Gwinnett County and North Georgia have experienced tremendous success and growth, and along with a vibrant economy comes an increased demand for roads, schools, parks, government buildings, power lines, and other public infrastructure. Our local prosperity has caused real estate values to increase steadily over the years. Land is at a premium in our area. The city, county and state government’s need for more property, combined with a corresponding high monetary value of private property in our area, pits the government’s power of condemnation/eminent domain against the right of private property owners to obtain just and adequate compensation when the government takes their land against their will.
Condemnation is a longstanding power of the government to take land that the government deems necessary for the public good. The government’s power to confiscate private property falls shortly behind the ability to put people in jail and send people off to war, as the government’s strongest powers. While under almost all circumstances the property owner is defenseless against the government’s decision to take their land, property owners do have the right under the state and federal Constitutions to obtain just and adequate compensation when their land is taken from them. The condemnation process is a complex process which was largely crafted by the government for the government’s benefit. Condemnation proceedings, more than almost any other legal proceeding, are filled with numerous deadlines, which could cause you to waive or lose your rights to be compensated if a deadline is missed. It is important to retain legal counsel early in the condemnation process to ensure that your rights to compensation are adequately protected. Even if you are extremely experienced and sophisticated in the field of real estate, the condemnation process is a process in which you need a legal advocate.
While government lawyers fight hard in most condemnation cases to keep the amount of money which the government pays land owners to the lowest level possible, the recent downturn in the economy, with its detrimental impact on government budgets, has created a situation in which the government will fight harder than ever before to keep condemnation payouts low. Also, while one would think that the number of condemnations would decrease during the current economic downturn, a large percentage of the special purpose local options sales tax (SPLOST) is budgeted for road projects, and the federal government is also a consistent source of road building funds. Additionally, governments and power companies are relatively recession-proof, have deep pockets, and have long-range budgets which are not as impacted by economic downturns as purely private businesses.
There are two main types of condemnation proceedings. The first is the “declaration of taking” method, which is utilized in most road-related condemnations. In a road-related condemnation, the government is able to take your land immediately by filing a condemnation lawsuit and depositing an amount of money into the registry of court which the government contends is just and adequate compensation.
The other type of commendation proceeding, which is employed in most other types of condemnations, such as school, park, government building, or power line condemnations, is the “special master” method. In the special master method, the government files a condemnation lawsuit, and the judge assigned to the case appoints a special master who is a local attorney familiar with real estate law, to consider evidence presented by the government and the land owner early in the proceeding. The special master hears evidence from both sides, and determines an initial amount of compensation to the land owner, which the government is required to pay into the registry of court prior to obtaining title to the land which it seeks to condemn.
Very rarely does the declaration of taking or special master method produce a result that is acceptable to landowners. If you have an attorney who is familiar with the condemnation process, you can preserve the ability to seek more compensation following the initial declaration of taking or special master step in the condemnation process.
If you have a larger condemnation case, you can proceed to an “interlocutory hearing”, in which three assessors/appraisers will hear evidence presented by both the government and the landowner, and determine an amount of just and adequate compensation. The three assessor panel is generally comprised of one appraiser selected by the government, one appraiser selected by the landowner, and a third appraiser selected by the two previously selected appraisers. If the three assessor panel’s decision is acceptable to both the government and the landowner, the case will conclude at that time. Either party has the right to appeal the three assessor panel’s decision to a jury trial.
Even if you decide not to participate in a three assessor panel, you are entitled to a right to a jury trial in most condemnation cases, as long as you work with your attorney to preserve your right to a jury trial. Between when the condemnation case is filed, and the jury trial, there is a “discovery process”, which usually last six months or more, in which the government and the landowner exchange documents and conduct depositions of their witnesses.
The way that you, as the landowner, prove the amount of just and adequate compensation, is to present layperson and expert witness testimony that your land was valuable before the taking, and that the taking has left you with a piece of property that is diminished in value. You also cross-examine the government’s witnesses, who almost always allege that your land had a low value prior to the taking and/or that the land has not been damaged by the condemnation. In most cases, it is necessary to retain a real estate appraiser and engineer who are capable of testifying at trial in your favor, in order to establish a credible case for just and adequate compensation. Based on the circumstances of your case, it might be advisable to enlist other experts, such as business valuation experts, surveyors, or building/development expert witnesses.
With all of the procedural and proof hurdles outlined above, it is easy to envision a scenario in which you, as the land owner, end up with unjust and inadequate compensation in a condemnation case. As a result of the pro-government condemnation process traditionally in Georgia, and in response to the United States Supreme Court’s Kelo v. City of New London decision in 2005, the Georgia General Assembly enacted the Landowner’s Bill of Rights in 2006. This recent condemnation reform bill was sponsored by Chairman Wendall Willard of the House Judiciary Committee, for whom I served as legal counsel during the 2008 Georgia General Assembly, and I was able to learn more about this new bill through representing Chairman Willard recently.
The following are recent reforms enacted as part of the Landowners Bill of Rights:
- The government is prohibited from using the power of eminent domain for private development purposes;
- Landowners are now able to participate in the selection of the special master in special master proceedings. Previously, the condemnor’s attorney nominated the special master, who was often the lawyer for another governmental entity, who predictably would award a low amount to the landowner;
- The government is now required to offer prior the full amount its appraiser believes is just and adequate compensation, when a fee simple interest is being acquired, prior to when a condemnation lawsuit is filed. Previously, and still with easements or property interests short of a fee simple interest, the government would frequently only offer a portion of the land’s appraised value;
- When a condemnation displaces you from your home, business, or farm, the government is required to give you 90 days written notice before you are forced to be relocated, and only after the money is paid to you;
- Georgia law now places the burden of proof upon the government to show that a condemnation is necessary for a public use;
- Georgia law now explicitly provides for relocation expenses when you are displaced from your home, business, or farm due to a condemnation. Previously, relocation compensation was only required under limited circumstances, which were governed by federal law.
- Other procedural hurdles for the government to jump through have been enacted, such as increased notice to landowners prior to a condemnation.
While the Georgia General Assembly has attempted to level the playing field in condemnation cases, landowners still have to fight to pursue just and adequate compensation when their land is condemned. There are many traps for the unwary which you can avoid by enlisting an attorney as soon as you learn that a condemnation is on the horizon.
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Matt Reeves is a partner in the litigation group at Andersen, Tate & Carr, P.C., a Gwinnett County, Georgia law firm. He focuses his practice on real estate, business and probate litigation.
Copyright © 2010, R. Matthew Reeves & Andersen, Tate & Carr, P.C.