Condemnation/Eminent Domain
Property Owners Guide to the Condemnation Process and Just Compensation in Connecticut
Eminent domain is the power by which the government has the right to take private property to accomplish a public project. Condemnation is the process by which the taking occurs. The Constitution guarantees that the property owner receive just compensation for the taking of his/her property. This guide should give you a basic understanding of what is involved in the condemnation process. While we trust this guide will prove helpful to you, there are some important matters, which we ask that you keep in mind.
- The questions and answers in this guide are—by necessity—general and not intended to apply specifically to your case. The facts of every case are unique. Please use this guide as it was to be used as a general overview and not a precise opinion on any particular issue in your case.
- This guide should not serve as a substitute for consultation with an attorney. Whenever you have a specific question about the condemnation process or the particulars of your case, always discuss it with a qualified eminent domain attorney. This summary is intended to serve as only one of several means of providing you with the information you need to understand your case and enable you to make well-informed decisions.
What is condemnation?
Condemnation is the power to take private property for a public purpose. The power of condemnation is also known as the power of eminent domain.
Who can take my property?
Federal, state, and local governments have the power to condemn private property, and this power has been delegated to many governmental agencies. Thus, the Connecticut Department of Transportation may have the power to condemn your property for highway purposes. The government has also delegated the power of eminent domain to the public utilities and in certain, very limited situations to private companies.
Can the state take my property for any reason?
No. The condemning authority may only take your property for a public purpose, not a private purpose.
Who decides whether the condemnation of my property is for a public or private purpose?
Only a judge can decide. Even if the condemning authority believes the condemnation is for a public purpose, a judge can rule otherwise and deny the government the right to take your property.
How will I know whether the government really wants to take my property?
In most cases, you will learn far in advance of the proposed construction date of a project that may require the taking of your property. Your first knowledge of the project may come from reading a newspaper article or talking to your neighbor.
In many cases, the public agency will hold a public hearing at which the agency will describe the boundaries of the project, so that you will be able to determine whether your property is needed for the project.
The condemning authority will also generally give you a written notice that your property will be taken and will give you a written offer to purchase your property prior to filing a condemnation action.
Does the government or condemning authority have the power to take my property?
It depends. The state and municipalities have the power of eminent domain. In addition, many state and local government agencies and public utilities have the power of eminent domain.
When a specific governmental body or public utility may have the power of eminent domain, that does not mean that it has the right to take your specific property.
If you do not consent to the condemnation, the condemning authority must prove to the court your property is reasonably necessary for a public project. The burden on the landowner challenging a condemnation is very high. While condemning authorities have most often prevailed in litigation to take the property, there have been several occasions in which the courts have denied the condemning authorities the right to take the property they seek.
Should I be doing anything before my property is condemned?
Is the word out? Is your property likely to be affected by a highway or other government taking? The time to act is now, not after the process is rolling.
Once the taking actually occurs and papers are filed, it may be too late to make critical decisions that could have an impact on your ultimate compensation. Documents establishing the legal status of ownership and any leasehold interests—for example, attorneys' guidance, input from an appraiser or other consultants—can often be obtained quite inexpensively. Your response even to preliminary overtures from government representatives can affect the final outcome.
The impact of a road project often involves more than initially meets the eye. In a partial taking of property, beyond the value of the square footage taken, often overlooked are such things as the effect of the project on the remaining property. This often results in a serious reduction in value of the property that remains.
In general, it is wise for an owner to seek the advice of an attorney when considering pre-condemnation actions, since the actions a property owner takes before the property is condemned may help or hurt the case.
The property owner should avoid taking positions, especially written positions, which may be used against him or her in the condemnation proceeding. If the property owner contests the tax assessment—for example, stating that the property is worth less than the city's estimate—the appeal may be used against the property owner if, in the condemnation case, the property owner asserts a higher value.
The property owner should avoid having the property appraised before consulting with a lawyer.
Leases and other agreements signed by the property owner prior to condemnation may affect the final award to which the property owner will ultimately be entitled. The property owner's attorney should be consulted on condemnation clauses contained within these documents. Further, the property owner should never produce leases, contracts, offers, and bids to the condemning authority without seeking the advise of an attorney.
The property owner should maintain the appearance and the condition of the property. Visual impressions, even sophisticated professionals, are important, and the condemning authorities' appraisers will be inspecting the property long before it is condemned. The property owner should always keep the property looking as good a possible and never defer maintenance. Landscape and curb appeal are important. Improvements made to the property will affect its fair market value, upon which just compensation is based.
Favorable land permits often enhance the value of the property. Where it is practical and prudent, the securing of a rezoning, subdivision approval, or building permit may result in higher valuation of the property. The property owner should not interrupt or defer development plans solely because of a pending condemnation. The decision of whether to apply for land use permits must always be weighed against the effect that a potential denial will have on the case. It is thus wise to seek the advice of an attorney before proceeding with a land use application if you think that your property will be the subject of a condemnation in the near future.
How will my property be appraised?
Appraisers generally use three methods of appraisal to estimate the value of real estate: the market approach, the cost approach and the income approach.
Appraisers also determine, for partial takings by the condemning authority, the extent (if any) of damages to the remaining property. In Connecticut, the courts follow the Before-and-After rule in determining damages for a partial taking; that is, the property is valued before the taking and then after the taking with consideration for the effect that the property taken and the project itself has upon the remaining property.
Often the greatest element of compensation is not the property taken, but for damages to the remainder. This is particularly true in road widening cases and instances where the condemning authority is only acquiring an easement. It is important that an appraiser is retained who understands the concept of damage to the remainder and will include this damage in his or her appraisal.
If I don't agree with the condemning authorities' offer, who decides how much money I get?
In Connecticut, if the condemning authority and the property owner do not agree on the amount of compensation for the taking of the property, the condemning authority must initiate a condemnation action by depositing the amount it believes constitutes just compensation for the taking with the Clerk of the Superior Court for the judicial district in the property including a tenant, who may then appeal for a reassessment of damages by the court. The money on deposit can then be disbursed upon court order to those who may have a record interest in the property, including a mortgage holder, the town tax collector, or the other encumbrancer as well as the owner.
It is important to realize that there is only a short six (6) month period to appeal for additional compensation. If an appeal is not filed within that period of time, our right to appeal is lost.
Following the appeal the court appoints a judge or a retired judge called a state trial referee to hear the case and reassess damages. The condemnation appeal is a specialized trial in which the condemning authority has determined to be paid. It is very important that the property owner retain the services of an experienced condemnation attorney to represent him/her as this proceeding will be the only chance to obtain the real amount of money necessary to compensate for the loss of or damage to the property.
Do I pay taxes on my award?
It depends. A condemnation is an involuntary conversion and is treated differently from other sales and other cases.
You will have a period of time to reinvest the proceeds of the case and defer your tax obligation until a later date.
If a portion of your award is considered severance damages (compensation for damages to property you continue to own), you may be able to defer payment of taxes on that portion of your award.
Portions of the award attributable to interest are taxed as ordinary income.
The tax deferral benefits of condemnation are also available to sales in lieu of condemnation. You may thus defer the payment of taxes on a sale to the condemning authority even if you settle the dispute without the government being required to file a condemnation action.
Contact Attorney Benson A. Snaider
Contact the firm today to discuss your condemnation and emiment domain issues. The firm serves all Connecticut communities and works on a contigency fee basis. You pay the firm nothing unless Benson A. Snaider, PC recovers for you.
