If owners and buyers can reach agreement on the sale, then eminent domain is not needed. Instead, what has occurred here is no different from any other purchase of property. A purchase agreement is produced; eventually there is a closing on the property, and the buyer takes possession of the property. For all concerned, this is the best possible option. But what if there is no agreement between the owner and the buyer? Perhaps the disagreement is over price, or maybe the owner just does not want to sell. What happens then? Here is where the eminent domain process really begins.
If your property is being taken away for a public use, consult an experienced Woods Cross Utah real estate lawyer.
Should owners and buyers be unable to agree on a sale, eminent domain is a last resort. It may be necessary for the government to build a necessary road, bridge, or school. Eminent domain may be needed to prevent some individuals from wrongly holding up a necessary project or blackmailing the government and taxpayers into giving them more money for their property than they deserve. Eminent domain may simply be needed to get an important public job accomplished.
If eminent domain is to be deployed to acquire property, several things need to occur. First, the condemnor is going to have to adopt a resolution that declares a public use and its intent to condemn or take specific properties. At this hearing, several things must occur. First, owners must be given legal notice that their properties are going to be subject to a taking. This is more than perhaps a general notice. In many jurisdictions, owners must receive specific notice served upon them. At the hearing, the condemnor will state its reasons for the condemnation, gather information that will justify the public use, and perhaps even declare the public use. Members of the public, including the owners, will then be given the opportunity to state their reasons for or against the decision to proceed with the condemnation.
At the conclusion of these hearings, the government must finally declare that a public use exists to take certain properties and it must adopt a resolution, ordinance, or law declaring its use and the intent to take the properties via eminent domain. If this happens, again new efforts will be undertaken to negotiate a sale with the owner, but if unsuccessful, the owners will receive notice that their properties are being condemned and taken by a city or other government. This notice is served personally upon the owners.
Effectively, this is the beginning of a legal process that could go to court. Here, the owners can opt to waive a challenge to the taking. If so, they are really consenting to sell their property. If they do not waive, then they are required to answer or respond to the notice of condemnation.
What is now occurring is that the eminent domain is moving from a legislative matter to a judicial one governed by rules of civil procedure and eminent domain law. Rules of civil procedure are court rules that determine how parties notify one another of an intent to sue, what court the action will take place in, how to gather evidence, and a host of other issues. These are the rules governing litigation. Generally, once property owners have received formal notice of a condemnation suit, they will have a certain number of days, oftentimes 30, to reply with an answer. The answer needs to respond to the complaint or petition to take their property. The answer can assert that there is no valid public use, it can contest the compensation award, it can challenge the authority of the court to hear the dispute, or the owner can raise other counterclaims.
During this pretrial stage both sides can engage in what is called “discovery.” Discovery is the process used to disclose evidence to be used at a trial. This discovery may include requiring the opposing side to produce materials that might be useful in court. This could include materials regarding why the condemnor is taking the property, factors it used to determine the public use, and any other details that might shed light on its decisions. Other parties might also be questioned and other properties might be examined. If the challenge is over whether there is a valid public use and a determination was made, for example, that a specific property was blighted, evidence of blight might be examined.
However, if the issue in the case is over compensation, then opposing sides might bring forward their experts and evidence regarding how they calculated fair market value. At this point, formal appraisals are undertaken and information is produced regarding what the values of the properties in question are. All of this pretrial activity could take months.
At some point, if the condemnor and owner do not settle, there will be a trial. These are civil trials, and seldom are juries used. Instead, they are bench trials before a judge. If the dispute is over questions regarding whether there is a valid public use, the courts have said that they will give significant deference to legislative determinations. To some extent, the burden is on the property owner to show that there is no valid public use. They might try to show that the taking is for a private use or that there is some other reason to question the condemnation process. If the dispute in the case is overcompensation, then no side carries what is called the burden of proof. Instead, both sides present their evidence about value to the judge and the court ultimately makes the decision regarding fair market value.
Once the trial has concluded, the judge must then render a decision about the validity of the taking or compensation, or both. If no one appeals the decision, the court then issues a judgment; if the condemnor has won, title to the property in dispute is awarded to that entity. The owner is then given a certain amount of time to vacate the property and awarded compensation. If either party disagrees with the court decision, an appeal is possible. If it is the owner appealing, she may wish to stay the court’s order so that the change of title does not occur. How long might all this take? It could take months, if not years, depending on the complexity of the legal issues. However, this normal taking, is the basic process for using eminent domain. It is slow, very public and often costly, but the goal generally is to protect owners.
Inverse Condemnation Process
Inverse condemnation generally occurs in cases of regulatory takings or where the government acts in other ways that de facto result in the taking of property, but where no formal eminent domain action has been initiated. A suit for inverse condemnation allows owners to sue the government to force the payment of compensation for the taking of property.
There are several scenarios where inverse condemnation may be an appropriate tactic for owners to use to protect themselves.
Perhaps the government has enacted a regulation that is not aimed at abating a nuisance, or perhaps it overregulates. Maybe instead it denies all economically viable use of property or destroys all investment-backed expectations. These would be situations where regulatory takings occur and an owner might bring suit for inverse condemnation to compel compensation. But inverse condemnation may also be appropriate where the government undertakes other actions that effectively render a taking of property.
These could be situations where the government issues an excessive temporary moratorium on property development. Another might be where government action blocks access to property, or situations where it floods property. Another scenario might be a claim that a zoning ordinance is excessive and fails to serve or further legitimate state interests. An action for inverse condemnation might also occur when the government simply physically invades private property by illegally authorizing another party to trespass. All these are possible situations where the government has decided not to engage in a formal taking of private property but nonetheless the owner may be able to allege that this is what has happened.
In the case of inverse condemnation, the order is to compel the government to compensate the owner for his property losses. An inverse condemnation might also seek to compel the formal taking of the property, but in some cases an inverse condemnation proceeding might seek to halt the taking or argue that the action is illegal or unconstitutional. In these cases the owner may be asking the court for an injunction to halt the government activity.
If an inverse condemnation is brought demanding compensation, the owner first needs to demonstrate that a taking has occurred. Several tests have been employed or developed to demonstrate a taking. These tests include asking if a physical invasion of the property has occurred, to looking at whether the regulation advances a legitimate state interest. The owner carries the burden of proof to show that a taking has occurred. If an owner can show a taking, then the topic turns to damages and compensation. Here, owners will need to show that, as a result of the taking, their property was damaged and then they will need to assert a claim for compensation. The standard for damages is compensation for the fair market value of the loss of the property. In a court proceeding for inverse condemnation, all the rules of civil procedure, evidence, and for showing damages and being awarded just compensation are the same as they were in normal and quick-take proceedings. Owners who are unhappy with decisions also are permitted to appeal court judgments or decisions.
Determining Compensation And Fair Market Value
The constitutional standard is that the owners must receive fair market value for their property losses. To start with, the valuation of property is not something that just anyone can do. Owners may have a belief about what their property is worth, but such beliefs are often not accurate and, more important, not generally admissible in court as a valid way of determining property values. Instead, determination of just compensation, while ultimately determined by the courts, is often premised upon the expert testimony of appraisers who follow specific standards when seeking to value property.
Individuals who do eminent domain property appraisal are generally licensed at the state level and they are often members of professional appraisal societies. Beyond being licensed and trained, appraisers must follow specific standards. Appraisals for federal projects must comply with the uniform standards of professional appraisal practice. Additionally, all appraisals for federally related financial transactions must be made and reported in compliance with the Uniform Standards of Professional Appraisal Practice (USPAP) promulgated by the Appraisal Standards Board (ASB) of the Appraisal Foundation. Finally, to avoid conflicts of interest, an appraiser’s compensation may not be linked to the value of the property. In effect, one cannot pay appraisers based on a sliding scale fee tied to the value of the appraisal. This would create incentives to give inflated valuations.
For a property appraisal an owner must first hire an appraiser. Oftentimes the owner and the condemnor may each hire an appraiser or, in some cases, they may agree to hire one person to do the valuation for both of them.
The valuation process begins with appraisers identifying the property to be reviewed and ends when they report a conclusion of its value. This systematic process requires orderly planning, data gathering, analyses, reconciliation, and reporting. The goal is to arrive at a well-supported and documented conclusion of value that will stand up to legal scrutiny.
The basic appraisal process includes several steps. The first step is an accurate identification of the property to be appraised. This identification includes the legal as well as physical description. Legally, one wants to identify all the owners and limits on the property, that is, whether there are any easements or land use restrictions that limit or define some of the ownership interests. Not all owners have a fee simple absolute in their property. There may be other parties with legal interests who need to be identified.
An experienced Woods Cross Utah real estate lawyer can help you get the right compensation for your property.
Woods Cross Utah Real Estate Lawyer Free Consultation
When you need legal help for a real estate matter in Woods Cross Utah, please call Ascent Law LLC for your free consultation (801) 676-5506. We want to help you.
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506