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Explaining the powers of eminent domain

February 4, 2011
By MARIO D'ARTAGNAN, Real Estate in Perspective

Eminent domain is a power of government that allows the transfer of title to real property from its private owner to some government entity. Condemnation is the term used to describe the formal exercise of the power of eminent domain. Private real property can only be taken for the purpose of public use. Moreover, the property owner is to be compensated "justly."

Once a condemnation action is filed, the only thing remaining to be decided is the amount of just compensation. However, there are cases where the property owners have challenged the action on the basis that the property being taken is not for a public use. There are also cases where the compensation itself has been challenged on the basis of "fair market value."

Fair market value has been defined as the price that a willing but unpressured buyer would pay a willing but unpressured seller for the subject property, with both parties fully informed of the property's attributes, both good and bad. This approach also considers the property's highest and best use (it's most profitable use), which may not be its current use. For example, a parcel of land that may be used currently as a driving range (intermediate use), could easily be re-zoned for commercial shopping center. In other words, its use as a shopping center would have a higher fair market value.

Florida is one state where the property owner can recover attorneys' fees and appraisers' fees if he or she is the prevailing party in a valuation trial. Some states provide for limited recovery of such litigation expenses, typically when the owners' recovery exceeds the amount of the condemnor's pretrial offer. When a condemnation action is abandoned, the owners are also entitled (by statute) to be paid reasonable attorneys' fees and appraisers' fees they had to incur in defending the condemnation action.

The power of eminent domain has been around for centuries. Property is often taken for the purpose of widening or building new roadways, or for airports and government buildings. In some cases, only portions of a parcel are taken. For example, a small section of a corner lot may be needed to build a new turn lane. In any case, the key is that the property owner must be compensated on the basis of fair market value.

The foregoing is not intended to be legal advice. In the event you are served a notice condemnation, seek the advice of a real estate attorney.

Mario D'Artagnan is a broker associate with Miloff Aubuchon Realty Group Inc. He is a former investigator for the Florida Real Estate Commission. He is also a former real estate instructor and keynote speaker on the topic of agency law. He is a published author and veteran of the U.S. Air Force. For questions or comments, contact Mario at mariodartagnan@yahoo.com or 239-565-4445.

 
 
 

 

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