- What is the power of eminent domain? What is condemnation? The power of eminent domain entitles governmental entities to take private property and convert it to public uses, such as highways, public transportation and
schools. Governmental entities exercise their power of eminent domain through
condemnation, which is the legal process for the taking of property.
2. Who has the power of eminent domain?
The power of eminent domain resides in federal and state governments. The
federal and state governments can delegate the power to lesser entities, such as
counties, cities, transportation districts, water districts and school districts. In some
instances, the government can delegate its power of eminent domain to private entities,
such as railroads and utilities. For simplicity, this Handbook will refer to governmental
takings of property, though the procedures applicable to takings by private entities are
generally the same.
3. How much of my property can or must the government take?
The government can take only as much property as it can justify for the
particular public use. Similarly, it is not required or permitted to acquire a whole parcel
of property if only part of the parcel is necessary for the public use.
4. What is an acceptable public use? Who decides?
The United States Supreme Court has defined what is an acceptable public use
very broadly to encompass not only traditional public uses such as roads and schools,
but also economic development—i.e., taking property from one private owner and then
conveying it to another private owner for the purpose of developing the property in
accordance with the development goals of the government. Most states, including
Oklahoma, have narrowed state law on what is an acceptable public use. Ultimately, a
judge may be called upon to decide if the desired use of the property by the
government meets the public-use standard.
5. What is just compensation?
When the government takes private property for a public use, it is
constitutionally required to pay the property owner “just compensation” for the
property. Just compensation embodies the fundamental idea that one private property
owner should not shoulder an unfair share of the burden of providing for public uses.
6. How is just compensation determined?
Just compensation is the amount of money necessary to make whole a property
owner for the taking of his or her property. This amount is determined by the fair
market value of the highest and best use of the property taken by the government, plus,
in the case of a partial taking, the reduction in fair market value to the remainder of the
property. For example, if the government takes part of your property for a highway
project, it must compensate you for the property it physically took, as well as for the
diminished value of your remaining property based on its proximity to a highway.
7. What is fair market value?
In normal market conditions, fair market value is generally defined by what a
willing buyer would pay a willing seller for the property at the time of the acquisition
or taking.
8. What is highest and best use?
The highest and best use of real property is the most profitable use of the
property. It can be a use other than the current use of the property if it is reasonably
probable that the property has an actual potential for a higher and better use. For
instance, if the property currently has a residential structure on it but, under current or
reasonably imminent zoning laws, it could be developed as a retail shopping center,
redevelopment as a retail shopping center is most likely its highest and best use.
9.What is included in the determination of just compensation? What is
not included?
In the typical condemnation matter, in which the government is taking the whole
or part of a parcel of real property, you are entitled to just compensation for: (1) the real
property taken and the effects to remaining real property; and (2) fixtures (personal
property that is considered part of the real property). You may also qualify for just
compensation if the government takes from you permanent or temporary easements, or
deed restrictions.
On the other hand, a property owner is not typically entitled to just
compensation for: (1) private property that can be removed from the real property; (2)
the costs of relocating a home or a business; and (3) loss in value to business—i.e., the
value attached to a business being in the same place for 20 years, reduced revenue, etc.
Certain relocation and business reestablishment costs, however, qualify for
“reimbursement” under federal and state law.
10. . Who determines just compensation?
The government will typically employ an appraiser to render an opinion of value
of the property it intends to take. This is usually the basis for the government's initial
“offer.” The property owner will also typically employ an appraiser, in addition to
formulating his or her own opinion of value.
The final amount of just compensation may be reached either in pre-trial
negotiations or after a jury renders its verdict. In the latter case, subject to a judge's
instructions on the law, the jury will have the final say as to what constitutes just
compensation for private property.
Call Hayes Legal Solutions, PLLC at 405-635-5578 for any questions you have about the Eminent Domain process.
