Eminent Domain and the Condemnation process is a hot topic for many, and everyone has a question. The following questions are those that we have been asked most frequently by people going through the condemnation process. We hope that this dialogue is helpful and answers many of your questions. Please feel free to contact us with any other questions you may have about the condemnation process and valuation.
Q. What gives the government the right to take my land?
A. The right is called Eminent Domain, and it is a sovereign right of government to take private property for the good of the public. This is not a constitutional right. However, the exercise of this right is guided by the Constitution in the 5th and 14th Amendments.
Q. What gives the right of Eminent Domain to private utilities and other non-government businesses?
A. The legislative branch of government can elect to transfer this right to private businesses such as utilities when the greater good of the public argument can be made. Even though they are private businesses, they are regulated by the public, hence considered public utilities.
Q. When the condemnor makes their offer to purchase my property, must I accept it?
A. No. If the offer to purchase is accompanied with an appraisal you are in Stage 2 of the condemnation process. This stage provides you the opportunity to contract an appraiser of your choice to complete an appraisal of the Loss and Damages due to the taking. The expense of the appraiser is reimbursable to you if the fee is reasonable. There is a 60-day time limit in this stage. See Stage 2. Therefore, if you are unsure if the offer is just we recommend that you exercise your right to a second opinion.
Q. What if the offer to purchase is not accompanied by an appraisal?
A. Then it is doubtful you are in Stage 2. You may be still in Stage 1 and being served a Nominal Offer to Purchase (or similar heading). This offer is often accompanied with a nominal appraisal consisting of one or two pages and a "Waiver of appraisal" document. See Stage 1.
Q. Why don't they plan the roadway around my property? There are better paths.
A. The planners of the project most likely considered all alternative paths and selected the one affecting your property as the best route. It may harm you, but in the bigger picture it may be the least costly and most direct route. The planners of the project seek public input in the early stages of the process through public meetings.
Q. The condemnor is damaging so much of my property that I want them to take the whole property, but they refused. Why?
A. The condemnor is only to take that which they need. Excessive land takings are not allowed with the exception of land-locked properties, or an uneconomic remnant, where the law states that the condemnor must purchase it.
Q. Isn't the condemnor appraisal always low?
A. Not necessarily. If the appraiser used the best available sales data and concluded the best Highest and Best Use for the property, then the concluded value should be fair. However, it is always best to get a second opinion if you are unsure.
Q. My neighbor says you might as well accept the condemnor's purchase offer because you cannot fight city hall. Is he right?
A. No. You can fight city hall, so to speak, and you can win. Do not be intimidated by the largeness of the government or its agency. The U.S. Constitution and State law has provided a way that you should receive just compensation for the property being taken by condemnation. This law was created to protect you, the property owner, against an overbearing government.
Q. What happens if the condemnee's appraiser comes up with the same value as the condemnor's? What if it is higher? Lower?
A. If the two appraisers agree on the value, then you can be fairly certain the condemnor's offer was just and fair. If the condemnee's appraiser comes up higher, then you should use that value to negotiate a more reasonable compensation for the taking. If it is lower, then you should probably take the condemnor's offer.
Q. What can I expect to be compensated for in the taking?
A. You are to be compensated for the Loss, that being the loss of physical assets such as the land and any improvements, and Damages, that is the loss of value of the remaining land due to the taking. See the condemnation process for more on this topic.
Q. The road is going to take several of my trees in front of my house. Can I get paid for them or are they just part of the land?
A. Trees and their valuation are troublesome to appraisers. Many factors go into their valuation. The main issue is their contribution to the value of the property. One large, stand-alone tree in front of the house may be worth as much as a cluster of trees. However, several trees together may provide more than just a pleasant view, they may also be buffering the home from road noise and light, creating a more private and quiet homestead. Their removal could damage the overall appeal of the home, hence a devaluation in the home's value. Conversely, a cluster of trees lying in the back 40 acres may have little overall contribution to the value of the whole 40 acres. So a short answer to this question is "it depends." You need to confer with the appraiser on-site about the contribution value of the trees. Additionally, there are times when the tree has a timber value as well. This would be true with the so-called "plantation pines." Lastly, sometimes the compensation for trees can be computed at the cost to either replace them or move them. This, of course, would only apply to smaller trees.
Q. They want to put an electric high power transmission easement along my back property line. The appraiser said they would only give me 50% of the worth of the land the easement is on and nothing for damages. He said this is the industry standard because I still have use of the property. Is he right?
A. Often statements like this are made, however they are untrue. It may be true that the industry would like to pay only a set percentage of land value, but this is not the way things are done. The appraiser must determine on their own, using current data and research, what the loss of value will be. The percentages can range from almost nothing to 100%. Damages are also part of the appraisal question and should be paid if they truly exist. See electric transmission line easements.
Q. I have a large diameter gas pipeline going through my property. The gas company said they will pay me 25% of the land value because after the construction I will have full use of my property. Are they right? Is this a correct percentage?
A. Often statements like this are made, however they are untrue. It may be true that the industry would like to pay only a set percentage of land value, but this is not the way things are done. The appraiser must determine on their own, using current data and research, what the loss of value will be. The percentages can range from almost nothing to 100%. Damages are also part of the appraisal question and should be paid if they truly exist. See gas transmission pipeline easements.
Q. I am in Stage 2 of the condemnation process. I am very busy and would like to get the 60-day time limit extended. Will they do that?
A. Very, very unlikely. Consider the time limit and due date carved in stone and unmovable.
Q. Why do I need a second opinion appraisal if I already know the value of my property?
A. You may think you know the value, and you may be right. However, you are not a disinterested third party, nor a professional in the area of condemnation valuation. There is a lot to the Before and After analysis that even experienced non-condemnation appraisers do not know. This lack of knowledge can and often does hurt you in the end.
Q. I had my house recently appraised for a mortgage. Can't I use that same appraiser?
A. Yes you can, if he or she is an experienced condemnation appraiser. It is very important to get the best you can for you only have one opportunity. A typical residential or commercial appraiser who does mortgage appraisals probably does not have the special training and knowledge required to complete a good condemnation appraisal. This is a very specialized field where valuation, knowledge of the law and skills at being an expert witness are all required.
Q. The condemnor stated in their letter to me that they will reimburse me for "reasonable" appraisal fees. What are reasonable appraisal fees? Is there a standard?
A. This is a hotly debated issue. Currently, the higher courts of Wisconsin are tackling this very question as a result of an appraiser challenging a condemnor who deemed his fees "unreasonable." So far the condemnor has lost the argument and the courts have upheld that a predetermined fee for these services is not within their jurisdiction. What is reasonable? Well, first remember this is a specialized field requiring highly skilled, trained, educated professionals. Additionally, the appraisal report is not anything like the one you got for the purchase or refinance of your home. These reports must be narrative reports which read like a short book, often being 30-60 pages in length. A lot of effort goes into the analysis and research, hence the appraisal fees are typically in the thousand to thousands of dollars category. As a side note, our firm guarantees that our fees are reasonable and will not hold you accountable for the shortfall if they condemnor does not agree. We hold the right to pursue, on your behalf, the condemnor to capture the balance of the bill.
Q. How does the condemnor reimburse me for the appraisal fee? How long does it take?
A. Most appraisers require the clients to place a retainer down on contract and the balance of the fee payable on delivery of the appraisal. Then the property owner submits the appraisal with the bill marked "paid" to the condemnor within the sixty-day time period. Often the condemnor will either have their real estate agent deliver the reimbursement check in person or send it via U.S. mail. The typical time period is 30-days from when the condemnor receives the bill and appraisal.
Q. I heard that the condemnor will allow my appraiser to bill them direct. Is this right? If they do, who is the appraiser working for?
A. Some condemners will allow for what is known as "direct billing." This is an individual thing and you must ask your condemnor if they allow for this practice. Is it right? Well, on one hand if they do allow for the direct billing there should be no money out of your pocket, even for the short term. This can be a positive for you. On the other hand, control of whether the appraisal will be submitted to the condemnor is lost. Understand, you do not have to submit your appraisal to the condemnor if you do not want to. If you don't then you just pay the fee yourself and forego reimbursement. Additionally, there is some question as to who the client truly is if the condemnor pays the appraiser directly. In most cases the appraiser should be professional enough to rise above any impropriety regarding this billing procedure.
Q. If I have to go to court to fight the amount awarded for the taking, who pays my legal expenses?
A. If you go to a Commissioners hearing or court and win a judgment of 15% or $750 (which ever is higher) above the original Award of Damages, then the condemnor pays for your legal expenses and expert witness fees. If you do not get this amount, then you must pay your legal fees and expert witness fees. Keep in mind that neither the commissioners nor the court will know what the original Award of Damage was; that is kept in the blind as to not unduly influence the judges or jury. An example of this would be as follows: say the Award of Damages is $10,000. The condemnor's appraiser estimated the Loss and Damages at $8,000 and the condemnee's appraiser estimated it at $20,000. The only facts the commissioners or court will know are the two appraised values, not the Award of Damages. Now, in this example if you got a judgment for at least $11,500, then all of your legal and expert witness expenses will be paid by the condemnor. If you did not, and got instead, say $11,000, then the expenses are yours to pay.
Q. I heard that if you lose a court case against the condemnor that you must pay their legal and expert witness fees. Is that correct?
A. No. Win or lose the condemnor pays their own legal and expert witness fees.
Q. I heard if you lose in court and get a judgment less than the original Award of Damages, they you must pay the difference to the condemnor. Is this right?
A. Yes. If your judgment from the commissioners or court is less than the original Award of Damages, then you must pay the difference plus any interest deemed reasonable by the court.
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