Most people know the government has the power of eminent domain which is the authority to take private property so long as they pay fair compensation. This is also known as Condemnation Taking, Declaration of Taking, Notice of Taking, and possibly Inverse Condemnation.
The process usually starts when you are contacted by an agent of the condemning authority to discuss the real estate involved and to negotiate a sales price. These agents will have an appraisal that was conducted for the condemnor. This appraisal will provide the starting point for negotiations. There is almost always room to increase the offer through negotiations.
One of the key questions for a property owner is whether or not to get their own appraisal. Appraisals for these purposes are not regular appraisals that would be used for a re-finance or the purchase of a home. They are more complicated and significantly more expensive; many times costing between $2,000 and $3,500.
If the real estate being taken and the offer are both relatively small, it may not be worth paying for an independent appraisal. On the other hand, if the real estate and offer are significant it is worth obtaining an appraisal to help in negotiations to get a fair price. If you are able to reach an agreed price the condemnor will have you sign an agreement and a deed.
Condemnation of condominium association common elements and homeowners association properties (single-family home and townhome) are substantially more complicated. It may be necessary to get a large majority of the owners, and possibly all the owners in some cases, within the association to consent. Any association that finds itself with a condemnation issue should contact an attorney who has represented associations with condemnation matters.
In the event a negotiated price for a voluntary transfer is not reached the condemnor will have the Attorney General’s office file a condemnation lawsuit. At the same time, the amount of the comdemnor’s offer will be deposited with the Clerk of Court. Those funds are immediately available to the property owner and withdrawing those funds does not, by itself, waive any rights to negotiate or litigate for more compensation.
Most people are not aware that once the condemnation action is filed and the money is deposited with the Clerk of Court the title to the property transfers immediately upon operation of law. Even so, the property owner(s) should be very careful because there are strict and important deadlines and steps in the process that, if missed, could cause the property owner to lose valuable rights.
All eminent domain matters have unique facts that may be missed if you are not familiar with the process. What about the additional light and noise that may exist once the project is complete? What if your property could be rezoned to be far more valuable? And very common – what if the area being taken makes the rest of your property virtually worthless? It is best to get advice very early in the condemnation process before the Declaration of Taking or Notice of Taking is initiated.