Eminent Domain is the legal process in which the government takes property without the owner’s consent, but with payment of compensation. It is a common practice in California, as seen in Sacramento in both the Hazel Avenue improvement project and Madison Avenue improvement project.
Projects like these include “right of way acquisition” which means getting the property through voluntary sale or legal process. There are specific statutory steps the government agency must take in this process once it identifies the property it needs, as follows.
1.The Agency must first obtain an appraisal of fair market value.
2. The Agency then makes an offer to the owner of the full appraised value of the property. The offer must include a written statement of the basis of the offer; if it is an owner occupied residence, a copy of the appraisal.
3. The Agency must also offer a one-year leaseback agreement to the owner, unless the use of the property is scheduled to begin within two years of the purchase.
4. The Agency must offer to pay up to $5,000 for the owner to get their own independent appraisal .
If the parties cannot agree, and it has not been already completed,
5. The governing body of the agency must adopt a resolution of necessity, which among other things, states the particular public use for which the property is to be taken. Owners of the affected properties are given notice and an opportunity to be heard on the matter. Owners must make a written request to appear and be heard within fifteen days of mailing of the notice.
6. Prior to filing an eminent domain action, The Agency must offer relocation assistance for people who will be displaced. A displaced person includes resident owners, tenants, and subtenants.
There are circumstances in which the agency may offer to pay more then the full appraised value. The cost of the eminent domain lawsuit, the risk of a court award greater then the appraised value, and the risk of litigation delaying the project schedule, all make it worth it for the agency to up it’s offer. Property owners facing eminent domain should consult with an experienced Sacramento Real Estate lawyer.
While eminent domain continues to be a hot topic, especially in redevelopment projects where private developers will eventually be the beneficiaries of the exercise of the government’s police power, many projects are for run of the mill transportation and utility purposes. It can happen to anybody, and when it happens, the owner should become fully involved in the process.