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Understanding Eminent Domain

Wednesday, February 6 2013 3:38 PM
Eminent domain is the right of a government entity or other lawfully designated authority (such as a utility company or pipeline) to take private property for public use without the consent of the owner of the property. The government entity or company is known as the "condemning authority" in eminent domain/condemnation law.

While the law allows a landowner to contest the validity of the taking, it is unusual for a challenge of this nature to be successful. So long as the taking is for a public purpose, courts generally allow the condemning authority to proceed with its taking. The taking may be a total taking (such as certain buildings along Kellogg Avenue in Wichita taken to expand Kellogg, and buildings taken to make way for the Intrust Arena project) or a partial taking (such as taking a strip of land to widen a street or a obtain a pipeline easement). The Fifth Amendment to the United States Constitution provides that private property cannot be taken without the payment of "just compensation." What constitutes "just compensation" is most often at the heart of eminent domain proceedings.

Condemning authorities generally begin by negotiating with the landowner. The authority makes a money offer to the landowner. The landowner can review the proposed taking and the compensation offered and can settle with the authority. When that occurs, a simple real estate transaction has been concluded. Many cases are concluded in this manner.

In evaluating offers from condemning authorities, landowners should be sensitive to the effect the taking will have on the remainder of their property. For example, if a commercial building loses an access point to a highway or street, the loss to the owner cannot be measured merely by how many square feet are taken. Additional considerations relating to traffic flow and likely loss of some of the property’s income-producing abilities must be taken into consideration. Even underground pipeline easements must be carefully examined to determine what overall effect the taking will have on the above-ground operations of the landowner.

If negotiations do not lead to a successful conclusion, the condemning authority institutes formal condemnation proceedings in the county in which the property is located. A lawsuit naming the property will be filed. Once filed, the "administrative" side of condemnation begins. The law provides that three appraisers will be appointed by the court. The appraisers will view the property and hold a hearing. At the hearing, the condemning authority and landowner can present testimony and documents to demonstrate to the appraisers what "just compensation" for the taking should be.

In a "total taking" situation, the question will be "what is the fair market value of the property?" That determination can be made by examination of comparable sales of property, by use of an income approach to capitalization, or by a depreciated cost basis. If the taking is a partial taking, the appraisers must determine the value of the property "before" the taking and then determine the value of the property "after" the taking. The just compensation is the difference between those numbers. Kansas law provides a list of 15 factors for the appraisers to consider in making their valuation determinations.

Following their work, the court-appointed appraisers make a determination of just compensation to be paid to the landowner. Once that determination is made, the condemning authority must pay into the clerk of the district court the amount awarded by the appraisers. If either the condemning authority or landowner is dissatisfied with the award, they may appeal the award.

If an appeal is filed, the condemnation moves to the "judicial" side of condemnation. In the judicial proceeding, the matter will proceed as a civil case, with document production, depositions and trial to a jury. A jury will determine the amount of just compensation.

At any time in these proceedings—be it in connection with the informal negotiations, the administrative proceeding or the judicial proceeding—either party can retain the services of professional appraisers. Those appraisers can value the property and guide the determination of just compensation.

Attorneys can also be engaged at anytime in these proceedings. While a landowner is not required to have an attorney involved on their behalf, the condemning authority often will, placing the unrepresented landowner at something of a disadvantage. Attorneys familiar with the condemnation process can often assist landowners in maximizing their recovery.

Fleeson Gooing has handled many condemnations for landowners. Steve Robison and Steve Stark of the firm have significant experience in this area and can assist landowners with their own determination of the value of the taking for negotiation purposes. If necessary, they can assist landowners in choosing and engaging appropriate independent appraisers, and can then formulate and present the landowners’ best case to the court-appointed appraisers or jury.
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