Is Eminent Domain Fair?
By Jim Palmer Jr.

If you have ever seen the Pixar animation movie called “Up” where the 78 year old Carl Fredricksen refuses to sell his home that is sandwiched between encroaching skyscrapers, you may have felt some empathy for someone who has been forced to vacate a property because of a legal doctrine called Eminent Domain. In many cases it doesn’t seem very fair, but when considered in the perspective of the greater public good it may make more sense.

In spite of the way we normally talk in the real estate industry, no one ever really “owns land”. In our legal system you can only own rights to land, you can’t directly own the land itself, in other words, to have complete claim to the land itself. You can’t even own all the “rights” since the state always retains the right of eminent domain.

The power of eminent domain allows the government to take private land for public purposes only if the government provides fair compensation to the property owner, which begs the question, “What is just compensation”? Government entities may agree to pay more than the going rate just to avoid the court process, even though in most cases a court will use un-inflated reliable appraisals as a trusted source.

This taking of private property for public benefit is known as condemnation and is mentioned in the 5th Amendment to the U.S. Constitution where it says, “…nor shall private property be taken for public use, without just compensation.” The term condemnation in this context is not to be confused with the same term used to describe a property that is uninhabitable due to defects.   

Private Citizens have the legal right to challenge such taking of private property, but in the past, courts have allowed eminent domain to be used even for private corporations when developing public utilities, like electric companies or railroads. Under what circumstances courts will allow use of eminent domain depends upon individual circumstances, but is always guided by past case law.

This doctrine was initiated recently by a local city government which intended to install a roundabout on a busy street intersection in order to reduce congestion and increase public safety. Upset property owners had the right to dispute the taking that was inevitable, but had to wait to see what a court would decide was fair compensation for the property.