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What Is Eminent Domain In Real Estate

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What Is Inverse Condemnation

What is Eminent Domain in Real Estate?

Eminent domain is when the government takes property to advance a public project. Theres a related, but different, concept known as inverse condemnation that we should touch on.

Inverse condemnation occurs when a property is already taken and the results of modifications to that property for the project have physically damaged or hurt the value of other property still held by individuals. For example, if the fumes from an oil refinery built on land taken by public domain substantially harm the resale value or prevent the full enjoyment of nearby property, the owners of that property may be able to file a lawsuit. If the plaintiffs prevail, the government would have to compensate these owners.

Eminent Domain Is The Governments Right To Take Over Private Property

Eminent domain is theright of the government to expropriate private property for public use.

However, the Fifth Amendment provides this power to the government only if just compensation is provided in return to the property owner.

Well talk more about what that means and how that is calculated in #3.

Can You Stop Eminent Domain

The only way to stop eminent domain is to challenge the governments right to take. You can only do this if the governments proposed taking does not meet the requirements for public necessity or public purpose. Even if you lose this challenge, you may still be entitled to a small portion of your property.

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Eminent Domain And Property Rights

Currently, there is a bipartisan drive to enhance infrastructure throughout the United States, which has the potential to undermine property owners constitutional rights. Property owners can preserve their rights and avoid costly hazards when a governmental agency proposes the seizure of private property for public use through efficient pre-condemnation planning before the property is taken. Eminent domain litigation is a complex area of law that involves representing private property owners, renters, and company owners throughout the United States in disputes involving condemnation, inverse condemnation, and other property rights concerns of varying magnitude.

For more than two decades, we have worked with clients to achieve negotiated, amicable, and creative solutions.

If a taking occurs, we will work tirelessly to obtain the highest possible compensation for the taking while also advocating for measures to alleviate the effects of the taking, such as lowering the scale of the taking or changing the design of the project.

In addition to our own highly skilled real estate, land use and environmental lawyers and government affairs and tax attorneys, we work with a network of leading outside experts including engineers, architects and planners.

  • Prior to condemnation, prepare agreements for monetary damages and non-monetary concessions
  • Litigate to defend takings
  • And conduct pre-condemnation planning. Lobbying by the government to get a taking eliminated or reduced

Why Eminent Domain Is Important

What is Eminent Domain? (Real Estate Exam Topic)

Eminent domain is a controversial topic. Though taking property may be necessary for the public good , it is sometimes difficult to forcibly separate a person from his or her property.

Additionally, there is considerable question regarding whether implementing additional heavy regulations on a particular property is effectively the same as seizing the property because it significantly reduces the owner’s ‘use and enjoyment’ of the property, and thus entitles the owner to .

Last, there is the important question as to what constitutes ‘valid public use.’ For instance, some courts have allowed cities to clear bad-looking neighborhoods simply to beautify the town. Others have allowed governments to seize property and give it to businesses that build factories or other job-creating facilities on the property.

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Experienced Chicago Area Eminent Domain And Condemnation Lawyers

The condemnation attorneys at RyanRyan have extensive expertise in eminent domain and condemnation, and they are well-versed in the nuances and subtleties of Illinois eminent domain law. Your rights will be vigorously protected by the attorneys at RyanRyan, who will lead you through the condemnation process to the best possible resolution.

Contact RyanRyanto to discuss all of your eminent domain requirements in the Chicago region and around Illinois. Check out our Frequently Asked Questions for additional information about eminent domain and property rights in Illinois.

Are There Limits On How Much You Can Be Compensated For A Loss

Yes, there are some limits.

If the government forces you to sell your property at a lower price, it can be required to pay you the difference between that price and fair market value.

In addition, if the losses were incurred because of no fault of their own , the government may have to pay for those losses. However, compensation for losses is limited by local zoning laws, which can be extremely difficult to challenge in court.

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What Is Eminent Domain In Real Estate

As a real estate agent, you will encounter the terms âlaw of eminent domainâ or âeminent domainâ in real estate. But what does it mean?

Eminent domain is the governmentâs right to expropriate private property for public use. In exchange for this, the homeowner gets compensated with the propertyâs fair market value. Letâs break this down a bit further:

Disputes Over Fair Market Value

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Just because the value of a property has been assessed by the government doesnt mean that it reflects the fair market value of the property. Many eminent domain disputes arise over the amount of compensation offered for a property. The valuation of property matters and your own appraiser may disagree with the governments proposed compensation amount.

If you feel that you are not being offered enough for your property, you can attempt to negotiate a better offer.

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Condemnation Should Not Be Confused With The Declaration Of A Property As Uninhabitable

Condemnation is the process by which private property is taken for public use.

However, youve probably heard the word condemnation used more frequently when it comes to condemned houses.

These are properties that the government has deemed unsafe or uninhabitable in some way.

Sometimes properties are condemned when they are unsafe or uninhabitableso that the plot of land can be repurposed for public use.

The government will market them as condemned, destroy the existing structures, and perform modifications on the private property before acquiring it.

This is the origin of this phrase.

That said, condemnation does not always mean that a property is uninhabitable.

It merely means that it is undergoing the legal process, and it is being acquired for a public purpose.

How Does Eminent Domain Work

The process of eminent domain starts when the government or agency has a public interest project. This project would then need to be in a specific location that gives the greatest return to the public.

Once they have identified a specific property, an agent will evaluate it to determine its fair market value. So, the amount determined by the agent will represent the compensation that the owner of the property will receive in return.

The appraiser must be independent, accredited, and knowledgeable about the property.

After the fair market value is determined, the offer gets presented to the owner. But, if the owner finds this unreasonable, they have the right to hire an appraiser. If the buying party and owner canât agree, then negotiations may begin.

That is why the owner should have an attorney throughout this process. A real estate attorney can ensure that the owner is aware of their rights.

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What Is Just Compensation

Simplifying the intent of the just compensation wording, you could say that just compensation is fair value for the property being taken, whether in the form of money or equivalent property. However, thats where the rub comes in. You have to come to some decision as to what constitutes fair.

This can be complicated by the fact that very often people have not just a financial investment, but also an emotional investment in their homes. Courts generally rely on a fair market value for the property to determine just compensation. However, its often difficult to determine a fair market value. Lets see why with an example:

A city wants to widen an existing road. As part of this, theyre using eminent domain to claim 10 feet at the front of a commercial property. However, if you were selling something, you would never sell just those 10 feet. Because theres no market existing, its difficult if not impossible to determine a true fair market value.

Common Types Of Condemnations In Illinois

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It is possible to acquire private property of any sort, whether it be real estate or personal property, through the use of eminent domain. The most common types of takings or condemnations in Illinois involve the acquisition of real estate or real property by the Illinois Department of Transportation or the Illinois State Toll Highway Authority for the purpose of constructing or improving roads and highway infrastructure. Additionally, the use of eminent domain or condemnation can be utilized to acquire any interest in real estate.

The eminent domain is a highly specialized aspect of the legal profession.

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What Is Condemnation

Definition: The procedure used by a public or private entity with the powers granted from eminent domain to take privately owned real estate.

Try not to confuse condemnation with a property being condemned. That is when a building is legally unfit for a human to live in, typically due to safety measures. This comes into play if a building is not up to code or has some zoning violations however, the definitive difference is the government does not take the title of the property, it just forbids anyone from living there until the homeowner fixes the problem.

What Is Public Use

Among the aims listed in the preamble to the U.S. Constitution is the promotion of the general welfare of the people. In line with this broad language, courts have generally given wide latitude in terms of the definition of public use under eminent domain.

While it could be for something the government operates and maintains such as a road or park, it could be that an industrial park is being built that will provide hundreds or thousands of jobs to the community, for example. The important thing is just to prove a public interest.

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Abuse Of Eminent Domain

Eminent domain is supposed to be only used sparingly for the public benefit. Unfortunately, that is not always the case. Developers sometimes use eminent domain laws with the complicit help of government officials to seize all kinds of property that the owners have no intention of ever selling at any price. People may lose their family homes where they lived for generations so that the city can allow a developer to build a parking lot.

To make matters worse, in 2005, the U.S. Supreme Court ruled in a case called Keto v. City of London that the city could seize property on the mere expectation of increased tax revenues for the city or jobs.

This landmark case basically removed any restrictions and expanded the ability of the government to seize property on a mere pretense of having an expectation of revenues. In response to the U.S. Supreme Court ruling, 44 states enacted laws restricting eminent domain seizures in those states.

How Eminent Domain Affects Your Property Values

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On Behalf of Palmieri, Hennessey & Leifer, LLP | May 31, 2022 | Eminent Domain

A hotly contested California water pipeline project in San Diego became more complicated in May 2021 when East County officials moved to take the East Mission Gorge Pump Station in Santee by eminent domain, citing that property is all the project needs for completion. A lengthy legal battle is still expected to take place, involving serious legal implications for the East County Advanced Water Purification Project and San Diegos $5 billion Pure Water sewage recycling work.

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How Does It Work

The first step towards the eminent domain process is to condemn the property. The method of condemning a property is not voodoo or spiritism, but a process through which the government notifies the owner of their objective of implementing the eminent domain process.

The eminent domain laws vary for each state, but in most cases, the governments first step is to try to agree regarding the price with the owner. If they reach a deal, the process is easy part of the property or all of it goes under the administration of the government for temporary or permanent use. The owner receives the fair compensation agreed upon that is determined by the current real estate market, the income the property produces, or the cost and value of the property by taking into account the expenses required to replace the building.

In case the owner of the property considers the offer unjust, then they can argue against it, leading to a condemnation hearing during which the court has to set a fair price for the property.

You Can Negotiate For A Higher Sale Price And Better Terms

In the event that you get a notice of eminent domain, you should immediately contact an attorney who is well-versed in real estate law. Your attorney will act as a point of contact between you and officials from the government. They will negotiate on your behalf in order to obtain the greatest possible deal, and they will represent you in court if the parties are unable to reach an agreement. Whenever you find yourself in a scenario involving eminent domain, always negotiate with the authorities.

Here are some of the issues that your attorney can assist you in negotiating: In order to negotiate the greatest price possible, you need also employ a top real estate agent who can assist you in determining the fair market worth of your house.

They can then provide these comparable properties to the appraiser in order to advocate a higher appraised value for your house..

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What Is Eminent Domain Compensation

Property owners often have questions about eminent domain compensation in cases where only part of a property is seized, as well as whether payment is made for improvements to, or businesses on, the property or businesses, as well as who is entitled to eminent domain compensation in cases where the property has a tenant.

Is There A Taking

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There are two types of takings: possessory and regulatory. A possessory taking takes place when the government physically occupies or confiscates property. A regulatory taking, by contrast, occurs when a government regulation results in a diminution of private property rights. In the seminal case of Pennsylvania Coal v. Mahon , the Supreme Court found that a government regulation would constitute a taking if it went too far.

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