Eminent domain occurs when the state takes an owner's real property for public use. The process is called condemnation. This seems unusual to many. Why, they ask, can the government take my property? It's not that simple and there are safeguards in place to protect an owner facing condemnation.
A brief history of this process is helpful. The U.S. Constitution provides safeguards against government taking our property.
- The Fifth Amendment states that the Federal Government cannot deprive individuals of "life, liberty, or property," without due process of law.
- The Fourteenth Amendment forbids states from denying any person "life, liberty or property, without due process of law."
Article 3, Section 40 of Maryland's Constitution also includes safeguards:
- there is no taking of private property for public use without just compensation,
- the private property must be appraised and the fair market value determined,
- these matters may be submitted to a jury, and
- there can be an immediate taking for certain needs such as roads and right of ways.
With this brief overview, you can see how complicated eminent domain and condemnation cases are. Many questions arise. What is a "public use?" Who determines the "fair market value?" How does an "immediate taking" work? Should an owner contest a proposed condemnation? How much will it cost? Can the state take only part of the property? What if there is a lease in effect? What does "due process" require? Should an owner settle or fight a proposed condemnation? Will a displaced owner be paid relocation expenses or reimbursed for financial losses incurred because of a condemnation?
Each case in unique and factually specific. This article does not attempt to and cannot provide absolute answers to the many possible scenarios. However, the following tips can be helpful for a property owner dealing with this situation.
First, the state can establish the "public use" requirement, making this difficult to challenge. Nevertheless, a property owner in this situation should beware of the following potential issues, among others:
- A property owner must be given proper notice of the proposed condemnation. This includes advance notice (except in cases of immediate condemnation noted above).
- Except for immediate condemnation cases, an owner has a right to request a jury trial. For example, a jury trial may be requested on specific issues such as fair market value. Owners also have appeal rights.
- Once a property has been condemned, an owner is entitled to damages. Damages can be awarded for the taking of an entire tract of land or where part of a tract is taken, for the fair market value of the part taken.
- The value of condemned property is critical to an owner. The state must provide evidence, including a written appraisal of the fair market value of the property performed by a qualified impartial appraiser. An owner can also present appraisal evidence or can rely on the assessed value of the property as determined by the State Department of Assessment and Taxation.
- There are special considerations if the property being condemned is a dwelling. An owner or occupant of a dwelling may be entitled to additional compensation for the reasonable cost of a replacement dwelling, or other increased interest costs and other debt service costs a person is required to pay for financing any comparable replacement dwelling. Also, moving and relocation expenses must be paid to a displaced person.
- If the property owner prevails, the state must pay courts costs in a condemnation proceeding, including an allowance for reasonable legal, appraisal, and engineering fees. In addition, the owner may be entitled to interest on damages at the rate of 6% per annum. An owner is also entitled to receive a credit for taxes paid before the property was condemned.
- An action for condemnation must be brought within 4 years of the authorization to administratively or legislatively acquire the property. This period can be renewed by a new authorization.
An owner facing condemnation is wise to retain an attorney at the inception of the proceeding to help with the complicated issues along the way. Experienced counsel can untangle the complicated issues and focus on maximizing an owner's damages. This can make the whole process, which is understandably something most people would rather not face, more successful.