Understanding Eminent Domain: A Comprehensive Guide

What is Eminent Domain?

Eminent domain is the term for the power of the government to seize private property for public use, with just compensation provided to the property owner. This power is limited by the Fifth Amendment of the U.S. Constitution, which states that private property cannot be taken for public use without just compensation. The government exercises eminent domain to acquire land for purposes such as building highways, public schools, or other public infrastructure projects.

The most important thing to note is that, while the government has the authority to take private property for public use, the exercise of eminent domain has to be done in accordance with due process of law, and the property owner is entitled to receive fair market value compensation for their property. In some cases, the property owner may challenge the taking of their property in court.

Importance of These Concepts in Property Law

Property law encompasses a wide range of legal doctrines and rules that govern the ownership, use, and transfer of property. Eminent domain is one topic within this broader domain of the law that deals with the government’s power to take private property. The legal framework governing eminent domain varies from state to state and from federal law, but in general, it is a legal principle recognized as part of property law. The use of eminent domain involves legal issues such as compensation for the property owner, public necessity, and the scope of the government’s power to take property.

Definition of Eminent Domain

The legal basis for eminent domain is the Fifth Amendment of the US Constitution. It provides that “nor shall private property be taken for public use, without just compensation.” This clause is known as the Takings Clause and is the foundation for and limitation on the government’s power of eminent domain.

Key Historical Eminent Domain Cases

The Takings Clause has been an issue in numerous legal challenges and court cases throughout U.S. history. Courts have balanced the public’s interest in using private property for public purposes against the rights of property owners to be fairly compensated for their loss. Thus, the law of eminent domain has evolved over time through legal precedent and statutory law and is complex.

Kelo v. City of New London

In 2000, the city of New London approved a development plan “projected to create in excess of 1,000 jobs, to increase tax and other revenues, and to revitalize an economically distressed city, including its downtown and waterfront areas.” In assembling land for the project, the city purchased the property from willing sellers and wanted to use eminent domain to acquire the remainder of the property from unwilling owners in exchange for just compensation. The Court had to decide whether the city’s disposition of property qualifies as a “public use” within the meaning of the Takings Clause, which it did in a 5-4 opinion.

Hawaii Housing Authority v. Midkiff (1984)

In the ’60s, the Hawaii legislature discovered that 47 percent of land in the state was owned by only 72 private landowners. To combat this concentration of ownership, it enacted the Land Reform Act of 1967. The Act provided for redistribution in which title in real property could be taken from lessors and transferred to lessees. The Court upheld deference to state legislators and decided that merely because the property taken by eminent domain is transferred to private beneficiaries does not condemn that taking as having only a private purpose.

Process of Eminent Domain

First, the government must identify a public purpose, one of the requirements of eminent domain. The two cases above discuss public purpose, and other examples include cities and local agencies buying blighted property to improve it with government or private developments.

Next, the government is required to pay the private landowner adequate compensation for the land taken. The government agency will try to negotiate with the property owner to acquire the property consensually. The government agency will typically order an appraisal of the property to determine its fair market value. It will offer a fair market value for the property.

Legal Procedure for Condemnation

If the property owner rejects the government’s offer, the agency may file a complaint in state court to initiate the eminent domain process. The court will then conduct hearings to determine whether the government’s use of eminent domain is legal and whether the compensation offered is fair. Both parties will have the opportunity to present evidence and craft arguments. This is a role where experienced counsel can make compelling arguments and ask for attorneys fees from the government to cover the costs of the lawsuit. 

Regulatory Takings and Penn Central Test

In this 1978 case, the owners of Grand Central Terminal in New York City challenged a landmark preservation law that deeply restricted their ability to develop their property. The Court ultimately upheld the law and set out the Penn Central test as a means to evaluate the constitutionality of regulatory takings. The Court would look at economic impact, the character of government action, and the owner’s bundle of rights.

Protecting Your Private Property and Estate Assets is Our Specialty

The government can taketh and give away.  Our lawyers and staff have a personal interest in preventing unfair government action and making sure that your assets are protected. We have counseled many clients who have had eminent domain and regulatory takings threaten their property. If you find yourself or your business confronted with these issues, we are happy to assist by answering your questions and providing legal advice.

We are happy to get involved to protect you from unwanted interference in your property rights. Call the trusted attorneys at Lowthorp Richards at (805) 981-8555 or fill out our online contact form. We operate primarily in the Tri-Counties area  – Ventura, Santa Barbara, and San Luis Obispo.

NOTE: The information contained herein is not intended to be legal advice and the reader should know that no Attorney-Client relationship or privilege is formed by the posting or reading of this article which is also not intended to solicit business.

Cristian R. Arrieta, Lowthorp Richards McMillan Miller & Templeman, A Professional Corporation, 300 E. Esplanade Drive Suite 850, Oxnard, CA 93036