proceedings nationwide.
What if the condemning authority acquires your property without following eminent domain process? Suddenly you realize that the government is using your property without your consent and without compensating you. What should your next step be?
Inverse Condemnation and Property Owners’ Constitutional Rights
In such situations, property owners can seek remedy with the courts for the taking of their property. This process is generally known as “inverse condemnation.” In inverse condemnation actions, property owners file a claim in court to enforce their rights under the Fifth Amendment. Depending on your state jurisdiction, a statute of limitations may apply. It is imperative that an owner seeks assistance from a qualified and experience attorney to insure a successful resolution to an inverse condemnation claim.
What Constitutes a “Taking”?
A taking of private property can be a direct and obvious action by government, such as the construction of a public building on private land, or may be less clear, such as a local ordinance or regulation that deprives the property owner of all economically beneficial use of the property without compensation.
In a more obvious 2014 inverse condemnation case handled by OCA attorneys, the State of Mississippi started constructing a municipal harbor and parking lot on a Katrina-ravaged restaurant owner’s property – but the start of a government works project is not necessary to give rise to a claim for inverse condemnation. For example, property owners may be entitled to compensation in cases involving:
- Temporary flooding of private property
- Prohibiting use of groundwater for irrigation
- Passing a government regulation, such as a zoning ordinance, that deprives the property owner of economically beneficial use of the property
This latter example is known as a “regulatory taking.” In regulatory takings cases, property owners may be able to seek invalidation of the subject regulation in addition to pursuing a claim for just compensation. The procedures and laws regarding regulatory takings claims vary from state to state and can be extremely complicated. If you believe that the use of your property has been negatively affected by a government regulation, seek the guidance of an experienced property rights attorney.
What Do You Do if the Government Has Taken Your Private Property?
If you believe that you have been denied just compensation for the taking of your property your property has been damaged by a government regulation, it is important to act quickly to enforce your rights and meet any statute of limitations that may apply in your state. OCA’s nationwide inverse condemnation lawyers can help you protect your rights and obtain just compensation.
Contact the Inverse Condemnation Attorneys at Owners’ Counsel of America
The attorneys at OCA are dedicated to representing property owners in inverse condemnation and regulatory takings claims against the government. To discuss your case with an experienced property rights lawyer in your state, please contact us today.
June 25th, 2015 — In Articles
Property Owners’ Frequently Asked Questions About Eminent Domain
When you learn that your property may be condemned, you need information and advice as to how to proceed and what actions to take. Here are a number of common questions and answers which may be helpful.
Q. What is eminent domain?
A. Eminent domain is the power of the government to take private property belonging to its citizen’s for public use, provided just compensation is paid to the owner. It can also be called “condemnation” or, in some states, “expropriation.”
Q. Who can use eminent domain?
A. Local, state and the federal government have the power of eminent domain. The government’s power of eminent domain extends to government agencies, such as your municipality’s public works department, state’s Department of Transportation or the U.S. Forest Service. Some private companies or individuals may also be granted the power to condemn private property to complete certain projects intended to benefit the public. These private companies may include redevelopment authorities, oil and gas companies, railroads or other privately-owned utility companies.
Q. What does “public use” mean?
A. Typically, public use has been defined as government projects intended to bring a benefit to its citizens, such as widening roads, building schools, constructing parks and correcting drainage issues. That definition has expanded over the years to include improvement of run-down (“blighted”) neighborhoods and the redevelopment of certain areas with a plan approved by, and usually supervised by, the government.
Q. The government (or a transportation authority, redevelopment agency, utility or energy company) wants to take my property by eminent domain. What can I expect to happen? What are the steps in a condemnation case?
A. The laws and procedures relating to eminent domain vary from state to state and can be quite complex. We recommend that you consult with an experienced eminent domain lawyer in your state for specific information about your property rights and to learn more about the condemnation process.
Q. Can eminent domain be used to take my property and give it to another private party?
A. The federal and state constitutions say that property may only be condemned for “public use.” For many years, “public use” meant that property could be taken for things like roads, schools, and public buildings. Later, courts allowed eminent domain to be used for private corporations developing public utilities, like electric companies and railroads. In the 1950’s, eminent domain became increasingly used for “slum clearance.” Once an area was declared to be a slum or “blighted,” property could be taken using eminent domain and then transferred to another private party. More recently, local governments have tried to use eminent domain to transfer land to other private parties. Whether and under what circumstances courts will allow this use of eminent domain is a matter of state law. Several states permit condemnations for economic development, but some do not. You should consult with an experienced eminent domain lawyer in your state to determine if the condemnation threatening your property is legal.
Q. Should I discuss the value of my property with a government representative?
A. No. We recommend that you consult with an experienced condemnation attorney first before discussing anything with the government representative. Compensation by a condemning authority may include special benefits and rights which the property owner needs to know before dealing with the condemning authority. What the property owner gains by using an experienced eminent domain lawyer is a level playing field with the condemning authority.
Q. Why shouldn’t I negotiate on my own?
A. Everything you say or do may be used against you by the condemning authority at different stages of negotiations and litigation. By waiting to select an attorney after talks have been underway, you risk compromising your rights and compensation. Keep in mind that you, as the property owner, are engaging with a condemning authority which has full knowledge of its rights while you have little knowledge of your rights under eminent domain law.
Q. I have plans to develop my property. Should I continue to secure government approvals to develop my land?
A. No. We do not recommend that you attempt to obtain building permits, variances, zone changes, subdivision approvals or curb cuts without consulting experienced eminent domain counsel. A failed attempt to obtain such approvals can be used against you in condemnation litigation and can be extraordinarily harmful to your case.
Q. Should I appeal my real estate tax assessment?
A. Prior to considering an appeal of your real estate taxes, you should consider consulting an attorney experienced in eminent domain litigation. If you do appeal the tax assessment, your opinion of value in the tax appeal may be used against you in the condemnation proceeding and affect the amount of just compensation you receive.
Q. Should I stop caring for and maintaining my property?
A. No. Even if you are facing condemnation, the value of your property is often determined at the time it is actually taken by the government. A lack of maintenance may decrease its value affecting the amount of just compensation you may be entitled to receive.
Q. What should I tell the government real estate appraisers?
A. Very little, if anything. They are not interested in you receiving the highest possible value for your property. They are hired by the governmental agency seeking to acquire your property. Consult with an experienced eminent domain attorney before giving any information to the government appraisers.
Q. What information and documents should I provide the government if they are looking to condemn my property?
A. Nothing, prior to consulting with an experienced condemnation lawyer. As a general rule, do not supply copies of leases, expense records, profit and loss statements, or similar documents to the government or its representatives.
Q. Should I let the government conduct any environmental or other tests?
A. No. Talk to an experienced condemnation attorney first. Some of the tests the condemning authority might wish to do are routine and not invasive. However, some tests require boring large holes into the ground or establishing monitoring wells and may disrupt your use and enjoyment of the property. Further, potential contamination underground or in a building can further complicate the eminent domain proceedings. Contamination on your property could significantly impact your compensation if not handled correctly.
Q. Can I rely upon the government’s relocation personnel to obtain all of my relocation benefits?
A. No, you need to make sure you are fully informed of your monetary and non-monetary rights under relocation laws. In some instances, federal relocation laws apply and in others situations your state relocation law will apply. An experienced condemnation lawyer will insure that your benefits are maximized and will know how to resolve differences without additional litigation.
Q. What is relocation assistance and who qualifies to receive it?
A. Although reimbursement for relocation expenses is related to the eminent domain process, it is handled separately. In 1970, Congress passed the Uniform Relocation Assistance and Real Property Acquisition Policies Act, and amended it in 1987. Although this action provided clarification in some areas, the relocation reimbursement process for state projects still varies according to location, and cases are usually evaluated on an individual basis.
If you have been displaced due to federal or federally funded projects, an experienced condemnation lawyer can insure that your benefits are maximized.
Q. Why should I consult with an eminent domain lawyer?
A. Eminent domain proceedings are complex and can involve complicated issues such as the property’s highest and best use, the calculation of just compensation and the damages a property has suffered due to the taking. Property condemnation can also be a confusing and stressful process. Having a qualified condemnation lawyer on your side to assist as you navigate the process is not only helpful, but possibly essential. The government will have experienced eminent domain counsel on its side. To protect your rights, shouldn’t you?