Can the United States government, your home state, or even a municipality take away your private property for public use? You may be surprised to learn that the answer is yes. In the United States, this power is called eminent domain.
Eminent Domain: the Basics
The Fifth Amendment of the United States Constitution explicitly grants the right to eminent domain. Essentially, private property is seized through a condemnation proceeding, which gives the property owner the chance to challenge the property seizure. Although this may be the first time you have heard of it, eminent domain cases are relatively common.
What Private Property is Subject to Eminent Domain?
Eminent domain applies to more than just land. Here are a few examples of other forms of private property subject to eminent domain:
- Investment funds
- Contract rights
- Intellectual property
The last few items on the list mean that the government could theoretically seize a private company and turn it into a public utility. Advocates are currently demanding they do this with internet and broadband companies.
There are several categories under which the government can determine whether it has a use for the property being seized. Each category falls under different stipulations regarding how the seizure, use, and compensation are executed.
Total taking (sometimes called complete taking) is when the government seizes the entirety of a piece of land. In these cases, the property owner is usually awarded compensation in accordance with the highest market value.
Partial taking is when a portion of a piece of land is taken. Because the property is being divided, partial taking can often be more complicated than total taking. This is because removing a portion of the property decreases its overall value. When engaging in partial taking, the government must weigh the value of the newly seized property and the value of the remainder.
Regulatory taking manifests in two forms: total regulatory taking and partial regulatory taking. Total regulatory taking occurs when a regulation renders a property unusable. Conversely, partial regulatory taking is when a regulation decreases a portion of a property’s overall value.
Temporary taking is just what it sounds like: the government takes a piece of property for a preordained time period. This form of taking can actually work in the owner’s favor, as the government will usually pay compensation during the period they are seizing the property. Temporary taking is particularly advantageous if the owner is having trouble leasing the property.
The Ins and Outs of Just Compensation
Just compensation is the amount the government determines to pay the owner for their seized property under eminent domain. The calculation method depends on what form of taking the government seizes the property under. The final total must align with the fair market value of the property.
Fair Market Value
When people complain about compensation awarded after a seizure via eminent domain, usually it is because the amount awarded adheres to fair market value. This type of valuation assumes the seller is not being forced to sell and the buyer is not being forced to buy. Given what we have established about eminent domain, we know this is not the case.
Protecting Your Property
After reading everything above, you may be wondering what you can do to protect your property from eminent domain. Unfortunately, your options are limited since government and public needs determine eminent domain. However, you can reach out to an attorney specializing in eminent domain cases. They may have options you did not consider.
Do you have legal questions pertaining to real estate or eminent domain? The Staten Island, NY, office of Merlino & Gonzalez is ready to help. Give us a call and schedule your consultation today.