Yes, there are some situations in which a state or local municipality may be permitted to take control of private property. Common examples of situations in which a seizure of property may occur includes:
- Condemned property, also called a taking, which occurs when the government takes control of the land to convert it for public use. It also includes situations where government regulation has rendered a plot of land economically useless;
- Judicial lien, which occurs when a government takes the title of land or property under a lien. This commonly occurs in cases which involve foreclosure resulting in judicial sale of property;
- Tax seizure, which occurs when the title to a property is lost due to the failure to pay taxes;
- Seizure for private economic development, which occurs when property is be seized for the purpose of assisting in certain private development projects; and
- Civil forfeiture, which occurs when the government seizes property when the property is involved with the commission of a crime. Because the property is being seized and the property owner is not being sued, none of the rights such as just compensation, due process, or punishments are triggered.
With the exception of civil forfeiture, whenever a government initiates a taking, such as with a private taking or condemnation, they will be required to provide just compensation to the landowner. In cases of tax seizures and liens, the property is typically sold in an auction.
What is Condemnation of Property?
Condemnation is a process in which private property is taken for a public use. Prior to a taking, the property is considered condemned property.
Being condemned means that the property has been marked for modification or destruction so that the plot of land may be used for public use.
An example of a property being condemned would be when a residential home or homes are cleared to make way for a wildlife reservation. In this type of example, a home is condemned so that the land can serve the public use of a more natural environment.
Who May Condemn Property?
Pursuant to the Takings Clause of the United States Constitution as well as the principle of eminent domain, the government is permitted to take private property for the purpose of public use. The government, however, is required to reimburse the property owner with just compensation for the losses incurred due to the loss of their property.
A private entity, which may include corporations or charities, are also permitted to condemn property if it will be used for public use. The entity who takes the property must fairly and justly compensate the owner of the property for the taking.
Private condemnation of property, however, is somewhat rare. This is because the majority of private entities will obtain property for private use rather than public use. A taking for a public purpose is more commonly executed by a Federal entity or a state entity.
What Constitutes a Taking?
A taking by the government which results in the condemnation of private property is defined as:
- Physical occupation or confiscation of private property; and
- Government regulation which results in no economically viable use of the land.
If the occupation of a property advances a substantial government interest, a taking does not occur. This may include preserving natural resources.
In addition, the owner of the property may not be entitled to just compensation if the occupation of the property does not result in any fundamental change in the ownership of the property.
What is Just Compensation and How is this Calculated?
Just compensation is the amount of money which the government is required to pay the property owners for the condemnation of their property. This amount is usually measured in terms of loss to the property owner, not by the government’s gain.
The amount of loss for the property owner is measured according to the fair market value standards at the time the taking occurs. In certain court opinions, the process of calculating just compensation includes a determination of the value of the property at the time of its condemnation and before the public usage began.
After this step, the court attempts to estimate the value of the property after the public use is applied. The difference between these two figures will provide the approximate amount of just compensation.
What are the Remedies for an Unjust Taking or Condemnation?
When determining whether a property is eligible to be condemned, the government weighs the social value of the project versus the amount by which the property will be diminished. If the court concludes that the loss a property owner will suffer is small compared to the social value of the property, the condemnation will typically be granted.
On the other hand, if the court determines that the amount of loss outweighs the value of the property to the public as a whole, the government will not be permitted to take the property. If a property owner feels that the balancing test which was applied was unjust or faulty, the property owner may be entitled to one of the following remedies:
- Allowing the government to proceed with the project and obtain just compensation through a post-deprivation hearing; or
- Seeking an injunction to terminate the project, while the government pays for any losses which result from the project.
Resisting condemnation proceedings may, in some cases, be challenging. A property owner may need to prove that their losses would outweigh the benefits that would be provided to the public.
This may be accomplished by using a variety of factors, including:
- The uniqueness of the property;
- If the property has sentimental or historical value; or
- If the property would be difficult to replace.
Does a Lease Terminate When a Building is Condemned?
Leases are legal agreements which are entered into when individuals, known as tenants, rent property from an owner, known as a landlord. Residential leases are signed when property is used for a residential purpose, such as living in.
A lease agreement typically contains terms and conditions of a lease, including the date when the lease expires and the amount of rent a tenant is required to pay. A lease agreement will also outline the legal rights and responsibilities of the landlord and tenant.
If a property is completely condemned, it will terminate a lease because there will be no remaining housing for a tenant to live in. Pursuant to laws regarding condemned residences, a condemnation terminates a tenant’s liability for rent after the title to the property vests in the condemning entity, which is usually a local government or housing authority.
Do I Need a Lawyer for Issues with Condemned Property?
It is essential to have the assistance of a real estate lawyer for any issues, questions, or concerns you may have with condemned property. If you believe that your private party has been marked for condemnation, you should contact an attorney as soon as possible in order to determine your rights.
Your attorney can assist you with showing that the property is not being taken for public use or that you have not been offered just compensation for your losses associated with the taking of your property. They can advise you regarding the numerous federal and state laws which govern condemnation and eminent domain and how they may apply to your case.
