The United States Constitution and your state’s constitution play an important role in protecting your rights when the government wants to take your property. The Fifth Amendment of the U.S. Constitution prevents the federal government from taking private property unless it is for a public use and the government pays “just compensation.” You may have heard this provision referred to as the Takings Clause.
Almost every state has also incorporated a similar provision into its own constitution that is more restrictive than the Takings Clause. For example, Indiana’s constitution contains a specific requirement that just compensation must be made before the property is taken. Colorado’s constitution has unique procedural requirements for condemnation proceedings, including the choice between a board of commissioners and a jury. While the constitutional provisions on condemnation vary widely by state, there are two legal principles present in all of them: just compensation and due process.
What makes compensation “just”? Put simply, just compensation seeks to quantify the landowner’s loss by determining the fair market value of the taken property. States differ on how this determination is reached and what factors are considered. For example, in Indiana, the calculation for just compensation for partial takings of property includes any “residue” damages, or the decrease in value of any remaining property. Other states allow for business losses (including damage to a business’ goodwill) to be considered in determining just compensation.
When a condemnor makes its initial offer to the landowner, it is often based on the condemnor’s appraiser’s determination of fair market value. It is not unusual for a landowner to disagree with the condemnor’s initial offer of just compensation. In fact, this is largely what leads the matter to court. When a court case is initiated, the property is usually reevaluated by court-appointed appraisers, who will reach their own conclusion on just compensation for the property. If the landowner or condemnor (or both) do not agree with the court-appointed appraisers’ determination of just compensation, the court proceeding moves forward and may be heard before a judge or jury.
Due Process of Law
The Fourteenth Amendment of the United States Constitution prohibits states from depriving any person of their property without “due process of law.” Here are how these terms have been defined for purposes of condemnation:
- A “person” includes both natural persons and corporations.
- A person is “deprived” of his or her property when the person is without the beneficial use and free enjoyment of it, even if the deprivation is temporary.
- The definition of “property” is quite broad — it includes every kind of property over which a person may have exclusive control.
“Due process of law” is made up of two aspects — substantive and procedural. The substantive requirement of due process requires that the condemnor is taking the property for a legitimate public purpose. What is considered a public purpose can be quite broad and is not limited to roads and utilities. The procedural requirement is typically satisfied when the landowner has received notice of the taking and has an opportunity to be heard — meaning an opportunity to have the taking reviewed by a court — before the condemnor can deprive him or her of the property. This does not mean a landowner can simply choose not to respond to the condemnor and avoid the taking of his or her property. Rather, a landowner is entitled to challenge the taking and the amount he or she receives for it.
A citizen’s ownership of property is recognized as an important right in the United States. Consequently, just compensation and due process of law are two safeguards in the condemnation process, protecting landowners from the improper deprivation of their property. However, how these safeguards are implemented and interpreted varies by state. It is important to have an attorney who is knowledgeable about your state’s condemnation laws to assist you through this complicated process.