Eminent Domain 101
Eminent domain allows the government to acquire private property, including farms and businesses, but this right is not absolute. Property owners can challenge these actions, ensuring their rights are protected. At MFoxLaw, we’re here to support you through this complex process. Dealing with eminent domain can be frustrating. You may spend months negotiating with government agents who prioritize their interests. Many property owners feel pressured to accept inadequate offers, weakening their negotiating position. Understanding your rights is crucial to achieving a fair settlement.
Understanding Your Rights: The Role of a California Eminent Domain Lawyer
Engaging an eminent domain lawyer in California signals to the government that you are prepared to take legal action if necessary. This demonstrates your commitment to achieving a fair resolution. With professional representation, you can negotiate effectively, ensuring that your interests are fully addressed. If a reasonable settlement is not reached, we are ready to take your case to trial, allowing a judge or jury to determine the outcome.
It’s important to know that the government’s authority to acquire property and the compensation offered can both be challenged. Even if you're not ready to hire an attorney just yet, we encourage you to reach out to MFoxLaw to discuss your situation and gain insight into the eminent domain process.
The Basics of Eminent Domain
Essentially, under specified circumstances, the Government can take private property. But there are limits on the government’s power to do so. They can only do so for a public purpose, and they must pay just compensation. These terms are defined by California eminent domain law, and the government must follow it.
Condemnation by way of eminent domain means that the government is taking ownership of private property (or some lesser property interest like an easement or right of way) for a public use. The power of federal, state and local governments to take private property by eminent domain, including real and/or personal property, has always existed in the United States since the drafting of our Constitution, being an inherent power of government.
The Fifth Amendment to the United States Constitution imposes limitations on the government’s eminent domain powers. Namely, the Constitution requires that the government taking must be for a public use, and that just compensation be paid to owners of all private property taken via Condemnation.
Likewise, Article 1, Section 19 of the California Constitution provides that “just compensation” must be paid for private property taken for public use. The courts have determined that this standard is measured by the property’s “fair market value”.
Article 1, Section 19 of the California Constitution states: Private property may be taken or damaged for a public use and only when just compensation, ascertained by a jury unless waived, has first been paid to, or into court for, the owner.
California’s eminent domain laws are different than the laws of other States. If your property is being taken, or your business is being forced to relocate, due to eminent domain in California, it is very important that you contact an experienced real estate and eminent domain attorney now. Contact the Law Office of Mark R. Fox for a free initial consultation, so we can help you have a complete understanding of what you are facing.
Why Hire a California Eminent Domain Lawyer?
The eminent domain process can be complicated, confusing and sometimes intimidating for a property or business owner (also known as the “condemnee”). Although the government wants you to believe that they are protecting the interests of the condemnee, unfortunately this generally is not the case. More often than not, the primary focus of the condemning agency is to determine the cheapest way to acquire the desired property. Therefore, it is imperative that property and business owners faced with condemnation contact an experienced attorney at the earliest possible stage in the condemnation process. Consulting with an attorney who has extensive experience in eminent domain is the best way to ensure fair compensation for your losses.
Compensation in Eminent Domain
Fair Market Value of Property
If the government acquires your property by eminent domain, you are entitled to the “fair market value” of your property which is the highest price on the date of valuation. Because the definition of “fair market value” is somewhat uniquely defined by eminent domain law, it is imperative that condemnees consult with appraisers who have experience valuing real estate within the context of eminent domain. To achieve the best results, we consult with and retain appraisers who are not only experienced with preparing eminent domain appraisals, but who are comfortable testifying at deposition and trial.
Severance Damages (i.e. damages resulting to the property that remains after a portion of a larger piece of property is taken)
In eminent domain cases, you are entitled to the value of the property taken plus any damages to your remaining property. The damages to your remaining property are called “severance damages.” Severance damages are usually measured by the decrease in the market value of the remaining portion of your property.
Precondemnation Damages
In eminent domain cases, you are entitled to compensation if the government excessively delayed filing the condemnation action, or engaged in unreasonable conduct which causes damage. The damages may include loss of rent, additional interest accrual, or other remedies determined by the court.
Relocation Benefits
In eminent domain cases, you are entitled to reasonable costs to relocate your business. This includes moving costs, expenses in finding a replacement site, printing new stationery, and costs to reinstall and reconnect machinery and equipment. Recovery for these items typically occurs through an administrative proceeding, not in the eminent domain action itself. However, relocation benefits typically are intimately tied to the eminent domain proceeding, and other areas of compensation.
Improvements Pertaining to Realty
You are entitled to compensation for “all improvements pertaining to realty.” This includes items installed for use on the property that cannot be removed without substantial damage to the property, such as machinery, fencing, or other equipment.
Loss Of Business Goodwill
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.
Relocation Assistance
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.