What to Do When the Government Wants Your Land

Have you ever wondered what would happen if the government had big plans to develop an airport or another big project and your house was in the way? It's not a situation that most families have to deal with, but many will end up negotiating with the government for their property. Even if they have visions of refusing the sale or chaining themselves to the property, if the government wants their land for a legitimate purpose, it will almost certainly get it. So people need to be prepared.

Key Takeaways

  • Eminent domain entitles the government to take land for public use.
  • Property owners are rarely successful in stopping governments from taking their property under eminent domain. But the U.S. Constitution gives them the right to “just compensation."
  • Property owners may dispute the price offered by the government and negotiate for a better deal. Many are successful.

The Power of Eminent Domain

Eminent domain entitles a government—whether federal, state or local—to take the property that it needs as long as it's for legitimate public use. And the courts almost always defer to a government's judgment about what constitutes public use. The U.S. Supreme Court has even ruled that a government transfer of property from one private owner to another for the purpose of economic development is a public use.

Still, the Fifth Amendment of the U.S. Constitution also requires the government to pay "just compensation" for any property it seizes under eminent domain. This means that instead of fighting the sale, property owners are better off putting their energy and resources toward getting a fair price.

Reviewing the Government-Sponsored Appraisal

When the government decides it needs your land for a project, you will be notified of its intent by mail. The government may even send an agent out to talk to you. Before any kind of offer is made, the governing body will arrange for an appraiser to visit the property. The appraiser will assess its size and condition, as well as the zoning classification, location, accessibility, and current use. You will be given a copy of the appraisal. You must carefully review it for accuracy because it will play a big role in determining your compensation.

Negotiating a Better Price

A property owner will often be in a good position to bargain with a government negotiator for more than the initial amount offered, especially if there is support from other neighbors whose homes are also needed for the project. Different states have different procedures for negotiation of eminent domain cases, so you'll need to understand how it works in your state. It is probably best to hire a lawyer, at the very least to explain how the process works.

Once you have agreed on a price, you may be asked to sign a waiver that prevents you from suing if you find out that another landowner was offered more money.

If you cannot agree on a price, the situation escalates to a condemnation proceeding during which you can contest the sale or present a counteroffer. You can also dispute the scope of the land the government says it needs. It's possible that you may be able to prove that the government doesn't need as much land as it has estimated or that the appraisal was inaccurate.

The Bottom Line

In most cases, there is little you can do to stop the government from taking land under eminent domain, and once the deal is done you have no say over how the property is developed. Whether it's used to create new gas lines, build a school or build expensive condominiums in order to raise property values and, as a result, property tax revenues, it's out of your hands. The time to exert what power you have is before the deal is signed. So make sure to take your time and assert your rights before you give up that property.