Condemnation / Eminent Domain: FAQs

What is condemnation/eminent domain?

Condemnation, also known as eminent domain, is a legal process whereby a governmental entity or utility exercises its sovereign right to take all or part of an owner’s private commercial land for public use.  In such cases, the owner is entitled to compensation for the loss value of the seized property as well as possible injury to the value of any remaining land.

Examples:

  • You own a 200-acre tract of raw land in the path of development. The Oklahoma Department of Transportation (ODOT) wants to cut your land in half by taking a large tract that will give you no access to the other half after the taking.
  • You own a warehouse, and the Oklahoma Turnpike Authority (OTA) takes almost all the parking lot used to reach your loading docks, thereby making it impossible to service trucks from your docks.
  • You operate an exclusive service for the care and training of valuable show horses, and the local electric utility company wants to erect a high-voltage line through the middle of your training pens.
  • You own a high-end office building, and ODOT wants to take the surrounding woodlands which create a peaceful sense of calm and allow you to charge premium rent.  They also plan to build a ramp at level grade with the first floor of your lobby only feet away from your building.

Can they really take my privately owned land?

In most cases, the condemning authority can do so.  A government or other public entity can use its power of eminent domain to seize private land so long as it shows there is a legitimate public use for the condemned land and that the landowner will receive just compensation for the taking. Common public uses include the construction or expansion of highways, schools and universities, and utility transmission systems. The more controversial public uses are for economic development.

Who has the authority to take my property?

Every government entity in the United States – from the federal government to local governments – has the power of eminent domain.  Other public entitles that frequently exercise their condemning authority include state departments of transportation, turnpike authorities, utility companies, pipelines, rural water districts, and schools and universities.

What types of land and property can be taken?

The most common types include raw land being held for development, farm and ranch land, manufacturing facilities, office buildings and shopping centers.  Condemning authorities may take all or part of a parcel of privately owned land. You can only contest what the authority decides it needs for a particular project if you prove that determination was arbitrary and capricious.

Why do I need an attorney?

While some condemnations can be challenged on the basis of valid public use or necessity, the fact is that most condemnation cases revolve around the issue of just compensation due the landowner. “Just compensation” generally means the value of the taken property on the date of the taking plus the damage, if any, to the remaining property.  A qualified lawyer who is experienced in condemnation matters, who knows the numerous tricks and techniques used by condemning authorities to get landowners to settle for a lower amount, and who has access to expert resources can assist you in diligently protecting your landowner rights and maximizing the compensation due to you.

I have just been approached by someone seeking to take my land. What should I do?

Immediately contact an attorney who is experienced in condemnation matters and who can walk you through the process step-by-step, counseling you on your options and opportunities along the way.  If the taking of your property is likely, it’s especially important to seek out a law firm that has a proven track record of maximizing the compensation due landowners throughout all possible phases of the condemnation process.  This includes direct negotiations with condemning authorities before a condemnation petition is filed, obtaining just compensation through the Commissioner’s Award process, and obtaining just compensation that meet or exceed commissioners’ awards through the jury trial process.

Why shouldn’t I just take their first offer and avoid a possible lawsuit?

While the law requires a condemning authority to make a good-faith offer to a landowner before instituting a condemnation proceeding, the first offer – even if it is based on a third-party appraisal – is usually just a starting point for negotiations.  Condemning authorities understand that it is ultimately more cost-efficient for them to negotiate with the landowner rather than go through the time and expense of a condemnation lawsuit.

Can I recover from all types of damage I suffer?

Laws regarding damages and landowner compensation vary by state, so it’s important to consult with a qualified lawyer.  For example, under Oklahoma law, the condemning entity must compensate landowners for the fair market value of their land, as well as relocation expenses and certain consequential damages to the remaining property after the taking.  A wide variety of questions and issues can arise.  For example:  Will the remaining land require a new entrance or different type of access? Has the public use project in question created drainage or other hydrology issues on my property?  Will the loss of frontage property affect my commercial business’s visibility?

In addition, while there is a general rule against allowing compensation for business losses, the Oklahoma Supreme Court has shown a willingness to allow a jury to hear evidence about the business conducted on the land as part of the jury’s determination of the fair market value of the property.

What is Inverse Condemnation?

Inverse condemnation is a legal procedure designed to obtain compensation for damages to the value of commercial land or other property caused by the actions of a governmental entity or utility.  In an inverse condemnation, the person or business whose property is physically damaged or otherwise devalued initiates the lawsuit.

Examples: 

  • The local airport recently built a new runway that now sends air traffic directly over your restaurant.  The noise and vibrations are so significant that your once-loyal customers are staying away and your business is rapidly declining. 
  • A local utility digs on property adjacent to yours, which subsequently causes large sinkholes to appear on your land.

Can I get lost income caused by the taking?

The condemning authority will always tell you that you are not entitled to damages for lost income. That is not a correct understanding of just compensation. Many businesses are more valuable because the unique nature of their real estate produces an income stream. For example, the fair market value of a shopping center or office building is primarily determined by the rents that can be charged. The value of a manufacturing facility may hinge on its ability to be “grandfathered” as to numerous environmental requirements. Takings can dramatically impact the unique ability of the remaining real estate to produce income and, hence, the value of that real estate.