Eminent Domain Guide for Land Owners, By Harlan Hentges & Richard Winblad
If you’re reading this, somebody probably wants to take all or part of your property to build a road, pipeline, power line, or something else on your land, and you would prefer they went elsewhere. You’re not alone. Many people have been in your position. Congratulate yourself for doing research, which is the best first step. This is called “Taking”, “Condemnation” and “Eminent Domain”.
What is eminent domain?
Eminent domain is the power of the government to take (condemn) private property. In the United States private property can only be taken for public use and the owner must be paid just compensation. (United States Constitution, Fifth Amendment) The government has even delegated the power to some private businesses such as utilities or pipeline companies.
Do they really have the power of eminent domain? Can I Stop the Condemnation Taking?
Sometimes the answer is clear. If a state department of transportation is widening a highway, it is probably clear that property can be taken by eminent domain. Other governmental entities may include the federal or state agencies, universities, water departments, agency, county or city governments.
Sometimes the answer is not clear, especially when it’s a private company. You might be surprised that private businesses can use eminent domain. These can include pipeline and utilities companies or neighborhood developers. Determining whether they actually have the power of eminent domain can get complicated. For example, eminent domain can be used for some oil and gas pipelines and not for others. The person communicating with you should be willing and able to explain exactly why and how they have the power of eminent domain. Don’t be afraid to ask and expect a clear answer. If the answer is not clear, dig deeper and don’t be bullied into accepting their offer. Sometimes cases must be taken to the Supreme Court to stop the taking. Read More.
What is the difference between an Private Easement and an Eminent Domain Taking?
A private easement is negotiated when a company does not have the “power” to take your land through eminent domain. If the company does not have condemnation powers you can absolutely refuse to allow them on your property. They must negotiate for a private easement. Therefore, you are in a great position to ask for greater compensation or make other requirements.
The Oklahoma Constitution states:
No private property shall be taken or damaged for private use, with or without compensation, unless by consent of the owner, except for private ways of necessity, or for drains and ditches across lands of others for agricultural, mining, or sanitary purposes, in such manner as may be prescribed by law.
What are the Landowner’s Rights Under Oklahoma Law in Eminent Domain?
You are entitled to receive just compensation if your property is taken for a public use.
Your property can only be taken for a public purpose.
Oklahoma law prohibits the taking of your property solely for economic development.
Your property can only be taken by a governmental entity or private entity authorized by law to do so.
The entity must notify you that it wants to take your property.
The entity proposing to take your property must make a bona fide effort to negotiate to buy the property before it files a lawsuit to condemn the property – which means the condemning entity must make a good faith offer.
You may hire an appraiser or other professional to determine the value of your property or to assist you in any condemnation.
You may hire an attorney to negotiate with the condemning entity and to represent you in any condemnation proceeding.
Before your property is condemned, you are entitled to a copy of the commissioners’ report which determines the injury you may sustain by the condemnation of your property and the amount of just compensation entitled to you.
If you are unsatisfied with the compensation awarded by the commissioners’ report, or if you question whether the taking of your property was proper, you have the right to a trial by a jury or review by the district court judge. If you are dissatisfied with the trial court’s judgment, you may appeal that decision.
How much should you get as “just compensation”?
If they take your land under eminent domain you are entitled to be paid for two things: (1) fair market value of the land they take; and (2) the decrease in value of what is left. The total of these two amounts is called “just compensation.”
Fair Market Value:
You are entitled to the fair market value of the land taken. Fair market value is the price a willing seller would receive from a willing buyer where neither are under an obligation to buy or sell. Often the condemner will have an appraisal of your property. Keep in mind that their goal is to acquire the property with smallest payment possible. The appraiser, who works for the condemner, knows that his job is provide the lowest possible value. Appraisals vary widely and you are not required to accept their value as accurate.
Damage or Diminution in Value to the Remainder
Taking part of your property often causes the rest of your property to lose value. The decrease (or diminution) in value to portion that is not taken is more complicated. If you’re a farmer and they put a four lane highway through your land, the value of the entire property is decreased because it cannot be operated as efficiently. If you’re have a business and they widen a highway into your only parking lot, the value of the entire property is diminished due to inadequate parking. If you’re a homeowner and they put a large gas line in your yard, the value of your house is diminished because home buyers would prefer to not have a large gas line in their yard. The amount you should be paid for the decrease in value to the entire property depends on your particular circumstance.
What happens if you don’t reach an agreement?
This is the part scares some people, but it shouldn’t. If you do not reach an agreement, the government company has to file a condemnation lawsuit. That doesn’t mean you have done anything wrong, and they still have to pay you “just compensation” as discussed above. If you disagree with the compensation you have a Constitutional Right to have the value determined by a jury of your peers.
An eminent domain case has its own special process unlike any other lawsuit. An explanation of the procedure could easily fill a thousand page book. In short, it is not a task to be undertaken by an attorney unfamiliar with the process. Often, landowners reach a better result is when the company or government is forced into litigation.
What will the negotiations be like?
You never can tell. The person who contacts you is like a salesman. Everything they do and say is intended to get you to say “yes” for as little money as possible. They might flatter you or try to intimidate you. They may share information, or they may be secretive. They might be good at their job or not. They might be honest or not. They are just people and they have no power to make you do anything.
There will be two things to discuss. One is the amount of money they will pay you. The other is the description of what they want to take. For example, if it is a pipeline, do they want the right to put things above the ground or only beneath the surface? If it is an electric line, do they want the right to place large metal towers with many lines, or smaller poles with few lines? Do they want to restrict you from building driveways, roads or planting trees? These and many other things can be negotiated to make sure that you are giving them only what they really need.
How much does it cost to have an eminent domain attorney represent me in eminent domain?
Obviously, you want to end up in a better situation by using an attorney than not. This may mean more compensation or a more favorable terms. Sometimes an attorney may agree to represent you on a contingency basis. This means they would receive a percentage of increase of value. For instance, if the initial offer was $10,000 and you ended up with $40,000, the fee would be based upon the increase or a portion of $30,000. At other times, the attorney may agree to an hourly rate. If the dispute goes to trial, the attorney may be entitled payment from the condemning authority or company.
Inverse Condemnation: When land is taken without going through the procedures:
Occasionally, land is taken by without going through any procedures. It may occur through a mistake about boundaries, water backing up onto a landowner’s property. In short, the condemnation procedures were not followed. In this case, the law provides a remedy called inverse condemnation with the same compensation as described above.
You should be proud of what you have, and you have every right to insist your property rights be respected. Part of being a property owner is knowing that in certain situations your property can be taken for public use, but that does not mean that you must accept what you are being offered. You don’t have to answer their questions. You don’t have to believe what they are telling you. Ask questions. Expect answers. Talk to you neighbors.