RISMEDIA, October 21, 2009—Robert C. Bird, Assistant Professor of Business Law, University of Connecticut, is an expert on issues related to the principle of eminent domain. Simply put, eminent domain is the power of a government entity to be given authorization by the legislature or governor to take private property for public use without the owner’s consent and with due compensation to the owner(s). This ability for a government entity to seize property is guaranteed by the U.S. Constitution.
The very idea of one’s property being seized is anathema to the American psyche and is not taken lightly by either the government or the citizen(s) involved in a possible seizure. In this exclusive interview, Bird discusses the truth about eminent domain. Is it common, uncommon, easy, difficult, etc.?
MBS: Robert, what, if anything, has changed relative to eminent domain regulations since the Kelo case (Kelo v. City of New London), the last highly-publicized Supreme Court case?
RB: The Kelo case, while widely publicized, did not substantively change the law of eminent domain. Perhaps the best service that Kelo provided was that it informed the public of the broad range of an already existing power. After the Kelo case, legislation was introduced in a variety of states and at the federal level to curb the reach of municipalities arising from eminent domain. While some states did pass legislation ‘pruning’ the power of government entities to seize private land, many bills fizzled and never became law. The result today is that, while some states have adopted checks to prevent the worst excesses in eminent domain, Kelo is still stated law at the federal level and in most states.
MBS: What do agents and brokers need to know to perform their duties effectively if and when they are involved in a possible eminent domain case, keeping in mind that finding the proper counsel is crucial?
RB: Agents and brokers need to know that eminent domain is a constant presence in real estate practice. Government entities have great discretion in choosing what properties may be seized via eminent domain and what can be done with those properties once they fall under government control. That being said, eminent domain is the exception rather than the norm for government practice. Agents and brokers should be aware, however, that certain kinds of properties are vulnerable to eminent domain. Such properties include those affected by neighborhood blight, in the logical path of natural extensions of transportation corridors or locations that municipalities have been examining as targets for economic redevelopment. Even with these vulnerabilities, agents and brokers can be assured that the likelihood of a given parcel being subject to eminent domain action is rare.
MBS: What can/should an agent/broker advise a client/prospect to do who may be involved in an eminent domain issue?
RB: The most important advice to the client/prospect is to retain counsel immediately. Clients/prospects would be wise to obtain an attorney who specializes or has had extensive experience with eminent domain cases and is familiar with its procedural and substantive laws. Clients/prospects should also be made aware that they can challenge not only the taking itself but the appropriate price of the property to be paid to the landowner if it is seized. People should not go it alone when facing the threat of eminent domain. The expense of hiring an attorney will be well worth it in most cases.
MBS: When a person is faced with challenging an eminent domain seizure, what are the chances that they will win and not have the property seized?
RB: The truth is that if the municipality wants the property, they will most likely get it every time. However, most appeals brought by owners are based not on contesting the seizure, but rather on the so-called fair market value estimate being tendered. The first appeal would most often be to the local zoning board. If there is no acceptable resolution, then the case could be brought to the state Supreme Court or U.S. Supreme Court as happened in the Kelo case. The issue of fair market value is a tough one in that there are many variables used in determining the dollar offer: construction replacement costs; market sales approach; future use considerations; etc. People are often afraid to contest the estimate of value and take the first offer tendered. They fear that generating a court case would weaken their position, and instead of gaining greater remuneration, they will be forced to settle for less. Having the right legal advice provides the owner with the advantage of having someone who knows the right questions to ask the first time.
MBS: While the incidence of eminent domain may be rare, when it does manifest itself, it inevitably becomes a front-page issue in the community affected.
Marylyn B. Schwartz, CSP, is an expert in real estate and corporate sales training/management and team development. She is president of Teamweavers and a trainer for Leader’s Choice. To contact her, e-mail teamweaver@aol.com.
