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Eminent domain is grounded in the 5th amendment allows the government to seize private property without the owner’s consent.  From 1998 to 2002, more than 10,000 properties across 41 states faced condemnation — only for the land to be handed to private developers.  Eminent domain requires just compensation and must be claimed for public use, which includes constructing roads and freeways, municipal buildings and schools, and preservation of historic sights.  Private use that benefits the public is also grounds for eminent domain and includes railroads, utilities, and renovation of “blighted” sites. 

Just compensation requires payment at the current market value, and many property owners can negotiate a higher price with help from legal counsel and expert appraisers.  Most states don’t report the use of eminent domain, making it very difficult to track.  In 2020, Texas reported 224 cases of eminent domain being employed by the government or private entities, but still, 5 agencies failed to meet state requirements and report their use of eminent domain, making the actual number unclear.  In 2019, Missouri’s Department of Transportation acquired 608 parcels of real property, but the state only reported 54 condemnation filings. 

There are many famous cases of eminent domain abuse.  In 2019, the Iowa Supreme Court rejected the 2005 Supreme Court decision, saying the economic development did not justify public use for the Dakota Access Pipeline.  However, the court argued that the pipeline served the public in a more impactful manner than an office building.  In Hurst, Texas in the early 2000's, the city used eminent domain to remove 127 homeowners, making way to expand a private mall.  Only a handful of the homeowners resisted the offers and filed lawsuits, yet all were overruled, and they were forced from their homes. 

In areas where eminent domain was used to obtain property for private development, residents are more likely to be from racial minorities, poorer, and less educated.  Eminent domain used for private development affected areas that had 58% minority residents compared to the surrounding areas, which were composed of 48% minority residents.  Similarly, eminent domain areas contain 25% of people living in poverty compared to the surrounding areas, which house 16% of people living in poverty. 

Property owners are rarely successful in stopping the government from taking their land, but that doesn’t mean you’re powerless.  When the government wants your land in Kentucky, property owners will receive a notice of intent by mail, an appraiser will assess the size and condition of the property, and a purchase offer would be made based on the appraised value.  Before accepting an offer, it is important to consult a lawyer for help understanding the process; these consultations are usually free. 

Most owners are in a good position to negotiate a better price with help from legal counsel.  The property owner and counsel review an appraisal offer to determine if it is an accurate accounting of property and reflects the property’s highest value and best use.  It also determines whether the property can be rezoned to increase the value.  Counsel also compares the offer to comparable sales and asks whether neighbors’ properties are needed for the project as well. 

If you cannot agree on a price, a condemnation lawsuit will follow.  A jury will then determine the amount of just compensation owed.  During the proceedings, you can contest the sale by presenting expert testimony; you may be able to prove the project doesn’t need as much land as estimated or that the appraised value was inaccurate.  Know your rights before you give up a property.

eminent domain infographic
Source: Dallas & Turner, PLLC


NowSourcing

Brian Wallace is the Founder and President of NowSourcing, an industry leading infographic design agency , based in Louisville, KY and Cincinnati, OH which works with companies that range from startups to Fortune 500s. Brian also runs #LinkedInLocal events nationwide, hosts the Next Action Podcast, and has been named a Google Small Business Advisor for 2016-2018. Follow Brian Wallace on LinkedIn as well as Twitter.

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NowSourcing

Brian Wallace is the Founder and President of NowSourcing, an industry leading infographic design agency , based in Louisville, KY and Cincinnati, OH which works with companies that range from startups to Fortune 500s. Brian also runs #LinkedInLocal events nationwide, hosts the Next Action Podcast, and has been named a Google Small Business Advisor for 2016-2018. Follow Brian Wallace on LinkedIn as well as Twitter.

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