The taking of property for public use sounds like something out of a novel or a Hollywood movie, but it is a genuine concept that is built into the United States Constitution. Accordingly, it is important for any private citizen or business owner to be aware of the government’s power in this respect so that they will know how to respond should the situation ever arise.
The taking of property for public use is most often referred to as “eminent domain.” This refers to the power of the government to acquire privately owned land, real estate and other items for the benefit of the public. Codified in the U.S. Constitution, eminent domain is also drafted into state constitutions and the laws of various counties and cities across the country. Consequently, it is possible for nearly any government agency to seize private property.
However, they cannot do so without offering “just compensation” to the property owner. This typically means that the government offers to buy the property at fair market value. If the owner agrees to the price, then it can be a relatively straightforward transaction. In reality, eminent domain actions are far more complicated. That’s because the owner has the right to negotiate the price or even to dispute the taking.
The principle of eminent domain in the U.S. is predicated on a single phrase in the Fifth Amendment of the Constitution. This clause merely says that no property will be taken for public use without just compensation. The founding fathers who drafted this amendment were landowners themselves. After a lifetime of mistreatment by the British government, they were anxious to protect themselves and other men of property from suffering similar abuses at the hands of the new American government. Accordingly, they proactively ensured that no one could be deprived of property without being adequately paid for it.
When the Fifth Amendment was drafted, the government likely envisioned acquiring private land for the express use of and occupation by the government. Things changed as communities grew larger and the population exploded. Citizens began to see that when the government took property that was near or adjacent to their own, it had the power to affect the value and usefulness of their property. Eventually, American courts had to acknowledge that eminent domain needed to encompass more than just the outright taking of property for public use.
The concept that the property can only be used for the public good is a central one. It is not lawful for a town mayor or a U.S. congressman to simply take property belonging to their constituents for their own use or enrichment. Instead, any land or other property acquired in an eminent domain action must be of benefit to at least a portion of the general public.
Frequently, this means that the government takes land or other property to complete a project like:
- -Building a public school
- -Constructing a new highway
- -Widening a busy roadway
- -Adding a water treatment plant
- -Putting in a park
- -Making room for a new police station
All of these are concrete representations of “public use.” A park or a school can enhance the livability of the surrounding community while a new highway or wider road can ease continual traffic congestion. A water treatment plant ensures public health while a new police station guarantees a safer neighborhood. However, the government can also take property for less tangible purposes.
Courts are now more frequently ruling in favor of government agencies that take property in an effort to stimulate the local economy, relieve unemployment or ensure more efficient operation of the municipality. This means that the property that is acquired may ultimately end up in private hands. For instance, a parcel of land could be taken by the government, and then turned over to a private corporation that wants to build a new business park. The land has essentially gone from one private owner to another with the government acting as an intermediary. However, because the new business park is likely to stimulate the local economy, the government can argue that the taking of the property was for the good of the public.
The taking of property for public use is rarely a black-and-white matter. It is a complex situation that is fraught with legal questions and gray areas. This is why it is vital for property owners to consult with legal and real estate professionals who understand the finer points of eminent domain after receiving a notice of intent from a government agency. With the assistance of these professionals, owners of private property can ensure that the taking is justified, that it will result in a benefit to the public and that they receive just compensation for their loss.
As the population of a community grows, it is only natural that utilities and other government services must expand to meet the increase in demand. If possible, most municipalities try to use the land and other resources that they already own to meet the needs of the community. However, it is not possible to do this in all instances. This means that there must be a way for the government to acquire more property, and some of this is likely to be privately owned.
The method for how the government takes property is officially called “eminent domain.” The modern version of this concept has its roots in the U.S. Constitution, but it has been used by governments and societies for hundreds of years. Every state in America and most county and city governments also have laws relating to eminent domain. Typically, these laws are aimed at finding an acceptable balance between the need of governments to acquire private property and the right of citizens to own property without being unfairly deprived of it.
It is not an easy balance to strike, which is why the laws are constantly evolving. Courts also have an important role to play as they often settle disagreements that arise between government agencies and property owners. Decisions reached by judges and juries may affect future eminent domain laws to further define what the government can and cannot do as well as solidifying the rights of the property owner.
Several restrictions are placed on the government’s ability to claim eminent domain. The property they take must be for public use and they must offer just compensation to the owner of the property. Both of these restrictions are subject to broad interpretation, and they can form the basis of administrative and civil lawsuits.
A government agency may spend months planning for improvements like new roads, the expansion of utility services or any number of other projects that are aimed at improving the lives of the public. As the plans are drafted, government personnel will carefully determine which parcels of private property are likely to be affected by the project. This can mean that the owner will lose all of their property. However, it is more common for only a portion of the owner’s land to be affected. For instance, a road-widening project may mean that several business owners will lose 10 feet of their parking lots, though their operations will remain largely intact.
The government works with appraisers to determine the fair market value of any property that they plan to seize. If they will not be claiming the entire parcel, then they offer an amount that is in proportion to the amount of land being seized. Should the owner agree to the initial offer, then the transaction proceeds as a straightforward purchase.
The owner also has the right to dispute the amount that is being offered. Typically, the best way to do this is by obtaining another appraisal. Many owners also enlist the services of a lawyer or real estate professional to help them with the negotiation process. When an owner disputes the amount of compensation offered by the government, condemnation proceedings begin.
Numerous factors can affect the value of a particular piece of property. Some of these factors may be:
- -The size of the parcel
- -How the parcel is currently used
- -Whether or not the land holds valuable natural resources
- -Uses and values of neighboring properties
- -The presence of structures
- -Whether or not there are tenants or lessees currently on the property
Appraisers generally use one of three valuation methods to determine how much property is worth. The market approach relies on recent sales of similar properties while the cost approach determines the expense of the owner replacing existing structures and a comparable parcel of land. Under the income approach, the appraiser looks at the property’s income potential from tenants and lessees.
Only a professional appraiser is able to determine which valuation method is appropriate. It is critical for property owners to be aware that government agencies tend to offer initial amounts that are lower than the true fair market value. It also may be that the government’s appraiser did not use the correct valuation method for their calculations. A lawyer or real estate professional can offer critical advice about getting a second valuation opinion.
The government agency is required to provide the property owner with adequate notice of their intentions. This gives the owner time to consult with professionals who can help them to determine the fairness of the offer. When it comes to how the government takes property, it is wise to proceed with caution and to obtain assistance from legal and real estate professionals.