Eminent domain is the right of the government (and sometimes private entities) to take property. Eminent domain is the inherent power of a sovereign to take an individual's private property without the individual's consent. See generally 1 Nichols on Eminent Domain 1.11, at 1-7 (Julius L. Sackman & Russell D. Van Brunt eds., 3d ed. 2002).
The trade-off is that the condemning authority must pay just compensation. While the right to take property can be a hotly contested issue, most cases and the majority of disputes center on the constitutional issue of what is "just compensation." At its core, just compensation is about fairness. Society has the right to take property for a public use (roads, schools, utilities) no individual should bear the societal cost of the public good without being compensated fairly.
What is "fair" is subject to the many vagaries inherent in real estate valuation. The legal rule is relatively simple. Just compensation is fair market value and fair market value is market based. What would a willing buyer pay a willing seller? That number is "just compensation". Easy, right? No. First, while fair market value is often used as a surrogate for just compensation, the two are not the same. Appraisers are required to consider fair market value. The constitutional obligation, however, is "just compensation." Unlike a market transaction, a landowner has no choice. In a purely private transaction both parties have the absolute right to back out. There is no obligation to agree on a value. Market transactions routinely fail. In a condemnation action, there is presumed a transaction, even if the marketplace would otherwise fail.
The United States Supreme Court has recognized that:
"[W]hen market value has been too difficult to find, or when its application would result in manifest injustice to owner or public, courts have fashioned and applied other standards. . . . Whatever the circumstances under which such constitutional questions arise, the dominant consideration always remains the same: What compensation is "just" both to an owner whose property is taken and to the public that must pay the bill?"
See United States v. Commodities Trading Corp., 339 U.S. 121, 123 (1950).
Just compensation for the loss of private property is no less important than the right of free speech, the right to be free of unreasonable searches and seizures and the freedom of religion. There is no hierarchy in the Bill of Rights. As a condemnation lawyer, ferreting out "just compensation" requires the application of not only valuation legal principles, but detailed and measured understanding and appreciation of many areas of law. Zoning, official controls, contracts, market trends and anything else that can impact the value of real estate must be analyzed and applied in each case consistent with the law of each jurisdiction.
Welcome to the condemnation committee. We welcome all input.
Chair, Eminent Domain Committee