What to do if the government wants your land by ‘eminent domain’

If a government entity wants to take all or part of your property by eminent domain, it’s required to pay you the land’s fair market value. Typically the government will send you a notice telling you what it thinks the land is worth, and offering to pay that amount. Its valuation will usually be based on an appraisal that it has commissioned.

Some property owners who get an eminent domain notice rush out and get their own appraisal, but this is often a mistake. It’s almost always better to talk with an attorney first before hiring an appraiser.

Appraisals for eminent domain purposes require special care. A “quick-and-dirty” or “off-the-cuff” appraisal that comes in too low can definitely hurt you, because it is admissible in court and can be used against you by the government.

If the government wants to take your entire property, the “fair” value it has to pay isn’t just its current value, but its value at its “highest and best use,” which could involve rezoning and redevelopment. Making such a determination might involve not just an appraiser, but also a civil engineer, a surveyor, a land-use attorney, and so on.

It’s even more complicated if the government wants to take just part of your land. Suppose, for instance, that the government wants to take 20% of your property to widen an intersection. Many people will assume that the “fair” value is the market value of that 20% parcel, or that it’s one-fifth of the market value of their entire parcel. Neither of these is correct.

Rather, the value of the “taking” is (1) the value of your current property minus (2) the value of the 80% that will remain after the taking. And in deciding the value of the remaining 80%, you’re allowed to take into account the effect of the taking itself. For instance, the fact that the remaining 80% will be located next to a larger intersection might make it less desirable for later residential development, because of increased noise and traffic.

In other cases, a partial taking might reduce the value of the remaining parcel by removing access to a road or otherwise making the property less desirable for various uses.

Another good reason to talk to a lawyer first is that there might be ways to fight the taking if you’d rather not sell. For instance, you might be able to offer alternative ways that the government can accomplish its objective without using your land, or as much of your land.

Many states have recently passed laws that make it more difficult for the government to take land for certain uses, such as creating an economic redevelopment zone.