Eminent domain is the power of the federal, state, and local governments to take private property and convert it to some sort of public use. Exercising the power of eminent domain, also known as condemnation, is backed by the Fifth Amendment to the U.S. Constitution and applies to a variety of property rights. If the government wants to demolish an owner’s home or business to build schools, utilities, courthouses or roads, it has a constitutional responsibility to compensate that person for the fair market value of the property before it tears it down.
Early Acknowledgement of Eminent Domain
The government’s power of eminent domain has long been used in the United States and has often been the cause of controversy as property has been taken from many landowners without their consent. In its earliest days, eminent domain was used mainly to support large public works operations, such as the expansion of the freeway system following World War II. In this case and others similar to it, many agreed that eminent domain is necessary for the development and sustainability of the United States.
Federal eminent domain power was first examined and contested in 1876 in Kohl v. United States. A Cincinnati, OH landowner challenged the federal government’s right to condemn his property to convert it to a custom house and post office. The judge assigned to the case, Justice William Strong, opined that the federal government’s authority to condemn the property was essential to its existence and perpetuity.
Justice Strong’s ruling set a precedent to recognize the government’s power to condemn property, which was made evident 20 years later when the Gettysburg Electric Railroad Company contested the government’s action to acquire its land to preserve the site of the Gettysburg Battlefield. Once again, the Court ruled in favor of the government, solidifying its power to condemn property from individuals and corporations alike.
How It Works
Although the eminent domain process varies slightly from state to state, the underlying steps are similar:
- Initial Contact: When a government agency identifies land or property of interest, it will attempt to make initial contact with the owner to express its interest in purchasing the property. Next, the agency will schedule an appraisal of the property to get an opinion of its fair market value. Following the appraisal, the owner will receive a copy of the report and the government will make an initial offer to purchase the property.
- Public Hearing: Following the initial offer, a public hearing is held for the government agency to explain why it must condemn the owner’s property. During the hearing, the agency must explain why the subject property is critical to its public project and why the property’s location is the best possible location to serve the public. In addition, the agency must show that they have made an initial offer to the property owner. At this time, the property owner can agree to the condemnation without any protest or can choose to challenge it.
- Court Filing & Final Determination of Fair Market Value: Once the public hearing is complete and the government has successfully shown why it must condemn the subject property for its public project, an eminent domain case is filed in court. During this stage of the process, both the government and property owner can hire their own appraisers to get separate opinions of the property’s fair market value. The appraisal reports are then exchanged between the two parties, at which time both sides may endeavor to settle on a final price. However, if the owner chooses not to settle, a jury is commissioned to determine the final, fair market value of the property. Following the final determination of value, the government agency must deposit its purchasing funds for the court to hold.
- Title Transfer: Following price settlement or a jury decision, the government typically has 30 days to pay the property owner. When the owner is finally paid, the title of the property officially transfers to its new government owner.
The power of eminent domain has been deemed necessary by the government to develop projects for public use. The process of condemnation is often contested by the property owner; however, numerous court rulings have upheld the government’s authority to acquire property without the other party’s consent. In recent years, the definition of “public use” was expanded to allow for private companies to take ownership of condemned property. These companies include gas companies, oil companies and retail operators. This decision has caused widespread protest, and some states have responded to the decision by amending their constitutions to forbid or limit the use of eminent domain for private gain.