Eminent Domain (Also Called Land Condemnation) – What is it?

When most folks hear the word “condemnation ”, they think of the government tearing down run-down houses. Although it is true that the government does have the right to prevent people from living in homes that are dangerous and even tear down a home if repairs are not made, the home owner still gets to keep the land on which the condemned house was located. The laws that govern condemned houses are very different from the laws that give the government the right to take your land and everything that’s on it.

Hundreds of years ago, all land belonged to the King. You just got to use it until the King decided to take it back. Over the centuries, the United States has managed to get rid of its kings and form a democracy where the Constitution gives the people the right to own property. But our forefathers did give the U.S. Government the authority to take land away from private property owners, but only if (a) the land taken is used for a public purpose and (b) the government pays “just compensation” for it.

The authority that gives the government the power to take private land for a public purpose is called “EMINENT DOMAIN”. The process by which the government uses it’s EMINENT DOMAIN authority is called “condemnation”. Nowadays, the words “EMINENT DOMAIN” and “condemnation” are often used interchangeably. In this handout, we will simply refer to both the authority and the process as “condemnation”.

Our land condemnation attorneys have been guiding families just like yours through the complicated eminent domain process.

Eminent Domain – Who Has the Power?

Over the years, the U.S. Government has shared its condemnation authority with the individual state governments and they, in turn, have passed on their condemnation authority to cities, counties and even private entities such as electric, gas, railroad or telephone companies. In this handout, we will refer to any organization that has the authority to condemn or “take” property as a “condemnor” or “condemning authority” and anyone who is having property taken from them as a “condemnee”, “land owner” or “property owner”.

Eminent Domain – What is the Condemnor Taking?

It depends on who the condemnor is and what authority the condemnor has. The State of North Carolina, through the Department of Transportation (“DOT) has the authority to take private property for public roads and highways. North Carolina cities and counties have the right to condemn private property for a variety of public purposes, including sewer, water or storm water systems, hospitals, cemeteries, libraries, city halls, fire stations, utilities, historic properties and even public wharves. Additionally, cities also have the authority to take property for streets, sidewalks and highways.

School boards have the authority to condemn property for schools. Private entities such as the gas company, phone company or the electric company have the right to condemn for the public purpose of providing everyone with their services.

Commonly Asked Questions

How Much am I Entitled To?

Under the law in North Carolina, the landowners are required to prove, by the greater weight of the evidence, that they are entitled to receive compensation, and the amount of such compensation.

The measure of damages is the fair market value of the property at the time of the taking (the date when the lawsuit is filed).

The fair market value of any property is the amount which would be agreed upon as a fair price by an owner who wishes to sell, but is not compelled to do so, and a buyer who wishes to buy, but is not compelled to do so.

The jury is allowed to consider not only the use of the property at the time of the taking, but also the uses to which it is then reasonably adaptable, including the highest and best use. However, the jury may not consider purely imaginative or speculative uses and values.

What if They Only Take Part of My Land?

Where only a part of a tract of land is taken, the measure of damages is the difference between the fair market value of the entire tract immediately prior to the taking and the fair market value of the remainder immediately after the taking.

In determining the value of the landowner’s remaining property after the taking, the jury may consider the benefits or increases in value that may arise from the project.

If the jury finds there is no difference in the fair market value of the entire tract before the taking and the fair market value of the remainder after the taking because of the benefits which result from the project, the landowner recovers nothing.

How Can the D.O.T. Take My Property?

Under the law, the State may take private property for the “public good” where they determine that it is necessary to do so in order to provide safer and more modern highways. The goal of the D.O.T. is to take into account the public’s well-being, feasible engineering, safety and economic standpoints, and the least amount of injury or inconvenience to the public.

What is the Process for Taking My Land?

After the D.O.T. selects and approves a route and the highway design is complete, right-of-way agents for the State contact all affected property owners. These right-of-way agents will provide information to landowners about how the project will be constructed, and will also obtain information about your property.

If you will be required to move, a relocation agent will also contact you to discuss assistance and payment allowances.

The D.O.T. will make you a written offer for your land which will include the amount offered as just compensation; a description of the property to be taken; and an identification of all buildings and other improvements which will be taken.

What Happens If I Don’t Accept the Offer?

When a landowner turns down an offer, the D.O.T. is forced to file a lawsuit in order to obtain title to the property to be taken. This is known as “condemnation” or the “right of eminent domain.”

The landowner then has twelve (12) months from the date the lawsuit is served to file an answer and request that a jury determine the amount of “just compensation” to be paid. It is our policy to file an answer as soon as reasonably possible after the suit is filed in order to move your case along more quickly.

Will the D.O.T. Negotiate With Me After Their First Offer?

Sometimes they will, sometimes they won’t. There does not seem to be any set pattern about their policy in this regard. However, usually the D.O.T. will not negotiate further in cases where they genuinely feel that a jury will not award more than the amount of the offer.

How Long Will it Be Until Suit is Filed?

The beginning date of construction generally dictates how quickly or slowly the D.O.T. will move in regard to your claim. Once they have finalized the plans and let the construction contracts, they must either obtain title to your land by voluntary purchase, or they must file suit in order to have the court determine that the D.O.T. is authorized to take your land against your will. There is no set time for how long the process will take, but ordinarily the suit will be filed at least sixty (60) days before the anticipated date that construction is to begin.

How Long Will The Process Take After The Suit Is Filed?

Condemnation suits have priority for scheduling purposes under North Carolina law. Nevertheless, it normally takes anywhere from nine (9) to eighteen (18) months after your answer is filed until the case is actually scheduled for trial. This time period can vary depending upon the number of cases pending and how often court is held in the county where your land is located.

What Is The Procedure After Suit Is Filed?

You must file a written answer in D.O.T. cases within twelve (12) months from the date the lawsuit is filed, requesting that a jury determine the amount of just compensation you should be paid. Once the answer is filed, the attorneys for both sides normally trade information about the names and credentials of their experts. It is our policy to continue efforts to settle your claim during this time.

Under current North Carolina law, mediated settlement conferences are now required in all cases. This means that, approximately six (6) months after your answer to the lawsuit has been filed, the Court will require the landowner, all attorneys, and the D.O.T. to meet with an impartial mediator to see if some reasonable compromise settlement can be reached. In the event that settlement cannot be reached, the case will proceed to trial.

When Can I Get The Money The D.O.T. Has Offered Me?

If you turn down the written offer the D.O.T. makes for your property, they will be forced to file a lawsuit. At the time the lawsuit is filed, the D.O.T. must pay into the Clerk of Superior Court the amount of money which they offered you in writing for your land. Once that money has been paid into the Clerk’s office, the landowner has a right to request that it be released immediately. We file a motion, at no charge, to assist the landowner in the release of these funds. In the event there are no liens against the property, these funds would be released right away and would be yours to keep, regardless of the outcome of the trial.

How Much More Money Can I Get?

Each case is different and there is no set formula for how much more a landowner will be able to get. Under the law in North Carolina, if a settlement cannot be reached, the property owner is entitled to damages for the loss of the fair market value of the property. A jury of twelve people from the county where the property is located decides the amount of the fair market value.

A 1995 survey by the Raleigh News & Observer showed that landowners who turned down the original written offer and went forward with their claim received an average of 62% more for their property. This means that the odds are good that your property is worth more than the original written offer.

Usually the best way to determine how much more you are likely to get is to obtain an appraisal from a certified real estate expert who would be qualified to testify on your behalf at trial. Once this information has been obtained, a realistic range of compensation should be determinable.

Will I Get Interest on the Damages?

The jury is told that their verdict may not include any amount for interest, despite the fact that payment may be made long after the taking. However, interest is added to the verdict by the judge, in the amount allowed by law (presently 8% per annum, from the date of the taking of your land).

What About Taxes?

Generally speaking, a landowner has two (2) years after the date that the funds are received to purchase or reinvest in comparable property. It is possible under some circumstances to obtain an additional extension of time to reinvest in real estate, provided the property owner is making a reasonable effort to do so.

This information is very general, and you should consult a tax professional for more specific information regarding your particular circumstances.

What Are The “Costs” Why Must I Pay Them?

In North Carolina, it is unethical for an attorney to accept employment in a civil case unless the client agrees to be responsible for the “costs” of a lawsuit.

Ordinarily, in land condemnation cases, the primary expense is for expert witness fees. In order to present a case properly, a landowner has to employ one or more expert real estate appraisers to testify as to the value of the property, based upon sales of comparable land. Certified real estate appraisers normally charge by the hour for the time spent in conducting the appraisal, as well as for the time spent testifying in court.

Our policy is to obtain an estimate from the appraiser in advance as to the anticipated expense. Depending upon the amount of land taken and the difficulty in obtaining information on comparable sales, each appraisal (it may be necessary to get more than one – the D.O.T. often has two or three) may cost anywhere from $250.00 to several thousand dollars.

Other costs may include subpoenas ($30.00 each) and depositions, which are infrequently done in these cases. It is our policy to request client approval of any expenses in excess of $50.00. Normally, costs other than expert witness fees will not be more than a few hundred dollars at most.

Will Any Of The Costs Of The Case Be Reimbursed?

If you win your case, that is, the jury awards you more than the written offer that was made, the judge will usually order the D.O.T. to reimburse you for most, if not all, of the court costs. These costs will include the subpoenas, depositions used at trial, and expert witness fees.

What Are Your Fees?

Our attorney fees are contingent upon success in the case. Our fee is one-third (1/3) of any and all amounts recovered above the sum paid by the Department of Transportation into the Clerk of Court’s office when the lawsuit is filed. In the event of an appeal by either party (only a very small percentage of cases are appealed), there will be an additional reasonable attorney fee due to the time and effort required. In the event your case is actually tied before a jury, the fee is forty percent (40%).

If the landowner does not recover more than the D.O.T. has paid into the Clerk’s office, there is no attorney fee whatsoever.

What Are Your Fees If They Make A Verbal Offer?

Our fees are based upon the written appraisal and offer made by the D.O.T. This is the same amount which is paid into the office of the Clerk of Court. Under North Carolina law, an offer to purchase real estate is not valid and binding unless it is made in writing.

How Much Do I Get For Building Or Other Improvements On My Land?

You will be given an option to retain any buildings or other improvements located on your land. You may purchase the buildings or improvements at the appraised retention value set by the D.O.T. and move the buildings to another location of your choice.

What Do I Get For Property That Is Not Accessible Anymore?

If you are left with a piece of property that has little or no value, the State will offer to acquire the uneconomic remnant along with the portion of the property they actually do need for the project.

What If I Have Other Questions?

If you have additional questions, please feel free to contact me and I will be happy to answer your questions. My toll-free number is (336) 765-7777.