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What is Condemnation?
Condemnation is the legal process in which a government agency can acquire property for a “pubic purpose.” “Public purpose” is a legal term that justifies the taking. In the eminent domain context, condemnation is not the closing down of uninhabitable or unsafe buildings. Condemnation in an eminent domain context means that he government must compensate a landowner for taking his/her property for some government benefit.
How does the State acquire my property?
The State, or a designated developer, can negotiate to buy your property just like any other buyer might. If you and the State can not agree a price, though, the State can proceed with eminent domain. Eminent domain is simply the legal process that has been established to allow governments to gain ownership of private property. Eminent domain formally begins when the State starts a lawsuit to take your property. These lawsuits do not affect your credit rating or allege that you have done anything wrong.
What I am entitled to in a condemnation action?
State law and the United States and South Carolina Constitution allow government agencies to take your property as long as it pays compensation. As a landowner, you are entitled to just compensation. Just compensation is a legal term requires the government to place you in the same position financially after the taking as you were prior to the taking. This is a subjective analysis and often requires expert testimony to demonstrate and prove just compensation. Just compensation means the actual value of the property taken, plus any damages to the remainder less any benefits as a result of the project. This is a complicated formula which considers a number of factors. The value of your property depends on a number of outside influences which one must consider when contesting the government’s initial offer.
Can I assume that the government will treat me fairly under the eminent domain rules?
No. The government is no different from any other buyer of real estate. It wants to buy property as cheaply as it can. If an owner agrees to sell too cheaply, it’s because the government does not have to look out for a property owner’s interests. Like any real estate buyer, the government wants to pay the lowest price.
What is the Initial Offer?
In most cases, the government will make a initial offer for your property. This will mostly likely come in the form or a letter which the government will present based on a cost estimate or appraisal. This is a staring point from a negotiating point of view. The government does not expect you to accept this amount nor should you consider it. If the matter is turned over for condemnation, the government must deposit this amount with the clerk of court. As a landowner, you are entitled to receive 50% of this deposit once the matter is filed. However, the government will often allow you to accept 100% of this offer. This is called a 100% draw down. You should note that accepting this money immediately is not always in your best interest. State law requires the government to pay 8% interest on any money held on deposit in certain situations. Accepting this award would preclude you from this statutory interest. Therefore, you need to discuss with an attorney and make a decision that maximizes your recovery.
What if I don’t want to the government to take my property?
Typically, a landowner cannot stop a government agency from taking your property. However, as a landowner, you have a right to file a challenge action which contests the public purpose of the project. If the landowner successfully prosecutes a challenge action, the government will not be able to take your property.
Does it matter if the government is taking my home or business?
When discussing just compensation, it does not matter if you the government is taking your business or private residence. The law requires the government to compensate you for the loss. However, when discussing relocation assistance, the law requires the government agency to follow certain procedures depending on whether the matter involves a commercial or residential tract of property.
What is relocation assistance?
Relocation assistance in a state and federal obligation the government agency must provide displaced landowners and tenants. Typically, if the government is attempting to take the entire piece of property, it will offer relocation assistance. Relocation assistance is statutory and varies depending on whether it involves a residential or commercial move. The right to relocation assistance is very fact driven and provides landowners and tenants options. Therefore, you will need to discuss these options with an attorney to determine what suits your situation and will entitle you to the maximum award.
Should I be concerned when the government says it will turn the matter in for condemnation?
State law requires the government to negotiate a potential condemnation matter prior to filing in an attempt to settle the matter. Government agencies will typically hire a company referred to as a “right of way acquisition company” which works as an independent agent employed to work out settlements with landowners prior to filing a condemnation action. Agents often only explain part of the process and will allow a landowner to think that turning the matter over to condemnation is a bad thing insinuating a threat. The truth is that condemnation gives the landowner much more control over the case.
Condemnation allows the landowner to utilize the various rules to prosecute the action and receive the funds faster than if the government did not file an action.
The government gave me an appraisal Aren’t they all the same?
In most cases, the government agency seeking to take your land will provide you an appraisal. This appraisal will form the basis of the government’s opinion on what you should receive as just compensation. Appraising property is a subjective analysis which varies widely. Two appraisers can and often have very different opinions on the amount of just compensation a landowner should receive in a condemnation action. Therefore, a landowner should always question an appraisal provided by an agency and seek a second opinion.
Since the government is required to pay me the fair market value for my property under the eminent domain rules, shouldn’t I just accept the offer given to me?
No. Fair market value may vary dramatically depending upon the highest and best use that is selected for the property. The government will frequently, if not usually, choose a lesser highest and best use for a property it seeks to acquire through eminent domain. This justifies the government offering to pay a low “fair” market value for land it seeks to acquire. Property owners should insure the correct highest and best use is applied to their property. This may often be different from the actual use employed by the current owner.
What criteria are important for selecting an appraiser for an eminent domain case?
An eminent domain appraiser should meet the following standards:
- Thorough understanding of eminent domain valuation rules;
- Experience with property type being acquired;
- Ability to write a comprehensive and thoroughly reasoned appraisal report; and,
- Ability and experience as a witness in court. Learn more about the importance of selecting an appraiser in eminent domain law.