Negotiating With The Condemning Entity From a Position of Strength and Knowledge: Tips to Property Owners Under the Threat of Condemnation
This Article is written by Owners’ Counsel of America for general informational purposes only. It is intended to assist landowners by providing them with some basic tips when negotiating with a governmental body seeking to acquire property by the exercise of the eminent domain power. This Article is not to be viewed as providing legal advice or to be considered as a substitute for consulting with an experienced eminent domain, takings or property rights lawyer on the matters covered herein.
Property owners may believe themselves well equipped to negotiate with a condemning agency to resolve a valuation dispute. As a result, they often hesitate to hire or even consult with an experienced eminent domain lawyer. However, there are many things even a knowledgeable property owner may not know about resolving value differences when the eminent domain power is threatened. The consequence? Owners may either leave money on the table that was rightfully their’s or experience other adverse taking impacts that could have been avoided.
If you or someone you know is a property owner being threatened with a taking of property, read these helpful tips to make sure you are negotiating with the government from a position of strength and knowledge, rather than one of weakness and ignorance:
The Condemnor’s Negotiator Is Not Your Friend: Don’t be fooled into thinking that the government agent sent to negotiate for your property is there to protect you or serve your best interests. No matter how nice or cordial that person may be—remember that the government’s primary goal in a taking situation is generally to acquire your property as quickly as possible and for the least amount of compensation. The government’s negotiator is not there to make sure you receive the full measure of compensation that you are entitled to receive. That task is left to you or professionals that you may employ to act on your behalf.
Study the Condemnor’s Appraisal: Most condemnation offers are supported by a written appraisal and in some jurisdictions the government is required to provide you with a copy of the underlying appraisal. If you receive the condemnor’s appraisal, make sure you read it carefully to fully understand the value conclusions reached as well as the basis for those conclusions. Understanding how the government got to the number being offered to you is an essential step in deciding whether that number is fair and just. See also OCA’s Featured Article entitled “Anatomy of An Eminent Domain Appraisal.”
Obtain Your Own Appraisal: It is a fact that a property owner who has a strong appraisal prepared by an experienced eminent domain appraiser will do better in negotiating an acceptable outcome than one that seeks to resolve the value difference without the benefit of a supporting appraisal. As a landowner, if you are given the opportunity to obtain your own appraisal, particularly in situations where the stakes are high, you should think seriously about doing so. In some jurisdictions the government is required to pay for the reasonable cost of the owner’s appraisal, making the decision to obtain one much easier.
Understand the Highest and Best Use Concept: In most states the value of an owner’s property must be based on its highest and best use, which may be different than the use it is currently being put to. The highest and best use concept is important because it can often drive the value of the property and the amount of compensation to be paid. Determining highest and best use is a complicated exercise involving many variables that an experienced appraiser must analyze and evaluate. If you disagree with the highest and best use that the government’s appraiser has concluded to for your property, you should consult with your own appraiser to determine if a different use may be more appropriate. For more information on this issue, read OCA’s article entitled “A Landowner’s Guide to Highest and Best Use.”
Review the Project and Construction Plans: Knowing exactly what is planned to be built on the property to be taken from you is critical in understanding construction impacts that you will have to live with long after the acquisition has been resolved. This is particularly the case if you will be left with remaining property that will suffer from those impacts. Therefore, insist on being provided with a copy of the government’s most current engineering drawings and construction plans so that you can carefully study them and ask relevant questions about every relevant detail.
Understand that Compensation Includes Damages: Remember that in most jurisdictions not only are you entitled to receive compensation for the value of the property being taken from you, but also for any reasonable and foreseeable damages to your remaining property. That is why an understanding of the construction plans and what will be built on the property being taken is so very critical. In some cases, the damages to remaining property can exceed the value of the property actually taken.
Examine the Conveyance Documents Fully: If the taking involves the conveyance of an easement, license, lease or some lesser interest in property than a total fee taking, make sure you are presented with the written conveyance document that you will be asked to sign well in advance, so you have time to review and study it in detail. No matter what oral representations or promises the government’s agent has made to you, it will be the written document that you sign which will control the legal rights and obligations of the parties going forward. This is another area where having the advice and consultation of an experienced eminent domain lawyer can be immensely helpful.