Last Updated on February 23, 2023 by Awais Aftab
Condemnation refers to a process in which the government takes possession of private land or property for public use or economic development. For example, a town or a city may want to expand or improve infrastructure or buildings, which requires the use of the private property to the full or partial extent that is necessary.
Real estate and the fifth amendment
According to the Fifth Amendment, the government has the right to take private property to use for its purposes through eminent domain. However, the current owner of the land or property must still receive “just compensation,” according to the Constitution.
The process of condemnation
Although state laws vary, the process of condemnation generally proceeds as follows:
- The government or government agency identifies private property or private lands they want to use for the public good or economic development.
- During the appraisal process, the value of the property is determined. A pro tanto award is the government’s partial payment to the owner as compensation.
- Both sides must appear if the owner refuses to sell at a court hearing. Once the owner replies, they can explain their position.
- The court decides as to whether the condemnation is allowed. Parties may appeal the court’s decision if they are not satisfied with the outcome.
Even though the property owner is not likely to challenge the condemnation process as a whole, they might be able to argue for higher compensation. A property owner should consult an appraiser and an attorney to determine the property’s worth. The court, however, will only consider the fair market value of the property and not sentimental value or other personal values that the owner might choose to believe.
The condemnation process is not slowed down if the owner challenges the offered compensation. Many states have “quick take” laws that allow the government to start construction projects quickly. So as soon as possible, the prize will be rewarded so the title and ownership of the property can be transferred. Delays could result in lower property values, which would be detrimental to the property owner in the long run. Avoid foreclosure and get a cash offer for you house.
Kinds of condemnation
There are different kinds of condemnation; not all of them involve public property. Whenever there is a housing shortage in a community, the city or town might use eminent domain to secure properties to build more housing, such as apartment complexes and condos.
A condemnation proceeding does not always result in the seizure of the entire property, nor is the take permanent. For instance, a government might seize part of an owner’s land to widen a road, the owner can still live on their land, but the government compensates them for it. The property owner may not be fully transferred as there might only be an easement; for example, construction crews need to access private property to install plumbing for the new building.
An urban or government agency may condemn unkempt or deteriorating properties so that the blight can be removed and the community can be revitalized. The property might be seized by eminent domain without the owner’s consent. Property owners can avoid condemnation in this situation by taking care of their properties and land.
Eminent domain versus inverse condemnation
The government might someday come knocking at your door to take your property if you own real estate. The state may take it outright or do something that effectively takes your property. These two approaches have similarities and differences, with inverse condemnation and eminent domain.
Read more: What Is Accretion In Real Estate? Facts You Need To Know About Accretion Real Estate
1. Eminent Domain
Whether we like it or not, forcing the private property to be sold for public use has long been a sovereign power of government. Eminent domain is another term for it. In both California and the United States, this power is paired with an obligation for the government to pay “just compensation” for the property.
In both cases, the government initiates the process. It is possible, but rare, for the property owner to challenge the government’s right to take the property under constitutional or statutory law. As an example, the “public use” restriction has been interpreted quite broadly. Usually, the battle in an eminent domain involves the value of the property (the “just compensation”). California statute defines the fair market value as “the highest price that would be agreed to by a seller willing to sell, but not under any exceptional or urgent necessity to do so.”
2. The Inverse Condemnation
The government initiates eminent domain proceedings. In contrast, the government proceeds to take property without moving through the outstanding domain process in inverse condemnation. A property owner may challenge development restrictions in these land-use disputes. As with eminent domain, this is called a “taking” and requires the government to compensate the landowner.
Takings, however, may not necessarily be associated with a forced transfer of ownership from the property owner to the government. Similarly, government conduct can lead to damage or some other diminution of the value or use of the property. Taking or damage to a property can occur even if the damage is temporary, such as the flooding of land by a governmental entity.
It is advisable to get a private appraisal and hire legal counsel if you own a property for which a government notice of condemnation has been issued. A property owner should not take on the condemnation process alone to ensure they are getting just compensation for their real estate investment.
What is the procedure for condemnation?
Notice of Intent
The first step in the condemnation process is the Notice of Intent. The government must provide written notice to the property owner that it intends to condemn the property. The notice must include a description of the property, the reasons for the condemnation, and the proposed compensation to the property owner.
Valuation of the Property
After the Notice of Intent, the government will conduct an appraisal to determine the fair market value of the property. The property owner has the right to hire their appraiser to provide a second opinion on the value of the property. The government will then make an offer to the property owner for the fair market value of the property.
Negotiation and Mediation
If the property owner is not satisfied with the offer, they can negotiate with the government to reach a fair agreement. If the negotiation fails, the parties may attempt mediation to reach a resolution.
If negotiations and mediation fail, the government can file a lawsuit to condemn the property. The court will hold a hearing to determine the fair market value of the property and the amount of compensation due to the property owner.
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Condemnation is what?
Who can condemn the property?
How much am I entitled to for having my property taken?
Is It Possible to sell the property before it is condemned?
Condemnation cases may be helped or hurt depending on the actions taken before and after the condemnation. The actions taken may not accurately reflect the facts of the property and its highest and best use.