What Is Eminent Domain?

In eminent domain cases, you are entitled to compensation if your business suffers a loss of benefits that a business enjoys from its location, reputation for dependability, skill, quality, and ability to retain patronage.  If these business attributes are lost or damaged by the condemnation and the owner cannot reasonably preserve the goodwill by relocating, the owner has a claim for damages which will be determined by a jury.

Historically, lost business goodwill was not recoverable under eminent domain law. However, in 1975 the Legislature enacted section 1263.510 ‘in response to widespread criticism of the injustice wrought by the Legislature’s historic refusal to compensate condemnees whose ongoing businesses were diminished in value by a forced relocation.

Currently, California law allows a business to recover compensation for loss of goodwill when property is taken by eminent domain.  Not every state allows recovery of compensation for such a loss.  To be entitled to compensation for loss of business goodwill, a business must show that the loss is caused by the taking, that it cannot be prevented by relocation or other reasonable mitigation efforts, and that it will not be compensated for the loss in other ways.  There are more limits and intricacies that must be analyzed.  The attorneys at FoxLaw can help you understand your rights and entitlements in this area. 

The government is obligated to provide Relocation Assistance and pay Relocation Benefits when a person, business, or farm operation is forced to relocate to a new site
If you are forced to move your business because of a government project, you are entitled to reasonable costs to relocate. In general, relocation assistance is governed by the California Government Code, but be aware that the law can be very complicated and should be discussed with an attorney familiar with the actual application of the law.

In fact, any person, business, or farm operation displaced as a result of the government’s acquisition of property is typically entitled to relocation assistance and financial compensation for eligible relocation expenses, such as moving expenses. The amount of relocation compensation is determined on a case-by-case basis.

​The amount that you are entitled to is subject to certain maximum amounts (i.e. $25,0000 for reestablishment expenses), but keep in mind that these amounts are not the TOTAL amount that you are entitled to.

​The total amount that you are entitled to includes moving costs, costs to reinstall and reconnect machinery and equipment, expenses in finding a replacement site.

​Relocation benefits are typically handled by each agency through an administrative proceeding. It is not part of an eminent domain action itself, unless all attempts for administrative relief are exhausted.

The government’s power of eminent domain comes directly from the United States Constitution and state (California) constitutions.

The government can only take property for a “public purpose.”  The term “public purpose” has been broadly construed by the courts in favor of condemning authorities.  Normally it is used to acquire property for highways, railroads, schools, and other public purposes. 

Eminent domain is the government’s ability to acquire property without the consent of the property owner.  To do so, the government must pay the property owner “just compensation”.   Condemnation is the act of acquiring property, also known as the government’s exercise of their power of eminent domain.

It can! Eminent domain abuse has become a growing concern in many communities where a property developer convinces the city take private property for the purpose of redevelopment for profit. The law has gone as far as defining “public use” as “for the public good”, which are entirely different things. Under the “public good” definition, cities can claim private property and allow private developers to raise new buildings for the sole purpose of profit growth.

​

Just compensation has been determined by the United States, and more specifically, the California Supreme Courts to be an amount equal to the highest price on the date of valuation that would be agreed to by a seller, being willing to sell but under no particular or urgent necessity for so doing, nor obliged to sell, and a buyer, being ready, willing, and able to buy but under no particular necessity for so doing, each dealing with the other with full knowledge of all the uses and purposes for which the property is reasonably adaptable and available.  Another aspect to valuation is the “highest and best use” of the property which is not necessarily the use to which the property is put at the time it is taken by the government.  As experienced eminent domain attorneys we can, of course, help you maximize the just compensation whether through negotiations, or aby way of a jury trial, if necessary.

As a property owner, you have the right to challenge the government’s ability to acquire your property.  Trying to stop a public project is generally referred to as a “Right to Take Challenge”. 

Some issues that can be raised include, but are not limited to, the following …  Does the government have the authority to acquire property? In other words – Do they have the “power of eminent domain”?  Is there a sufficient “Public Purpose” for the acquisition of property?  Is the property “Necessary” for the project?  Did the government offer “Just Compensation” for the property?

In most cases, the governmental entity seeking to acquire property typically does have the ‘power of eminent domain’ (but it should be checked) so whether a ‘right to take challenge’ will be successful generally depends on whether the project is for ‘public use’ and whether the acquisition of property is ‘necessary’.  At the Law Office of Mark R. Fox, we can help you examine whether these challenges may be successful, and whether it will be worth the effort to raise them. 

Yes.  If you and the government cannot agree on a price for the property, it can be challenged in a court of law.  A governmental entity must file an eminent domain lawsuit to acquire property by force.  And a jury eventually decides how much the property is worth if a negotiated resolution is not possible.  This is where an experienced California Eminent Domain attorney will be of great value to guide you through the entire eminent domain litigation process. 

The government must first make you an offer that they believe is equal to just compensation for the property.  If you don’t accept it, and they still want to get possession of your property, they must file an eminent domain lawsuit and deposit that money (the amount of the offer) with the Court, or with the State of California.  You then have the right to apply to withdraw that money.  Of course, we can help you with this because it can become a complicated procedure.  Withdrawing this money does not waive your right to contest how much more compensation you believe should be paid for your property.  You do, however, waive your ability to challenge the government’s right to acquire the property for their public project.  

If a government agency acquires property by their use of their power of eminent domain, and you own a business on the property, you may be forced to relocate your business to a new site. 

However, if you have to move because of the condemnation (eminent domain) project, you may be entitled to compensation for your losses. 

Specifically, you may be entitled to compensation related to relocating your business (Relocation Benefits), compensation for improvements pertaining to the realty (Fixtures & Equipment), and compensation for loss of business goodwill (Goodwill).