Deeds.com Real Estate Deeds

Eminent domain: An eminence front?

A simple Google image search of "eminent domain" returns countless cartoon depictions of the giant arm of Uncle Sam hovering above a modest home, while a defenseless figure guards the front door, powerless to stop the inevitable seizure of his home. Absent any context as to why the situation is occurring, the reader is sympathetic, of course, toward the homeowner. Eminent domain, it seems, typically conjures images of its land-grabbing abuses.

Eminent domain is the legal power of the federal, state, or local government to take private property for public use. The Fifth Amendment to the U.S. Constitution states that the government must compensate the property owner for the fair market value of the property (referred to as the "Takings Clause"). The Fourteenth Amendment expands the Takings Clause to include protections from takings by the states [1].

The official action of the government exercising its power of eminent domain to transfer title is referred to legally as "condemnation," where the condemnor (person or entity that expropriates property for public use) is the government body acting to acquire private land and the condemnee is the person whose property is expropriated for public use [2]. This meaning is separate from the term "condemned" as used to describe a property as uninhabitable.

Typically, the government wishing to acquire the property will make an offer to the property owner (notice of intent) before resorting to formal condemnation. In a condemnation by the federal government, the condemnor brings the individual into court by filing a declaration of taking under 40 U.S. Code 3114 in the U.S. District Court for the district where the subject property is situated. The declaration requires a statement of the authority by which, and the public use for which, the subject land is being taken; a description of the land; a statement that the land is taken for public use; a plan showing the land taken; and a statement of the compensation the acquiring authority estimates is just compensation for the property. On filing the declaration and depositing the compensation with the court, title vests in the government, with the right to fair compensation for the land vested in the private owner [3].

Condemnation procedures for states are established by the laws of the state where the subject property is located. Local ordinances vary, and several jurisdictions have passed legislation to limit eminent domain abuses at the local level [4]. Typical requirements for condemnation at the state and local level include making a concerted effort to purchase the property from the owner, filing a petition for condemnation with the appropriate court if an offer is refused, filing a lis pendens (pending action) in the land records where the subject property is located, and serving notice to the property owner of such filing. The owner has a set amount of time to respond to the notice, with the opportunity to challenge the action in court. To obtain a final judgment vesting title in the government's name, the government must be able to establish that the seizure of land is rationally related to a conceivable "public purpose" [1].

The "public purpose" requirement is where eminent domain gets caught up in semantics. The government must be able to prove that the taking is beneficial to the public, but what counts as public use or advancing public interest? There is much ambiguity and difference of opinion on what is permissible as a "common good," particularly when the tradeoff is displacing people from their family homes.

Historic uses of eminent domain have focused on public works projects [5]. Rulings have also expanded the definition to allow condemnation of property to private corporations for public utilities like electric companies and rail transportation. Eminent domain has been used to establish parks, preserve historical sites, build infrastructure, and construct public buildings.

From its original application to facilitate public works projects to more modern expansions of its use -- such as the redevelopment of economically blighted areas, or acquisition of lands to construct pipelines to transport petroleum -- eminent domain law has become increasingly more complex [6]. The language surrounding the use of eminent domain to redevelop land -- particularly the classification of land as "blighted" or campaigns of "urban renewal" -- are highly subjective terms, meaning different things to the different parties involved. This can be seen in a current case developing in Racine County, Wisconsin, where eminent domain is being used to remove homeowners from their land to make way for Foxconn Technology Group, an electronics manufacturer, as reported by Rust Belt Magazine [7].

Commonly cited in the case against eminent domain is the Supreme Court's 2005 decision to uphold the Connecticut Supreme Court's earlier ruling in Kelo v. New London, where property earmarked for a redevelopment project came under scrutiny by some of the affected homeowners. While many were willing sellers, the remaining homeowners petitioned the court, claiming the action violated the "public use" restriction, as parts of the property would confer private benefits on a private party. When the developer failed to obtain financing, the land sat empty. In response to the case, a majority of states passed protective legislation to guard against similar outcomes, forbidding the taking of private property to transfer to a private entity for economic development.

Eminent domain raises many debates about the government's sovereignty and landowners' rights against encroachment -- what qualifies as a constitutional taking by the government, when is compensation necessary, and when has due process been violated?
Questions arise in cases where rezoning changes the legal use of property [8]. Residential property may be rezoned at the local level for commercial property, or upzoned to make way for new and often higher-income housing [9]. Property owners may even lose rights in their property if they do not conform to new zoning classifications in a set amount of time, in a process called "amortization" [10]. The historical meaning of the term, as opposed to its use in mortgage parlance, according to Black's Law Dictionary, is "to alienate or convey lands to a corporation" [1].

The Institute for Justice interprets this antiquated practice as slow-process eminent domain: "Under amortization, once it declares a business "nonconforming," the government gives the business a certain time frame to ostensibly earn back, or 'amortize,' its investment in the property. At the end of this period, the business owner must bring the property into compliance (even if it is not suited for the new zoning rules) or cease operation" [11]. The process "force[s] a transfer of the property to more attractive private owners" [11]. A recent case involved a Dallas, Texas automobile mechanic, whose business was threatened by the city's rezoning to remove automotive businesses, making way for a corridor to an arts district [11]. Unlike outright eminent domain, the process of displacement by amortization does not compensate property owners for their land.

There is relatively little that residential real property owners can do to combat condemnation by means of eminent domain, unless the taking is unconstitutional. If facing a case of eminent domain, consult a condemnation lawyer for advice, as each situation is unique.

[1] https://www.americanbar.org/groups/young_lawyers/publications/the_101_201_practice_series/primer_eminent_domain_takings_law_under_us_constitution.html
[2] Black's Law Dictionary, 7th ed.
[3] https://www.justice.gov/enrd/anatomy-condemnation-case
[4] http://castlecoalition.org/local-legislation-on-eminent-domain.
[5] https://www.justice.gov/enrd/history-federal-use-eminent-domain
[6] https://www.washingtonpost.com/news/volokh-conspiracy/wp/2016/06/07/the-growing-battle-over-the-use-of-eminent-domain-to-take-property-for-pipelines/?utm_term=.1058ef72babb
[7] http://beltmag.com/blighted-by-foxconn/
[8] http://realestate.findlaw.com/land-use-laws/land-use-and-zoning-basics.html
[9] https://www.citylab.com/equity/2017/01/new-york-city-has-been-zoned-to-segregate/514142/
[10] https://www.wsj.com/articles/no-property-rights-zonesno-property-rights-zones-1463178765
[11] http://ij.org/case/dallas-amortization/

Related Topics: | Eminent Domain |

June 6, 2018, Deeds.com - Information deemed reliable but not guaranteed, you should always confirm this information with the proper agency prior to acting. The materials available at this web site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. These materials are intended, but not promised or guaranteed to be current, complete, or up-to-date.

Real Estate Deed Information