Eminent domain is a complicated legal process that involves the Federal Constitution, the North Carolina Constitution and numerous city and country laws and ordinances.
Due to the sheer number of legal bodies that are involved in such cases, an experienced eminent domain lawyer is essential to success.
Eminent Domain – What is the Process?
Stage 1 – Planning
Generally speaking, the first step to any condemnation case is the planning phase. This is when the condemnor decides a particular project is necessary for the public good. It can be a sewer line, sidewalk or highway project. A “plan” for the project is created. The plan shows the location of the project and tells the condemnor what property it will need to actually construct the project. Just because a particular plan shows your land in the path of the project does not necessarily mean that your property will be condemned. Plans are revised over and over again and even when the plans are finalized, many projects are never constructed due to many reasons such as lack of funding or because the project serves no real public purpose.
Prior to finalizing the particular location or route of a project, the condemnor will hold one or more public meetings to introduce the plan to the public. It is at this stage that property owners have the opportunity to suggest alternative routes for the project or even contest the need for the project.
Only in very rare cases are property owners are able to stop a project. In most cases, the benefit of the public project to the community as a whole will outweigh the negative impact it may have on your land. But just because you can’t stop a particular project does not mean that you should not be fairly compensated for your damages.
Stage 2 – Negotiations
Once the plan for a project has been approved, the condemnor will begin purchasing the land it needs to construct the project. During this stage the condemnor will send surveyors and appraisers out to estimate the value of the land it needs. The appraiser will also estimate the value of any improvements located on your property that the condemnor needs, including landscaping, sheds or, on occasion, all or portions of your home or office.
In very rare cases, the appraiser will also determine that the purchase of a part of your property for the project will cause the rest of your land to decrease in value (ex. like having someone cut off the bottom third of the $30.00 tie you are wearing-even though you still have two thirds of the tie, is the tie worth $20.00?) The appraiser then adds up all of the estimates that apply to your property and determines the amount of “damages” or “compensation” that the condemnor should offer you.
It is important to understand that surveyors, appraisers and other folks who are hired by the condemnor to look at your property are permitted by law to come on to your property for that purpose without it being considered trespass.
When the appraisals are complete, real estate agents (called “Right of Way agents”) for the condemning authority will approach the property owners and try to buy the land the condemnor needs for the project by offering property owners “compensation” as based on the appraisal. Typically, Right of Way agents have only limited authority to negotiate compensation for your land that is greater than the appraised amount. Right of Way Agents do not have the authority to revise the project plan as it applies to your property and all agreements reached between a property owner and the agent are subject to final approval by the condemnor.
In land negotiations, verbal offers are not legally binding. The property owner needs to see the compensation offer in writing before relying on it. Additionally, any special conditions negotiated between the property owner and the agent will also need to be in writing. For instance, if the agent has agreed that the condemnor will replant certain shrubs for you or replace your existing fence with a new one after construction, you need to have it in writing as part of the compensation offer. Property owners do not have to accept the Right of Way agent’s offer and certainly should never accept the first offer. Despite what the Right of Way Agent may tell you, it is negotiable.
If the offer is accepted by the property owner, the property owner will sign a deed or other document giving the condemnor ownership of the property it needs. The condemnor will pay the property owner the compensation amount. If the property owner and the Right of Way agent cannot agree on the amount of compensation the property owner is justly entitled to receive, the condemnor files a lawsuit.
Stage 3 – Lawsuit is Filed
If an agreement cannot be reached between the property owner and the agent, then the condemnor will file a lawsuit in Superior Court of the county where the property is located. This can be a scary step for the property owner, but it is often necessary to fight for “just compensation.”
The lawsuit includes a Summons, a Complaint, a Notice of Deposit and a Declaration of Taking. In most cases, the law states that the condemnor takes ownership of the property described in the complaint the minute the lawsuit is filed at the courthouse. In order to pay for the property it now owns, the condemnor is required to make a deposit with the Clerk of Court of the amount of money that the condemnor estimates is “just compensation” for the property taken. The deposit is usually based on one or more appraisals. Unless the property owner plans on challenging the condemnor’s right to take the land, the property owner is free to apply for and receive the money deposited at the courthouse. It is important to note that the property owner may take and use the deposit money without giving up his right to fight for more compensation.
Once the lawsuit is filed, the property owner will receive a Summons, Complaint, Notice of Deposit and Declaration of Taking. These documents are also referred to as “pleadings”. The property owner will usually receive these pleadings by registered mail. Occasionally the Sheriff’s Department will bring them to the property owner.
The day that you receive the pleadings is called the “date of service”. The date of service is important because it is the clock ticking on the time within which you have to “answer” the Complaint. The time frame will be either one hundred and twenty (120) days or twelve (12) months from the date of service, depending on the condemnor and the project. If you have any question about the length of time you have to answer the Complaint, you should review the information in your Summons.
Answering the Complaint requires a written document to be filed with the Court. You cannot answer the Complaint by telling the condemnor’ s attorney that you want more money and/or by continuing to negotiate with the condemnor. lf the property owner does not properly answer the Complaint within the required time frame, the property owner loses his right to argue that he is entitled to compensation greater than the deposit.
After the Complaint is answered, the discovery period begins. Discovery is when both sides exchange information about what each side thinks the property is worth and why. Negotiations will generally continue through the discovery period and often times a settlement can be reached.
Stage 4 – Mediation
North Carolina law requires all parties to a lawsuit to engage in some form of Alternative Dispute Resolution before going to trial. The purpose of the law is to force both sides to meet and make a reasonable effort to settle their differences in an effort to save everyone the expense and time of having the case tried by a jury. Most people choose mediation, a process where the parties to the case meet together in an informal setting such as an attorney’s offices.
Both sides agree on a particular mediator. The mediator is usually an attorney, but the law requires only that the mediator be certified. The mediator will bring all the parties together in one room and listen to each side explain the case and their position. The mediator will then meet individually with each side in an effort to explain the other parties’ position and point out the strengths and weaknesses of each side’s case. The mediator is not a judge and does not have the authority to decide which side has the better case. However, the mediator will work hard to help both sides determine what is fair and reasonable in light of what one could reasonably expect a jury to decide.
If a settlement is not reached during mediation, then the case proceeds to trial. It is still possible to settle the case after mediation and occasionally both sides will reconvene a mediation to attempt to settle it again.
Stage 5 – Trial by Jury
At trial, a jury of twelve people will determine the amount the property owner is entitled to recover from the condemnor. The jury does not know how much the condemnor has offered to pay or how much property owner wants for their land.
The jury will hear testimony from expert witnesses on both sides. This generally includes appraisers, realtors, engineers, etc. The property owner has the right to testify about the amount he/she considers to be just compensation for the land taken. In a condemnation action, the only questions that the jury gets to decide at trial are:
the fair market value of the property before the taking and;
the fair market value after the taking.
The difference between these two numbers is the amount of “just compensation” or “damages”.
The jury is allowed to consider not only the use of the land at the time of the taking, but also the “highest and best use” of the property. The jury is NOT allowed to consider speculative uses of the property, future plans of the property owner, emotional distress, pain and suffering or even inconvenience resulting from the project in its award of damages.
Settlement discussions are not disclosed to a jury. If the jury comes back with a lesser amount than the condemnor deposited, the property owner will have to pay back the difference. A typical trial will last 3 to 5 days.
Contact Your Land Condemnation Attorneys
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