Eminent domain

A legal term for one of the “sovereign” powers inherent in all governments, eminent domain allows for the taking (with “just compensation”) of private property for public use without the consent of the owner. The government exercises this right, by either judicial or administrative proceedings, through condemnation. The need for eminent domain is predominately based on growth. As population increases, the demand for land use also grows, along with increasing needs for all kinds of public goods and SERVICES such as sewage-treatment systems, hospitals, bridges, highways, cemeteries, and other forms of INFRASTRUCTURE. The idea of eminent-domain compensation comes from 17th-century judges and legal scholars, such as Hugo Grotius and Samuel Pufendorf. In the early 1600s, the English Parliament would authorize the taking of property and the amount to be paid as compensation, or it would provide a judicial review to determine the amount. In the American colonies, legal proceedings evolved allowing for landowners to make statements concerning the question of compensation. Unlike Anglo-American law, the French and German systems require that compensation be paid in advance of the takings. There are fewer general statutes allowing for blanket authorization of condemnation for specific public projects (such as highways) than there are in the United States, and often each case of condemnation has to be authorized by that country’s government. The U.S. Constitution deals specifically with eminent domain in the last clause of the Fifth Amendment, stating: “ . . . nor shall private property be taken for public use, without just compensation.” The issue of property takings is not limited to those at the federal level. Section 1 of the Fourteenth Amendment extends the limits to state and local levels by declaring: “ . . . nor shall any State deprive any person of life, liberty, or property, without the DUE PROCESS of law.” Additionally, several state constitutions limit eminent- domain powers. As the Industrial Revolution developed in the United States, quasi-public CORPORATIONs such as railroads were able to acquire private property for their own use. Some STATE COURTS reacted to this by interpreting the “public use” clause in its strictest sense, that public access must be allowed to the property taken, while other states required only that the public benefit in some manner from the taking. This situation created a legal debate that lasted for decades, although current U.S. courts’ interpretation of the amendment tends towards the “public benefit” theory. Until the 1930s, “public use” was defined to include schools, roads, dams, government buildings, and other public entities. Lately the concept has been expanded to include the resale of private property to private owners for urban renewal, housing developments, and similar programs that generally benefit the public. Critics claim that governments often tread a fine line between what benefits the public and what is essentially ECONOMIC DEVELOPMENT in the guise of public interest. In a basic condemnation situation, a single person owns the property; however, a great deal of property in the United States is not held in such a simple manner. Often ownership involves holders of easements, MORTGAGEs, OPTIONS, and leases. Leaseholders are particularly significant in number, since land is often leased for residential, agricultural, industrial and commercial reasons. This situation creates a two-step legal situation: the government is only required to settle with the landowner, but often another hearing determines how those LEASING the property are compensated. Many states and the federal government have “quick taking” statutes that allow the government to take title and possession before the price is decided by the courts, provided an adequate security deposit is offered. Generally the amount of compensation due is the fair MARKET VALUE of the property taken. Fair market value is interpreted as the price for which the property would have sold in the absence of condemnation, including not only the existing use value but also the best use for which the property may be utilized. Problems often arise from the definition of a fair market: when there is no market or DEMAND for the condemned property; when adjacent properties rise or fall in value because of the government projects (some of which end up being condemned at a later date); or when the taking involves less than full ownership of the property. Some states, such as California, allow for the compensation for business GOODWILL losses (based on the reputation and location of the business), but these are not recoverable in federal-takings cases. Probably the biggest eminent-domain issue in recent years has been the case of regulatory takings. In this situation, a new law, regulation, or government action under an existing statute (such as the ENDANGERED SPECIES ACT) results in a decrease in the value of the property, generally because of restrictions placed on its utility and development. This instance, where land has not actually been formally seized under eminent domain, is known as inverse condemnation, and critics maintain that the owner is still entitled to compensation for the loss of property value. As of this writing, almost every state in the union has introduced legislation regarding regulatory-takings compensation.