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At Cutter Law, our attorneys believe in ensuring property owners receive just compensation when part or all of their property is taken.
Unfortunately, property owners often find themselves in a complex situation they do not fully understand when they learn their property is subject to eminent domain (also known as condemnation).
Fighting for just compensation can be a long and stressful battle, and requires representation from attorneys who are highly knowledgeable of eminent domain law.
Fighting eminent domain without legal representation can result in you being underpaid for your property.
Here are some important things to know about eminent domain in California.
What is Eminent Domain?
Eminent domain (or condemnation, or expropriation) refers to the power of the government at the local, state or federal levels to take private property for public use.
The government or other agencies or private corporations have the right to do so if the project benefits the public and if the owner is paid just compensation.
Here are some possible reasons why your property might be taken by eminent domain:
- Oil and gas lines
- Water lines
- Road and Highway Expansion
- Public Parks
- Public Transit (i.e. light rail, high speed rail, bus lanes, and transit stations)
- Electric, phone, and power lines
California Eminent Domain Procedures
The government or agency generally starts with a public project that it feels is necessary and searches for a location for that project. That location should be in an area that offers the greatest public good at the least private harm (or inconvenience).
Once a property is found, the agent will appraise that property to determine its fair market value. The fair market value is used to determine just compensation for the project.
The property’s owner should be notified of the appraisal ahead of time and given the opportunity to be on site when the appraiser conducts an inspection.
Ideally, at this point, the property owner will hire an attorney who can advise the property owner of their rights and responsibilities in the process.
The appraiser should be accredited and independent and can receive information about the property from the landowner. Following the inspection, the appraiser determines the fair market value of the property. The purchasing party then makes an offer on the property for no less than the amount of the appraisal.
The purchase offer must include the following:
- A statement of the property’s proposed use
- A complete description of the property being acquired
- A list of any improvements included in the offer
- The amount of the offer
- An itemized list of how they valued the property
The owner can also decide to have an independent appraisal. If the owner and the purchasing agency do not agree on a price, the owner cannot be forced to enter into the purchase agreement.
The purchasing agency is expected to make reasonable efforts to negotiate a purchase of the property but if this is not possible, it can file an eminent domain action in court or abandon its plan to acquire the property.
Once the decision to file an eminent domain action is made, the agency requests a “Resolution of Necessity.” The property owner is given the opportunity to speak to the legislative body about whether the project is necessary and whether the property is necessary for the project.
At this point, if a condemnation attorney has not previously been hired, one should be.
If the “Resolution of Necessity” is adopted, the agency can file a complaint to purchase the property in exchange for the property’s fair market value. An eminent domain trial is undertaken to determine the property’s fair market value, with anyone who has an interest in the property having the opportunity to speak.
The trial may also determine whether the agency is legally entitled to purchase the property.
If the government or agent fails to pay the compensation required, the property owner can sue to recover the just compensation. This is known as inverse condemnation.
Understanding Just Compensation and Other Damages
Determining the just compensation for condemned property is complex. The value of the property or portion of the property taken must be determined.
You may also be able to recover compensation for:
- Severance damages (damages from access impairment, loss of frontage, changes to the size and shape of the property)
- Value of improvements you’ve made to the property (fixtures, machinery and so on)
- Loss or damage to the business
- Value of leasehold interests taken
- Accrued interest
- Relocation benefits
- Professional fees (attorneys fees, litigation expenses, appraiser fees)
Determining the property’s valuation is vital to ensuring landowners receive the full amount they deserve for their property. The government and other parties using eminent domain will attempt to pay the lowest amount possible. Without adequate evidence of your property’s value and “best use” your property may be undervalued.
Although “just compensation” for property subject to eminent domain is required under the constitution, there is not a precise standard for determining “just compensation.”
In Sacramento S. R.R. v. Heilbron (1909) the court established how property taken through eminent domain would be valued.
“The fair market value of the property taken is the highest price on the date of valuation that would be agreed to by a seller, being willing to sell but under no particular or urgent necessity for so doing, nor obliged to sell, and a buyer, being ready, willing, and able to buy but under no particular necessity for so doing, each dealing with the other with full knowledge of all the uses and purposes for which the property is reasonably adaptable and available.”(California Code of Civil Procedure Section 1263.320)
When determining the “fair market value,” two concerns must be addressed:
- Whether the project had increased or decreased the property’s value and the value of the neighborhood around it, and
- Whether the property is currently being used for its highest and best use, and whether its current use is a result of the project.
If there is no relevant comparable market to base the fair market value of a property on, any method of valuation that is “just and equitable” can be used, under the California Code of Civil Procedure (1263.320).
How an eminent domain attorney can help you?
Eminent domain law is not always straightforward. There are different rules and procedures in each state, and the federal government also has its own policies and procedures.
Additionally, there are factors that can be contested. The condemning party has to show that the property is being taken for public benefit (or public use), and must provide just compensation. The landowner can recover compensation for damage done to the remaining property, as well as the loss of business or loss of use.
These issues are vital to ensuring property owners receive the full amount they are entitled to, especially because the government might not offer the full compensation a property owner deserves.
A skilled and experienced eminent domain lawyer can help you challenge the government’s right to take your property and determine what damages you should be compensated for.
At Cutter Law, we take this stress off your hands and put our full resources into fighting for you. We can help determine whether you have the right to challenge the condemnation outright or fight for full payment of your just compensation.
We can also ensure the condemning party has followed all relevant procedures in taking your property.
The government and other condemning parties usually have vast resources and years of experience using their eminent domain rights to take property. This makes it difficult to fight against them.
If your property is subject to condemnation in California, you need an experienced attorney with the skills and resources to help you launch eminent domain litigation.