Simply put, eminent domain is the power of the government (and certain private entities) to acquire private property for public use. How is this possible? Easy, because the United States Constitution and each state constitution gives government this right. For example, the 5th Amendment to the United States Constitution states: "No person shall be held to answer for a capital, or otherwise infamous crime,......nor shall private property be taken for public use, without just compensation."
The New Jersey Constitution, Article 1, paragraph 20 states: "Private property shall not be taken for public use without just compensation."
The Florida Constitution, Article X, section 6 states: "No private property shall be taken except for a public purpose and with full compensationtherefor paid to each owner........"
To the average person the above may all seem like legal mumbo jumbo, but these words, and those like them, have serious consequences. Just ask anyone who's property was taken by eminent domain. Recent years have brought about big changes to the law of eminent domain and to practitioner's in this area of the law. With the United States Supreme Court's decision in Kelo v. New London, eminent domain from state to state has been in a state of upheaval. Pun intended. For those who do not know, the Kelo decision validated New London's taking of private property for purely economic reasons. That is, New London's plans for the property was to transfer the land to a corporate entity who could then pay higher taxes on the land, thereby increasing the revenue base for New London which had previously fallen on hard times. Not for building roads, schools or any other use we've all become accustomed to viewing as a pubic use. Simply for the increase in taxes. As you can imagine the uproar was immediate and loud. This uproar was even louder when the United States Supreme Court held that New London's plan was fully within the confines of the United States and Connecticut constitutions.
However, almost as an afterthought the Supreme Court gave states the perfect solution by providing that nothing in their decision could stop states from amending their own constitutions and disallowing Kelo type takings. In response states across the country heeded the Supreme Court's advise. For instance, in response to the Kelo decision the Florida legislature enacted the following language into Article X, section 6 of their constitution: "Private property taken by eminent domain....may not be conveyed to a natural person or private entity except as provided by general law passed by a three-fifths vote of the membership of each house of the Legislature."
This amendment was clearly in response to the Kelo decision meant to disallow the transfer of private property through the use of eminent domain to private entities, most notably by Community Redevelopment Agencies.
As for New Jersey, legislative changes to the current eminent domain law, N.J.S.A. section 20:3-1 et seq., were proposed during the 2008-2009 legislative session. The Senate committee's substitute to those amendments were approved by the Senate Community and Urban Affairs Committee on June 19, 2008. No further action on the bill has occurred. Among the proposed amendments of significance are:
- Copy of appraisal which is the basis for the condemnor’s offer to property owner
- Payment by condemnor of a "location premium" to a displaced business
- If taking is pursuant to the Local Redevelopment and Housing Law, condemnor’s written offer cannot be less than the payoff amount of any bona fide mortgage lien on the property existing within 6 months of negotiations. Otherwise, the condemnor’s offer cannot be less than the condermnor’s appraisal
- Property owner given 45 days to consider condemnor’s offer, including requesting additional information and explanation, and can ask for an additional 25 days from condemnor which cannot be denied without good cause
- Eliminates the power of eminent domain within a “non-condemnation redevelopment area” by a redevelopment entity, but retains the power of eminent domain within a “condemnation redevelopment area” by a redevelopment entity, i.e. a municipality or an entity authorized by the governing body of a municipality to implement redevelopment plans and carry out redevelopment projects in an area in need of redevelopment
- Reimbursement of certain costs, including reasonable costs to verify appraisal of residential and small businesses; legal costs for property owner to review the basis for condemnation on residential and small businesses up to $500; lost rents for period of time between declaration of condemnation area and date redevelopment entity takes possession of property; restitution and expectancy damages for a property owner with an approved application for development under New Jersey’s Municipal Land Use Law
As one can see, the proposed New Jersey amendments offers much added protection to property owners and a new landscape for the eminent domain practitioner. At this point in time eminent domain projects are probably more affected by the current financial crisis than by any new or proposed legislation. That noise you hear is from property owners who hope that the power of eminent domain is on a very short death walk.
More to come.............
Steven E. Taylor Taylor Law Firm, LLC http://www.tlf-llc.com/
