Eminent Domain

AAA

DEFINITION of 'Eminent Domain'

The power the government has to obtain the property of an individual even without the person's full consent. In most countries, including the U.S., the land owner will be compensated for the land at fair market value. This power allows the government to seize land to be used in public enterprises such as roads, schools, or utilities installations. Eminent domain is generally found in some form in most common law nations.

Also known as "compulsory purchase" (U.K, New Zealand and Ireland), "expropriation" (Canada) and "compulsory acquisition" (Australia).

INVESTOPEDIA EXPLAINS 'Eminent Domain'

In the United States, eminent domain is a right granted under the Fifth Amendment of the Constitution. If real estate property is being seized, fair market value must take into account prices in the surrounding area, and payment must be made promptly. Eminent domain laws are frequently contested in the courts, as there have been cases of property being seized only to have a private business set up shop on the grounds, which goes against the intention of the power.

RELATED TERMS
  1. Market Value

    The price an asset would fetch in the marketplace. Market value ...
  2. Just Compensation

    Compensation provided to an owner whose private real property ...
  3. Condemnation

    The seizure of a property by a public authority for a public ...
  4. Nationalization

    Refers to the process of a government taking control of a company ...
  5. Zoning

    Municipal or local government laws that dictate how real property ...
  6. Expropriation

    The act of taking of privately owned property by a government ...
Related Articles
  1. Retirement

    Time To Rethink Your Post-Work Needs

    Don't rely on popular wisdom. Get the facts and plan for a comfortable future.
  2. Taxes

    Avoid Capital Gains Tax On Your Home Sale

    If you have property to sell and want to avoid capital gains tax, a Section 1031 exchange may be the answer.
  3. Retirement

    Navigating Government And Nonprofit Financial Statements

    Learn how to trace where your tax dollars and charitable donations are going.
  4. Insurance

    Avoid The No-Health-Insurance Penalty By Feb 15

    If you don't have health insurance, act NOW or you could owe penalties on your 2015 taxes, in addition to this year's.
  5. Fundamental Analysis

    What are the most common issues with Serial Correlation in stocks?

    Read about the concept of serial correlation in stock returns, and learn why market analysts are divided about the efficacy of trading based on stock patterns.
  6. Bonds & Fixed Income

    How do I calculate yield to maturity of a zero coupon bond?

    Find out how to calculate the yield to maturity for a zero coupon bond, and see why this calculation is more simple than a bond with a coupon.
  7. Fundamental Analysis

    What does the term 'invisible hand' refer to in the economy?

    Discover and understand the concept of the "invisible hand" as explained by Adam Smith, considered the founder of modern economic theory.
  8. Fundamental Analysis

    At what level is the current account deficit considered excessive, in terms of percent?

    Take a deeper look at the variables that impact current account deficits, and learn why not all types of deficits have equal impacts on a nation's economy.
  9. Fundamental Analysis

    What is the difference between yield and rate of return?

    Read about the differences between yield and rate of return. See why many novice investors often struggle more with the concept of yield.
  10. Investing Basics

    Is the airline industry in an oligopoly state?

    Learn about oligopolies and the current state of the U.S. airline industry. Explore how the Airline Deregulation Act changed the industry in 1978.

You May Also Like

Hot Definitions
  1. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  2. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  3. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  4. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
  5. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their ...
  6. Bank Guarantee

    A guarantee from a lending institution ensuring that the liabilities of a debtor will be met. In other words, if the debtor ...
Trading Center