Government Home Seizure For Private Economic Development

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 What is Eminent Domain?

Pursuant to the United States Constitution, the government is permitted to take and use property for a public purpose if they provide the landowner with just compensation.

In general, state and federal governments have delegated this eminent domain power to local municipalities or governments.

What is a Public Purpose for Eminent Domain Matters?

In order for the government to take private property under the power of eminent domain, it must show that the property will be used for a public purpose. In general, the government is provided with a lot of leeway regarding what constitutes a public purpose.

In addition, courts are typically unwilling to question the purpose the government has presented as the reason for taking the land.

What is Just Compensation in Eminent Domain Matters?

Pursuant to the Constitution, the government is not permitted to take an individual’s land or part of their land without just compensation. Just compensation means that the government is required to pay the owner for the land that they take and use for a public purpose.

What is a Pro Tanto Award?

Typically, after the government has determined that they are taking an individual’s land using eminent domain, it will appraise the property. The government will then send the owner a notice with a pro tanto award.

A pro tanto award is an offer on the property based upon the appraisal. The majority of individuals accept this pro tanto award, although they are not required to.

It may be helpful to consult with a real estate attorney to determine if an individual should accept or reject a pro tanto award.

How Can the Government be Stopped from Seizing Property?

A citizen can resist an action commenced by the government’s power of eminent domain by demonstrating that:

  • The condemned property will not be used to enhance the public good or for a public purpose; and
  • The just compensation offered as payment for the property is not sufficient.

If a property owner’s land has been condemned, they can dispute the public use requirement by demanding that the governmental agency that is seeking to take the property produce a resolution of necessity. A resolution of necessity is a document that explains why the individual’s property is required for the completion of a public project or for fulfilling the public purpose provided for seizing the property.

The explanation that the government provides in the resolution can then be disputed in court.

What if the Compensation Offered is Insufficient?

As previously noted, the compensation that is provided for the property seized by the government must meet the just compensation requirement. The Supreme Court of the United States, however, has held that just only means the market value of the property at the time of the compulsory taking.

An individual may still desire to contest the amount that is offered for the taking of the property, as a government agency will rarely offer the fair market value of the property on their first attempt at taking it. Therefore, negotiating with the governmental body can often lead to an increase in the amount offered for the taking.

It is important to note that if the eminent domain case goes to court, there is a chance that the judge or jury may decrease the amount of compensation that was offered by the governmental body. However, the opposite may also occur and a jury or judge may determine that a higher compensation is required to fulfill the just compensation requirement of a taking.

What is Government Home Seizure for Private Economic Development?

Pursuant to the U.S. Constitution, as noted above, the government can take and use property for a public purpose if they provide the landowner with just compensation. In a recent case, The U.S. Supreme Court held that local governments are permitted to seize an individual’s home or business for private development even against their will.

What were the Circumstances of this Case?

In this particular case, a group of residents in Connecticut had their homes slated for destruction to make room for an office complex. Although the city planned to provide these residents with just compensation for their losses, the residents did not wish to lose their homes.

These individuals brought a lawsuit arguing that cities have no right to take their land except for projects with a clear public use, such as roads or schools, or to revitalize blighted areas.

What was the Outcome?

In this case, the Supreme Court rejected the lawsuit of the residents, stating that local officials know best regarding deciding whether a development project will benefit the community. It held that, because the city had carefully formulated an economic development, the court believed the project would provide appreciable benefits to the community, such as new jobs and increased tax revenue.

In this case, the court held that those benefits outweighed the please of the residents to keep their homes. Before this case, a municipality could not seize an individual’s home for private economic development.

Cities now have more power to bulldoze residences for commercial projects, such as shopping malls and hotel complexes, in order to generate tax revenue. So long as a city can show that they carefully crafted such plans to generate tax revenue or create more jobs for the community, they have much broader eminent domain power.

What Alternatives Exist to Eminent Domain?

Throughout the U.S., landowners, developments, and local governments have found several alternatives to eminent domain. Examples of common alternatives to eminent domain actions include:

  • Negotiated purchases: Instead of initiating an eminent domain action, the government or developer and property owner may simply meet and contract a sale of the property in question;
  • Leases: In lieu of purchasing or taking the property, the private parties may meet and agree to a lease where the existing property owner rents the property to the other party;
  • Joint ventures: A joint venture provides a property owner with the opportunity to make a greater profit for the use of their land by participating as a co-developer on the project; and
  • Land swaps: In some cases, a developer can purchase another piece of property that the landowner is interested in and then they can swap the two properties. Trading a piece of land or property for another of similar value is another way of preventing an eminent domain action.

Do I Need an Attorney for an Eminent Domain Issue?

If you are facing an eminent domain taking of your property, it may be helpful to consult with a real estate lawyer. Your attorney can advise you regarding the eminent domain process, the procedural rules the government must follow, and the potential outcomes in your case.

Your lawyer can help you negotiate with the government to obtain a proper award for your property. Although the government is now permitted to use its powers of eminent domain to justify seizing property for economic development, your best chance at fighting against these types of proceedings is to retain an attorney.

An experienced real estate attorney can research the reason the government provided for seizing your property and determine whether you may be able to contest the proceedings based upon the government’s motive.

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