The Government Wants Your Land…What Are Your Rights?
August 8, 2016
Government projects to build or expand roadways, erect public buildings, and install infrastructure, such as sewer, water and electrical lines, all require land. So long as building projects meet certain requirements, including benefiting the public, government agencies have the constitutional right to acquire the necessary land in order to complete these projects. Recognized public uses include the building of schools, correcting drainage issues, and improving blighted areas.
What Is Eminent Domain and Condemnation?
The right or power to acquire the land is referred to as “eminent domain.” When the government exercises its right by taking private property for public use, the procedure is known as “condemnation.” Although the property may be taken by federal, state, and local governments, full and fair compensation must be paid to the Landowner. The power to take land for public use, and the limitations placed upon that taking, are provided for in the United States Constitution, the South Carolina Constitution, and the South Carolina Eminent Domain Procedure Act. It is important for Landowners who may be affected by such projects to be informed of their rights.
Can You Stop Your Property From Being Condemned?
Private property may be condemned only if the condemnor (entity taking the property) is able to prove that the taking would be a proper exercise of the power that entity has to take, and that the taking is necessary to further the intended public use. The project should be designed to enable the greatest public use resulting in the least private injury.
If the Landowner wants to stop the taking, the Landowner must file a Challenge Action with the court. The Condemnor will then have to prove the requirements, listed above, in order for the court to enforce the condemnation. If the Condemnor is successful in proving the validity of condemnation, however, the Landowner may be responsible for the attorney’s fees and costs of the Condemnor. If the Landowner is successful in the Challenge Action, however, the condemnation will be stopped and the Condemnor may be responsible for attorney’s fees and court costs of the Landowner. The Challenge Action is not to be used to gain leverage to increase the amount of compensation paid for the property. Rather, it must be in response to an actual dispute over whether the Condemnor is acting with a reasonable basis in taking the property.
What Should You Do Before Your Property is Condemned?
A Landowner may discover their property is in the process of being taken in a number of ways. The Landowner may read a news article or see an advertisement about the proposed project. Neighbors may be discussing information they have received regarding condemnation of their property. The Condemnor might hold a public hearing to discuss the scope and location of the project. It is important to remember that government projects require an opportunity for public input. Getting involved with the debate early on can have an impact on the end result.
Once Landowners discover the possibility of their land being condemned, it is most beneficial to consult a knowledgeable attorney to discuss what options are available to challenge the condemnation action or obtain just compensation. Before consulting an attorney, the Landowner should avoid any discussions with the Condemnor, either oral or written. Also, avoid providing any information or documents, as information provided to the Condemnor may be used against the Landowner in the negotiation process. In the time leading up to the condemnation, the property should be continually maintained. The visual appearance, condition, and uses of the property are all factors to be considered in the appraisal process. Photographs should be taken as early as possible to have a record of the appearance and status of the property prior to the public project.
Generally, written notice is provided to the Landowner with an offer to purchase their property prior to filing an official condemnation action. If the other is rejected, or not responded to, the Condemnor will serve the Landowner with a Condemnation Notice. The Condemnation Notice will contain the Condemnor’s allegation of what amount of money would constitute “just” compensation. There is a 30-day period after service of the Condemnation Notice for the Landowner to give written acceptance of the offered amount. A failure to respond to this Notice constitutes a rejection, at which time the Condemnor may file the Notice with the court. There are good reasons, however, to have an attorney file a formal response to the Condemnation Notice. The amount of just compensation offered in the Notice must be deposited with the court at the time of filing and the Landowner can “draw down” (be paid) the amount deposited with the court while challenging the fairness of the offer. If the Condemnor has followed this process, they can then serve written notice on the Landowner and proceed to take possession of the property or interest.
How Do You Get “Just” Compensation For Your Property?
A Landowner and Condemnor are required to make reasonable and diligent efforts to negotiate an agreement before a condemnation action can be instituted with the court. The Condemnor will retain an appraiser to value the property. There are three approaches an appraiser will use to determine what amount will be offered to the Landowner for their property. In the Market or Sales Comparison Approach, the appraiser considers sales of similar properties to determine value. In the Cost Approach, the appraiser considers what it would cost to replace any existing structures on the land. In the Income Approach, the appraiser considers all income streams being generated by the property. Generally, the Income Approach is the key component of determining compensation for business entities impacted by taking all or part of their property. The appraiser considers the current condition of the property, not the value of the property as a result of the proposed project. This fact-intensive inquiry is calculated based on the property’s highest and best use. The highest and best use may not be the current use, but it is whatever use would bring the most value to the property. The highest and best use to be considered will be the use that is physically possible, legally permissible, economically feasible, and maximally profitable. This is an issue that is often at the center of disputes over what constitutes “just compensation.” CAUTION: The appraisal of property is not an exact science. Appraisers can disagree, sometimes significantly, on what constitutes “just compensation” for a particular piece of property.
Following the appraiser’s estimation of the value of the property, the Condemnor is then provided with the written appraisal report that is used as the basis of any offer and negotiations. The Landowner should always request a copy of the appraiser’s report. Landowners affected by the proposed condemnation are entitled to the fair market value of the property or interest taken, as well as any damages to the remaining property caused by the taking and construction of the project, less any benefits the remaining property will gain from the project. If the Landowner is unsatisfied with the offer and result of negotiations, they may request a jury trial. If the parties agree to forego a jury trial, the amount of just compensation can be determined by a Judge or Special Referee. Although rarely used, the Condemnation laws allow just compensation to be determined by a panel of appraisers.
Can You Receive Money In Addition To Fair Market Value Of The Property?
Landowners can be entitled to additional damages, including relocation assistance and attorney’s fees and costs. “Cost to cure” is the amount of money necessary to remedy damage to the Landowner’s remaining property after the condemnation. Relocation assistance is provided to residential and non-residential displacements. Residential displacement assistance may include moving and related expenses, as well as replacement housing. Non-residential displacement assistance may include moving and related expenses or a fixed moving expense payment, reestablishment expenses, and other costs related to obtaining a new business location. The Condemnor may also be responsible for moving fences, gates, mailboxes, and other items. These additional damages are generally negotiated during the acquisition of property. They are not part of the trial on just compensation, but must be appealed to the Condemnor if there is a disagreement over the proper amount. If an agreement cannot be reached, the matter may be resolved by the courts.
If You Hire An Attorney, You May Be Able To Recover Your Legal Fees
An attorney experienced in condemnation matters can play a valuable role in the process. In addition to guiding you through the condemnation process and advising you of your legal rights and remedies, a qualified attorney can:
- Assist with retaining experts who have credibility with the condemning authority and who are comfortable with providing court testimony;
- Make court appearances and assist with out of court dispute resolution alternatives such as mediation and arbitration; and
- Negotiate on your behalf with the Condemnor.
If your case goes to court, and you are the “prevailing party,” the court has the discretion to require the Condemnor to pay your reasonable attorney’s fees and costs.
Attorney Paul Dominick wrote this article as a summary of certain issues that arise in condemnation actions. Paul does not intended for it to legal advice for any specific matter, or exhaustive of the rights and remedies of Landowners.