Eminent domain in real estate is the power that the government has to take private land. The Constitution limits its use, but courts expanded its definition on two occasions. Some key facts to remember are:
- It must be used for public use or purpose and they must pay you
- Private companies can use it with legislative consent
- You can protect your property and fight based on use or purpose and whether compensation is fair
Courts expanded the definition twice in 1954 and 2005, but the basic principle remains. The government cannot take your home unless they need it for a public benefit, and they must pay you a fair price.
The Constitution and Eminent Domain in Real Estate
The constitution deals with eminent domain in two places. The Fifth Amendment states “nor shall private property be taken for public use, without just compensation.” The Fourteenth Amendment, Article I states “nor shall any state deprive any person of life, liberty, or property without due process of law.”
The founding fathers recognized that this power exists and needs limits. The courts fleshed out the details of how to implement it.
- It does not require constitutional recognition because it is an attribute of sovereignty
- It is necessary for both the national and any state government to exist
- The legislature, both federal and state, authorizes this
- Governments must pay if they take land
- The legislature may delegate this power to private companies for a valid public use
There are times when the government needs to take land for the good of everyone. However, the limit is to public use only, and they must compensate the landowner.
Public use, though, is an ambiguous term. Just compensation is also. Therefore, courts constantly decide how to apply these standards to cases.1
Why do We Need Eminent Domain?
We need an eminent domain for projects that benefit everyone. These fall into one of several categories:
- Public works – Schools, hospitals, police and fire departments, highways, bridges are some examples
- Utilities – Pipes or wires require easements to go across privately owned land
- Blight – The government takes vacant, run-down buildings, tears them down, and develops the land for the benefit of the community
- Private developments – Bring economic or other benefits to a community
As you can see there is a wide variety of projects that may require access to or possession of private land. Many of these we accept as reasonable, such as public works and utilities. Others, such as blight and private developments, generate controversy.2
Abuse happens when the government uses eminent domain for purposes beyond or instead of the public good. How does this happen? Originally, projects were limited to public works and utilities. Gradually, the definition expanded to include blight and private developments.
A public work, such as a school, is a single structure with a specific purpose. It’s defined and limited in its scope. On the other hand, private development can be anything. Further, economic and other benefits are ambiguous. Undefined projects with ambiguous benefits invite corruption and abuse.3
Private companies can and do use eminent domain, but they can’t just take your land or impose an easement. A legislative body must give them permission. Over the years, courts expanded the definition of public use and allowed legislatures to grant it for more private development.
- From our founding legislatures grant private companies easements for utilities and land to build roads.
- In 1954 The Breman Case expanded the definition of public use. It granted local governments the authority to condemn blighted areas and improve them.
- In 2005 the Kelo Case interpreted public use to be a public purpose. If a project generates new jobs and taxes and revitalizes an area it qualifies as public use.
The progression goes from a limited provision to a very broad interpretation. Before, utility companies were the only ones routinely granted eminent domain, but today many land developers are.4
Protect Your Property
Protect your property by knowing the law. The government may only take your property for public use or purpose. Also, they must compensate you fairly. You can fight on either of these two grounds. You can claim that they:
- Don’t need your house
- Didn’t offer a fair compensation
Remember that you are taking on the government, and don’t do it alone. Hire an attorney experienced in this area and familiar with your local laws. Unfortunately, the government has nearly unlimited resources, so you face a long and expensive fight. Often the best way to fight is by banding with other homeowners to share the litigation costs.5
Fight and Stop Eminent Domain
Only the requirement for public use or purpose can stop eminent domain. This requirement isn’t clear, so it does open the door for a fight over interpretation. Ask yourself:
- Is this really for public use or purpose?
- Do they really need my land for this project?
- Is the compensation fair?
If you have questions about whether a project is public use or purpose, a court might, too.
Final Thoughts About Eminent Domain in Real Estate
Eminent domain in real estate is a necessary, and powerful, tool for the government to provide for public use or purpose. Projects, like building a new school or expanding a highway, may be difficult for an individual homeowner, but we can all see how they benefit the community. The founders recognized the necessity as well as the power and specifically limited its use.
Today, the courts expanded the definition, and the government uses it more broadly. The basic principles remain, though. They can’t take your property unless it is for public use or purpose. Further, they must pay you a fair price if they take your home.
If you feel that the government hasn’t done either of these then you may fight the action. Don’t do it alone, though. Find a good lawyer experienced in this area and familiar with your local laws. Consult with them and be realistic about your chances, because the litigation will be long and expensive.