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What Do I Need to Know About Eminent Domain?

| Oct 19, 2020 | Business Law, Eminent Domain, Land Condemnation/Zoning

Eminent Domain Essentials:

Eminent domain is the government’s “sovereign power” to take land from property owners who are unwilling to sell it voluntarily.  Many people unfortunately are shocked when this power is directed against them and their land, home, or business.   To add further insult to the injury, often what is offered by the government as “just compensation” seems very low in exchange for what is actually being taken. Most property owners fortunately are never hit with the issue of eminent domain. For that reason, it can feel bewildering if you find yourself served with papers saying that your property is being condemned. Here’s what you need to know if you are encountering eminent domain for the first time.

What is Eminent Domain?

Simply put, eminent domain is the power of a government to take private property without the property owners’ consent.[1] Both state and federal governments have the power of eminent domain; they may also delegate this power to others who perform “public purposes,” such as a public utility.[2]

However, in order to take private property, the government must provide the property owner with “just compensation.” This limit on the government’s power of eminent domain is found in the United States Constitution and the “Law of the Land” clause of the North Carolina Constitution. Although the North Carolina Constitution does not explicitly require “just compensation” for a government taking, the North Carolina Supreme Court has held that just compensation for property owners is a fundamental right and part of the “law of the land.”[3]

Is Just Compensation Always Just?

What the government considers just compensation may not be regarded as “just” by the person whose property is suddenly being seized. Property owners are supposed to be paid a “fair market value” for their property, but often determining what is a fair market value can be difficult if not impossible without a long and involved process.  Also, what if your other property not officially being “taken” is also harshly impacted?

The government entity taking the property has no interest in dragging it all out or in paying one cent more than they have to.  Further, they often use the same rather government friendly appraisers to set out the government’s claimed property value being offered.  Not surprisingly, many property owners don’t agree with what is offered by the government.

Our law firm’s later blog posts will discuss these issues in more detail, including when injustice is occurring and what to do about it.  However, owners can use different measures and methods in assisting them to find what is truly a “just” value.  Overall, there are different methods used to determine the value of a property and these include the market approach, income approach, and the cost approach.

How Does the Eminent Domain Process Work?

You might not find out that the government plans to take your property until it starts an action for condemnation.[4] “Condemnation” is the official name for the process by which the government exercises its eminent domain power.[5] However, the government may enter the land prior to filing an action in order to make surveys, borings, examinations, and appraisals.[6] When the condemnor files its action, it must deposit with the court the money it estimates to be just compensation for the taking.[7] The property owner may respond to the condemnation action and contest things like the exact area being taken and the value of the compensation.

Conversely, if the government takes or harms property without following the proper procedure, a property owner can file an action called “inverse condemnation.” Through inverse condemnation, a property owner forces the government to pay for the property it has taken, even if the government does not want to.

What if the Government Has Harmed My Property in Another Way?

A government taking is not always as straightforward as the construction of a road or structure on the property. A taking can involve “rights of access, rights-of-way, easements, water rights, air rights, and any other privilege that is intrinsic to the right to possess, use, or enjoy the land.”[8] Furthermore, a government can take private property through excessive zoning, but only if the owner has been lost virtually all beneficial uses of his land.[9] Maintaining a continuing nuisance is also a taking, for example, where a city erected an elevator water tank in violation of its own zoning laws, that due to its height and location, lowered the value of the property across the street.[10]

Eminent domain is an especially complex area of law, with many variables at play. If you are not sure whether the government has taken your property, or if you have been served with condemnation papers, you should seek the advice of an attorney with experience handling eminent domain cases. For advice tailored to your specific property and situation, you can call the law firm of Grimes Yeoman, PLLC. at (704) 321-4878 or contact us online.

[1] “Eminent domain” means the power to divest right, title or interest from the owner of property and vest it in the possessor of the power against the will of the owner upon payment of just compensation for the right, title or interest divested. N.C. Gen. Stat. § 40A-2.

[2] 2 Webster’s Real Estate Law in North Carolina § 19.01.

[3] See Messer v. Town of Chapel Hill, 125 N.C. App. 57, 479 S.E.2d 221 (1996).

[4] There are three different condemnation processes in North Carolina, depending on who is doing the taking. For this post, we are primarily discussing Art. 3: Condemnation by Public Condemnors. N.C. Gen. Stat. §§40A-40 et al.

[5] “The Ins and Outs of Inverse Condemnation,” Benjamin A. Mount and Emmett Boney Haywood, Trial Briefs (Dec. 2011).

[6] The condemnor is required to give 30 days’ written notice before entry. N.C. Gen. Stat. §40A-11. See also N.C. Gen. Stat. § 136-120 (applicable to the Department of Transportation).

[7] N.C. Gen. Stat. § 40A-41.

[8] N.C. Gen. Stat. § 40A-2.

[9] See Sherrill v. Town of Wrightsville Beach, 81 N.C. App. 369, 344 S.E.2d 357, cert denied and appeal dismissed, 318 N.C. 417, 349 S.E.2d 600 (1986).

[10] See McKinney v. High Point, 237 N.C. 66, 74 S.E.2d 440 (1953).