For Indiana landowners, receiving notice that your property is being condemned can cause a sense of powerlessness. Indiana law grants many governmental entities — including cities, towns, counties, utility companies, school corporations and the Indiana Department of Transportation — the power to condemn property for public projects, but the process is essentially the same regardless of the entity claiming the property. Understanding the condemnation process, and your rights and responsibilities within it, can help you take control of the situation.
The condemnation or eminent domain process in Indiana consists generally of two phases:
- the good faith offer phase.
- the lawsuit phase.
The Good Faith Offer
Before condemning property, the condemnor must make a “good faith” offer to purchase the property from the landowner. For purposes of condemnation, a “good faith” offer is one that is intended to be based on the fair market value of the property. Often, a landowner’s first indication that his or her property is being condemned is a letter from an appraiser telling the landowner he or she will be visiting the property for purposes of preparing an appraisal on behalf of the condemnor. The element of “good faith” is generally satisfied if the condemnor’s offer is based on an independent appraisal.
The offer must contain a proposed purchase price and an appraisal or other evidence used to establish the proposed purchase price. The offer will likely include other documents, such as a proposed deed or easement. It will also contain contact information for the condemnor and provide information regarding the project for which the property is being condemned.
The landowner is not required to accept the condemnor’s offer, nor is he or she required to respond to it. The landowner has the right to seek the advice of an attorney or appraiser at any point in the condemnation process, and it is a good idea to seek this assistance as early as possible. Actions and decisions taken early in the condemnation process can substantially affect the landowner’s rights in condemnation proceedings and, ultimately, the amount of just compensation received by the landowner for the property.
If the landowner accepts the condemnor’s offer or successfully negotiates with the condemnor for a higher purchase price, the landowner can expect payment within 90 days after executing the acceptance documents. The condemnor is entitled to possession of the condemned property 30 days after the landowner receives payment.
Any time after 30 days since the condemnor made its offer, the condemnor may initiate a lawsuit to acquire the property by filing a complaint in condemnation in the county in which the property is located. The landowner may object to the complaint on certain limited bases, including that the condemnor does not have the right to exercise the power of eminent domain for the use sought. Such an objection must be filed within 30 days after the landowner is served with the complaint.
If no objection is made or the objection is overruled, the court will appoint three disinterested appraisers to assess the damages caused by the taking of the property. The court-appointed appraisers will work together to prepare and file a single report setting forth the amount of damages caused by the taking of the property. The damages assessment will include the court-appointed appraisers’ determination of the fair market value of the property taken as well as potentially other allowable damages elements. Both the condemnor and the landowner are entitled to file exceptions to the court-appointed appraisers’ report if they disagree with the amount. Exceptions must be filed within 45 days after the court clerk mails the report to the parties. If either party files exceptions, then the issue of damages will be determined by a trial, unless the parties settle before trial.
Once the report is filed with the court, the condemnor may deposit the amount of the court-appointed appraisers’ determination of the fair market value of the property with the clerk of the court. This entitles the condemnor to immediate possession of the property. The landowner may withdraw the amount deposited pending the ultimate trial; however, money withdrawn in excess of future court-awarded damages after trial (or settlement) must be repaid.
Navigating the condemnation process can be disconcerting for landowners — even savvy landowners with substantial real estate experience. This is why a landowner facing condemnation should consider hiring an experienced attorney early in the process to assist in obtaining just compensation for their property.