What Is Eminent Domain?

What Is Eminent Domain?

By Charles Joseph | Editor, Financial Affairs
Reviewed by Corey Michael | Senior Financial Analyst

Eminent domain refers to the policy that allows the government to take private property and convert it into public use. The Fifth Amendment of the U.S. Constitution allows the government to take private property if it’s for a legitimate public purpose and the owner is adequately compensated.

This can include anything from constructing a public roadway, expanding a school, or other community-based projects. However, the owner must be paid a reasonable amount of compensation, determined by a fair market value. The goal is to serve the best interest of the public without infringing on individual property rights.

Related Questions

1. What is Just Compensation in Eminent Domain?

Just compensation is the requirement of the Fifth Amendment that the government must pay fair market value when it takes private property under the power of eminent domain. Fair market value is the highest price a willing buyer would pay and a willing seller would accept, both being fully informed of all potential uses of the property.

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2. Can I prevent my property from taken under Eminent Domain?

First thing’s first: You must get legal help. Laws regarding eminent domain vary widely, so it’s paramount to consult with an attorney who is well-versed in local property laws. However, it’s crucial to remember that if the government’s intent is determined to be legitimate and for public use, it might be difficult to stop the process.

3. What is the process of Eminent Domain?

The process usually begins with the government’s attempt to negotiate a purchase. If you reject the offer, the government files a court action and deposits the estimated value of the property with the court. following which, a hearing takes place to determine the property’s value. If you find the calculated sum unsatisfactory, you can appeal the decision.

4. What types of property can be taken under Eminent Domain?

Eminent domain applies to tangible real property (such as houses and land) and also certain types of intangible property (such as air rights, contract rights etc). The government cannot take personal property or ordinary contractual rights under this rule.

5. How is the compensation value calculated in Eminent Domain?

The calculation generally involves a professional appraisal of the property. The appraiser considers factors like property size, condition, location, and potential for development. These aspects help determine the fair market value, i.e., the amount a buyer would reasonably pay for the property in a free market situation.