For property owners, the process of eminent domain — the legal proceeding through which the government can acquire private property for a public purpose — can be a long and intimidating journey. Once an owner becomes aware that the government might seek to acquire a private property interest (which is not limited to tangible real estate), the property owner should (and is strongly advised to) begin to take steps to protect their right to receive just compensation from the government. However, once an owner receives notice that the government will seek to acquire a private property interest, the property owner must begin to take steps to protect their right to receive just compensation. This article provides a high-level overview of the eminent domain — also known as condemnation — process in Illinois.
What Is Eminent Domain?
In short, eminent domain is the government’s power to acquire private property for a public purpose upon paying just compensation to the property owner. The United States and Illinois constitutions give the government the right to take private property and give the property owner the right to receive just compensation for the taking and damage resulting to any property not taken. Roads, railroads, airports, parks, canals, sewers, bike trails, power lines, natural gas lines, solar farms — these are all examples of the types of projects governments undertake using eminent domain. Cities, counties and state agencies all have, to some degree or another, the power of eminent domain. The condemnation process can be better understood by recognizing several key waypoints.
Waypoint 1: The Notice & Negotiation
The government must make a good-faith effort to agree on the amount of just compensation to be paid to a property owner before a lawsuit to take private property for condemnation. The government will send the owner written notice that includes (1) a description of the property and/or property interest to be acquired; (2) an offer of just compensation to acquire the property and/or an interest in the property; and (3) the government’s basis for determining the offer. The notice should offer to continue negotiating the amount of just compensation with the property owner and state that if the parties do not reach an agreement on the amount of just compensation within a specified period of time — usually within 30 to 60 days after the owner receives the notice — then the government will file a complaint for condemnation to acquire the property.
Waypoint 2: The Complaint for Condemnation & Litigation
If the property owner and government are unable to reach an agreement on the amount of just compensation to be paid by the government, then the government will file a complaint for condemnation in the circuit court of the county where the property is located. The complaint typically contains the following information:
- names of all individuals and entities who have an interest in the property, including but not limited to anyone occupying or using the property.
- a description of the property including the legal description, common address and property index number.
- the statute, ordinance or resolution enabling the government to acquire the property by eminent domain.
- a description of the public purpose for which the government seeks to acquire the property.
- a statement explaining why it is necessary for the government to acquire the property to fulfill the public purpose.
- a statement that the parties were unable to reach an agreement on the amount of the just compensation.
- a description of the property interest the government seeks to acquire.
- if the government wishes a jury to determine just compensation, a jury demand.
The type of property interest the government seeks to acquire depends on the purpose for which the government seeks to acquire private property. The government may desire to acquire all or part of an owner’s property. Also, the government may desire to acquire all of the owner’s interest in and/or rights to the property commonly referred to as the fee simple interest. However, the government may desire to acquire less than all of an owner’s interest. For example, the government may desire to acquire an easement interest in and/or over private property. The easement gives the government the right to use the property for an indefinite period of time (i.e., a permanent easement) or a limited period of time (i.e., a temporary easement).
The government may seek to acquire fee simple interest in the whole property which is commonly referred to as a total taking. The government may seek to acquire part of the whole property which is commonly referred to as a partial taking. For example, for road widening projects, the government may only want to acquire a strip of property (a “strip take”) and a temporary easement on which it can store equipment and materials while it completes the project. A trained eminent domain attorney can help analyze the extent of the interest the government wants to acquire and how the project may impact the remaining property in other ways. More often than not, the impact on the remaining property will result in damage to the remaining property. Examples of other impacts include: changing setbacks or zoning requirements; removing driveway access; or changing the number or orientation of parking spaces. The government is required to pay just compensation for (1) the taking of part of the owner’s property and (2) damage to the remainder of the owner’s property.
Waypoint 3: Just Compensation, Fair Market Value, Damage to Remainder, Discovery, Appraisals & Other Expert Reports
In Illinois, eminent domain cases largely take the same form as any other civil case, including the discovery phase, where parties exchange information about the issues in the case. After the government files the complaint for condemnation, it is strongly recommended that the property owner evaluate whether there is a basis to file a motion to dismiss and traverse the complaint. The following are the typical grounds for filing a motion to dismiss: (1) the government lacks authority to condemn the property; (2) the government has not demonstrated necessity to condemn the property; (3) the condemnation is not for a proper public purpose; and (4) the government failed to meet the necessary steps prior to filing the petition to condemn. The court will hold a hearing on the motion and, at the conclusion of the hearing, will decide whether to grant or deny the motion. If the court grants the motion, then the complaint will be dismissed and the property owner has the right to receive the reasonable amount of attorney’s fees and expenses to defend against the complaint. The court will determine the amount of fees and expenses that are reasonable based on the evidence presented by the owner. If the court denies the motion, then the government and owner will proceed to the discovery phase as explained below.
The sole issue to be decided by the judge or jury (if requested by either party) in a condemnation case is the amount of just compensation to be paid by the government. “Just compensation” is identified by determining the fair cash market value of the property at its highest and best use on insert filing date of complaint. “Fair cash market value” is defined as the price that a willing buyer would pay in cash and a willing seller would accept, when the buyer is not compelled to buy and the seller is not compelled to sell. “Highest and best use” means that use which would give the property its highest cash market value on the date the complaint was filed. This may be the actual use of the property on that date or a use to which it was then adaptable, and which would be anticipated with such reasonable certainty that it would enhance the market value on that date. If the court or jury finds that on the date the complaint was filed there was a reasonable probability of rezoning the property, then the court or jury may consider the effect of such rezoning in determining just compensation.
During the discovery phase, the government’s attorneys and the owner’s attorneys retain experts, typically licensed real estate appraisers and real estate consultants, to develop and prepare written reports of their opinions as to: (1) the highest and best use of the property; (2) the fair cash market value of the property; and (3) the damages to the remainder property if the government only desires to take part of the property.
Waypoint 4: Settlement Negotiations, Trial & Award
During and after the completion of discovery, the government and owner typically engage in negotiations to try to reach a settlement on the amount of just compensation to be paid for (1) the taking of the owner’s property and (2) damages to the remainder property if the government only takes part of the owner’s property. However, if the parties do not reach an agreement, then the case will go to trial. At trial, the government and property owner will provide evidence supporting their respective theories of just compensation. If the parties have requested a jury, a jury will decide the amount of just compensation based on the evidence. If neither party has requested a trial by jury, the judge will hear the evidence and decide the amount of just compensation to be paid. Once the judge or jury awards just compensation, the court will enter an order requiring the government to deposit that amount with the county treasurer. Upon making that deposit, title to or interest in the property that is taken will vest in the government, and the government will have the right to immediately possess and/or use the property. Promptly after the government deposits the money with the county treasurer, the property owner and anyone else who has a right to receive all or any portion of the just compensation award will file a petition to withdraw all or part of the money. If there is no dispute as to who should receive the money, then the court will grant the petition and enter an order requiring the county treasurer to pay the money to the owner. If there is a dispute, then the court will decide the dispute and enter an order requiring the county treasurer to pay specified amounts of the money to the parties who have a right to receive the money.
A QUICK DETOUR: The Quick Take Proceeding
Normally, the government does not acquire title and possession of the property until it pays just compensation to the county treasurer after a trial. However, in some instances, the government may have the power to acquire the property using “quick take.” If the government has and uses this power, the following will occur: (1) the government will file a motion for a quick take hearing; (2) at the hearing, the government must present evidence as to the amount of just compensation to be paid and the owner and any other person or entity who has an interest in the property may, but is not required, to present evidence as to the amount of just compensation to be paid; (3) at the conclusion of the quick take hearing, the court will decide the preliminary amount of just compensation to be paid by the government so that the government may take immediate title to and possession of the property; and (4) typically within a month after the hearing, the government will deposit the preliminary just compensation with the county treasurer and upon making the deposit, the government will have the right to immediately possess and/or use the property. Thereafter, the government and owner will engage in discovery (See Waypoint 3 above), settlement negotiations and, perhaps, a trial (See Waypoint 4 above). If the case proceeds to trial, the following are important points:
- The evidence that was presented at the quick take hearing is not admissible at the trial unless the parties desire to present the evidence to the jury.
- The amount of the preliminary just compensation decided by the court at the quick take hearing is not admissible at the trial and, thus, not shared with the jury.
- The parties are allowed to present new evidence with respect to the fair market value of the property and damage to the remainder property.
- If the amount of final just compensation determined at trial by the court or jury is less than the preliminary just compensation, then the owner receives the lesser amount as final just compensation.
- If the amount of final just compensation determined at trial by the court or jury is more than the preliminary just compensation, then the government is required to pay the additional amount (the difference between the final just compensation and preliminary just compensation).
A seasoned eminent domain attorney can help property owners navigate this fork in the road.
The Long Road: An Appeal?
Any party can appeal the final order of just compensation in an eminent domain case. A party considering whether to appeal an award or outcome in an eminent domain case must consider many factors before deciding to appeal. Again, hiring the right attorney is essential to deciding whether to extend the journey or accept the trial court’s award.