Both federal and state governments have the power to take private property for public use when necessary or beneficial.
Private property includes your house, land, and business. When the government decides to take private property it must only give you, the property owner, "just compensation." (This is stated in the Fifth Amendment and is known as the takings clause.)
What does condemned mean?
"Condemnation" is when the government physically takes your property. Perhaps because it is "unfit for human habitation" or perhaps because the property is the best location for a school. "Taking property" also includes, for example, if the government passes laws that forbid construction on coastal property for environmental reasons. If you bought a large parcel of land and planned to build condos or a hotel there, then the government must compensate you because you now have no economically viable use of that property. (See Lucas v. South Carolina as an example).
Blighted property: Eminent domain abuses
Most people who have lived a decade or longer in Southern California remember when properties were deemed "blighted' as a way for the city to take it and turn it into a money maker. This "fiscalization of land use" was for a while epidemic. While we do not see as much abuse these days there are certainly cases where the property owner is not being given fair compensation.
Reason the government takes property
Some examples of why the government may take private property are to build a school, water tower, road, library, police or fire station or railroad. The government may also take property to:
- Alleviate unemployment
- Stimulate the local economy
- Preserve scenery
- Stop a professional football team from leaving (Oakland Raiders)
Once your property is cited as necessary for the government to have, you will receive an assessment of the value by an appraiser.
How an appraiser determines value
An appraiser determines your property's value based on "fair market value." This fair market value however may not be a comprehensive assessment. The appraiser may be skilled and fully versed as to what properties or businesses like yours are worth, or, he or she may not have had extensive experience appraising a property such as yours. In a very rare but worst case scenario the company doing the appraisal could have a financial interest in your property!
What to consider in determining fair market value
The appraiser's "fair market value" may not take into consideration the true value of your property or land-- both the current and future value. For example if you use the land to graze your herd of sheep, you will lose that asset and money. Or if you planted a vineyard that is projected to earn six figures when it matures then this future income must be taken into consideration and you must be compensated for that loss.
Your recourse as a property owner
Do you have to accept the deal the condemning agency offers? The shorts answer is no. You have options. You can:
- Counter offer
- Claim that your property is worth more and provide compelling evidence
If your land is not accurately assessed you may need to enlist the help of an attorney who works in eminent domain to ensure that you receive an accurate assessment and to prove what your property is truly worth.