The Woodward News

August 6, 2010

From the Publisher: Lesson on eminent domain

Rich Macke
Woodward News

Woodward, Okla. — Recently there has been a lot of focus on “Eminent Domain” and how it pertains to individuals not only here, but all over the nation. During conversations I have had with folks around town, I get the impression that not everyone has a full understanding of what “Eminent Domain” really is and does. Hopefully this can shed a little light on it.

 What is Eminent Domain

Eminent domain refers to the power possessed by the state over all property within the state, specifically its power to appropriate property for a public use. In some jurisdictions, the state delegates eminent domain power to certain public and private companies, typically utilities, so that they can bring eminent domain actions to run telephone, power, water, or gas lines. Under the Fifth Amendment to the Constitution, the owner of any appropriated land is entitled to reasonable compensation, usually defined as the fair market value of the property. Proceedings to take land under eminent domain are typically referred to as "condemnation" proceedings.

The Process of Eminent Domain

Usually, when a unit of government wishes to acquire privately held land, the following steps (or a similar procedure) are followed:

1.The government attempts to negotiate the purchase of the property for fair value.

2.If the owner does not wish to sell, the government files a court action to exercise eminent     domain, and serves or publishes notice of the hearing as required by law.

3.A hearing is scheduled, at which the government must demonstrate that it engaged in good faith negotiations to purchase the property, but that no agreement was reached. The government must also demonstrate that the taking of the property is for a public use, as defined by law. The property owner is given the opportunity to respond to the government's claims.

4.If the government is successful in its petition, proceedings are held to establish the fair market value of the property. Any payment to the owner is first used to satisfy any mortgages, liens and encumbrances on the property, with any remaining balance paid to the owner. The government obtains title.

5.If the government is not successful, or if the property owner is not satisfied with the outcome, either side may appeal the decision.

Takings

There are several types of takings which can occur through eminent domain:

Complete Taking - In a complete taking, all of the property at issue is appropriated.

Partial Taking - If the taking is of part of a piece of property, such as the condemnation of a strip of land to expand a road, the owner should be compensated both for the value of the strip of land and for any effect the condemnation of that strip has on the value of the owner's remaining property.

Temporary Taking - Part or all of the property is appropriated for a limited period of time. The property owner retains title, is compensated for any losses associated with the taking, and regains complete possession of the property at the conclusion of the taking. For example, it may be necessary to temporarily use a portion of an adjacent parcel of property to complete a construction or highway project.

Easments and Rights of Way - It is also possible to bring an eminent domain action to obtain an easement or right of way. For example, a utility company may obtain an easement over private land install and maintain power lines. The property owner remains free to use the property for any purpose which does not interfere with the right of way or easement.

Fair Value

Fair value is usually considered to be the fair market value - that is, the highest price somebody would pay for the property, were it in the hands of a willing seller. The date upon which the value is assessed will vary, depending upon the governing law. If the parties do not agree on the value, they will typically utilize appraisers to assist in the negotiation process. If the case is litigated, both sides will ordinarily present expert testimony from appraisers as to the fair market value of the property.

Just Compensation

At times, fair value includes more than the price of an item of property or parcel of real estate. If a business is operating from the condemned real estate, the owner is ordinarily entitled to compensation for the loss or disruption of the business resulting from the condemnation. In a minority of jurisdictions, the owner may also be entitled to compensation for loss of "goodwill", the value of the business in excess of fair market value due to such factors as its location, reputation, or good customer relations. If the business does not own the land, but leases the premises from which it operates, it would ordinarily be entitled to compensation for the value of its lease, for any fixtures it has installed in the premises and for any loss or diminishment of value in the business.

Public Use

Ordinarily, a government can exercise eminent domain only if it’s taking will be for a "public use" - which may be expansively defined along the lines of public "safety, health, interest, or convenience".

Eminent Domain has a very long standing history in the United States. Growth of our nation would have been limited at best without it. No railroads, No electricity and power lines, No highways, the list goes on! Where would this country be without “Eminent Domain”?



Rich Macke is publisher of the Woodward News.