EMINENT DOMAIN

EMINENT DOMAIN

The power of eminent domain permits the government to take private property for public use. The United
States and California Constitutions require “just compensation” for such a taking. Not all government activity
which may reduce or entirely destroy the value of property is a “taking.” For example, zoning or health
regulations which prohibit an owner from using a property for a certain purpose or in a certain manner may
make the property much less valuable but, usually, no compensation is paid. Where governmental regulation or
impositions on the use or development of land denies all economically beneficial or productive use of the land,
the regulatory action constitutes a taking requiring compensation.

The federal government, states, cities, counties, improvement districts, public utilities, public education
institutions, and similar public and semi-public bodies may all exercise the power of eminent domain and
almost always have the power to obtain the property in question for fair market value. The government can take
property within several weeks of advance notice, before any price is paid or even determined, upon depositing
an estimated price in court and getting a court order.

Examples of public uses are streets, irrigation, railroads, electric power, public housing, and off street parking.

Compensation

The use of the power of eminent domain is often referred to as condemnation. The main issue in almost all
condemnation cases is the amount of “just compensation.” Most courts have ruled that fair market value is just
compensation.

Severance Damage

Condemnation of a portion of a parcel of land may result in a loss in value of the remaining parcel. Normally,
the government must compensate the owner for this severance damage.

Benefits affected by severance are either general or special. A highway benefits all who use it, including the
condemnee. This general benefit is not an offset against severance damages. Conversion of the remainder of an
agricultural parcel to commercial usage because the severed portion is used for a government office building is
an example of a special benefit/increase in value which may be an offset against severance damages due from
the government.

Procedure

Negotiations with the property owner usually precede formal condemnation action by a public body. If
negotiations are successful, the property is purchased rather than condemned. If negotiations are unsuccessful,
the public body files a formal proceeding in court against the property owner.

If the government abandons a condemnation action, the property owner may recover legal expenses reasonably
and necessarily incurred, including attorney fees, appraisal fees, and fees for the service of other experts.

Inverse Condemnation

If a public work results in damage to property, the owner may initiate a suit as an inverse condemnation action.
An inverse condemnation action may also result if a public entity, having commenced an eminent domain
proceeding, does not diligently attempt to serve the complaint and the summons within 6 months.

Inverse Condemnation for Governmental Regulation

Government regulation of the use and development of real estate does not usually result in the “taking” or
condemnation of the real estate by the government without compensation as inverse condemnation. However,
in certain instances, where the governmental regulation is excessive in nature, the land owner may have an
action against the government for inverse condemnation. Where governmental regulation or impositions on the
use or development of land denies all economically beneficial or productive use of the land, the regulatory
action constitutes a taking that would require payment of compensation. However, it is the rare instance that all
of the legal factors result which legally establish that a government regulatory action constitutes such a taking.
There are also many procedural requirements that must be met before a landowner can validly assert that a
governmental regulation actually constitutes such a taking without compensation.