Stated quite simply, condemnation is when the government takes private property for public use. This is done through the power of eminent domain and when it occurs, the owner of the property is legally entitled to just compensation for the land.
Reasons for the government taking private land for public use are tied to what is considered best for the society and people who live in the locale. That is, it may be tied to the improvement, expansion, or extension of roads, the growing need for power, sewer, or communication lines, or other expansions of infrastructure to serve the public.
In an ideal situation, the government makes its plan for expansion, considering all options, and finally settling on what areas of private property are going to be affected by the work. It then consults appraisers, who come up with the estimated property value, which the government offers to the property owner. The owner then agrees and plans proceed smoothly.
However, this is often not the case. If the owner feels the price is unfair and cannot reach an agreement with the government, the matter is taken up in condemnation proceedings. The property owner then has three possible methods of proceeding. He or she can contest the appraisal of the government, by working with an attorney and private appraiser to estimate the fair market value of the land. The second option is to contest the government’s proposed use of the land. This, however, is not the strongest method, for as long as the government’s use is deemed to be proper, the contestation fails. A more effective approach, and the third option, is to contest the amount of property being condemned. That is, the owner can claim that the government’s plan can be carried out with less land than they are condemning. This may be effective, as the government only has the right to the private property to the extent that it is needed to accomplish the public goal.
The value of the property in question is typically the central issue with which condemnation court finds itself dealing. Obviously, the worth of a property is based upon a large number of factors. Dealing with the unique characteristics of each parcel of land is often what leads to the differing value estimations of government and property owner. Important factors include the size of the land, its zoning, any structures existing on it (buildings or roads), its current use, its potential uses, adjacent properties, the existence of tenants, and whether it is linked to the livelihood of the property owner. However, not all of these factors are of equal importance, as the government is simply seeking the fair market value, that is, what agreement might be reached between two parties acting without compulsion. It is important to note that time is also an important factor, as the value of property can fluctuate considerably.
There are three primary methods for determining property value:
-The Market Approach- The value of the property is determined in relation to recent sales of comparable properties in the area. This may be difficult if no such sales exist.
-The Cost Approach- This is also called the depreciated replacement cost. It estimates how much it would cost to replace the land and all structures on it, in light of depreciation.
-The Income Approach- The value of the property is based upon its investment value. That is, it is based upon how much one might pay at that time, based upon the income potential of the property.
Finally, the time of the valuation is significant and may be contested by the property owner. If, for example, the government buys all adjacent properties and allows their value to decrease markedly through disrepair, etc, in order to pay a lower price for the property in question, the owner can contest this.
While it seems that dealing with condemnation should be relatively straightforward, it is an extremely complex issue, based upon a myriad of factors. Those disputing condemnation would be greatly aided by the advice of an experienced real estate attorney.
