What eminent domain means to you as a property owner
The first question that property owners usually ask about Eminent Domain is, “Can the government take my property when I don’t want to sell it to them?” The short answer is yes. For centuries, it has been the legal right of a sovereign government to take the property of its citizens. Governments around the world have taken the private property of its citizens for a number of reasons ranging from public benefit to political favors. But, beginning with the Magna Carta in 1215 and expanded by our founding fathers in the U.S. Constitution, the individual citizen has been guaranteed certain property protections.
The Fifth Amendment of the United States Constitution states “…nor shall private property be taken for public use, without just compensation.” The two main questions that have come from this are:
- What is public use, and
- What is just compensation
Let’s go back to our example above. You own an acre of land and the DOT decides to put a road through it, is that public use? What about if they put a school on it? What about a shopping mall?
“Public Use” in eminent domain
Public use may sound pretty obvious, but it is actually quite nuanced. While we usually think of a road like I-40 or a state park as being available for the public to use, but public use can also refer to something such as a pro football stadium (See Mercedes-Benz Stadium, Atlanta, GA where the city demolished two churches and dozens of homes to create the stadium) or for economic re-development.
In the highly controversial Kelo v. City of New London (2005), the United States Supreme Court determined that the city could take the houses of private citizens and transfer the property to a private owner for development. They determined it was public use because there was a general public benefit of economic growth to the community. After this case, the houses were demolished and the developer was unable to find financing, leaving the property as an undeveloped empty lot. If there is any consolation to this, it is that the homeowners were required to be given just compensation for the property.
“Just Compensation” in eminent domain
But what does the phrase “just compensation” actually mean? What you think your property is worth and what the government thinks your property is worth are usually at odds with each other. So the real question becomes: what is your property legally worth.
Over the years, courts have determined the legal worth is the Fair Market Value or what a willing seller and a willing and knowledgeable buyer would agree upon as a fair price. As you may have noticed, that isn’t exactly a scientific formula. It’s important to note that, unfortunately, a jury can’t consider things like sentimental value, how long you’ve owned the property, or the headache the government is causing. They may, however, take into consideration your new roof, that you’ve redone your kitchen, or that you just replaced your septic system. This critical point is where you will find an experienced attorney to be most helpful.