eminent domain

Real Estate Agent with Perry Wellington Realty

Eminent Domain


Federal and state governments have the power to take property

Follows from the power to wage war

Implied reservation to take it back at will

Inherent act of sovereignty – necessary to perform its functions

5th amendment – cannot take personal property without just compensation

Originally applied only to federal government – it has been read into the 14th amendment

Usually it is not the fed. Government (post offices, military bases, states did interstate)

Must be for public use but that usually is a pretty easy test


Why compensate?

  1. Efficiency – gives an incentive to invest and develop their property

  2. If it is for the public benefit then they all should bear the burden

  3. If no compensation then there are huge incentives to get it located somewhere else


Hawaii Housing Authority v. Midkiff p. 1098

Federal income tax issue – need to pay on capital gains except where by eminent domain

Court says that you just need a rational basis that it will work to satisfy public use


Poletown Neighborhood v. City of Detroit p. 1108

Plans to build a new GM plant in Detroit

Condemnation was challenged but court was persuaded that it was for the greater good of economic development


Berman v. Parker p. 1101

Major urban renewal project in DC – condemn slums and turn them into high rises

Justified on a rationale similar to nuisance – building code violations, health violations, etc.


Kaylo v. City of New London

Old naval base – Pfizer bought it and turned it into a research facility

Court approved in under eminent domain because it makes the community better

Dissent argued that it puts us all at risk for a better use of our property



Market value is the easiest way to do it

All of these people value it above market value or they would have sold it


What is a taking

Court has rejected the formalistic approach (title transfer) but does draw the line somewhere


Loretto v. Teleprompter Manhattan p. 1117

Runs cables along the building – no actual taking of the property

Court holds it is a taking because it is a permanent physical invasion of the property

There is no real economic damage but they take the right to refuse entry

Exceptions for safety and public use (license plate, mailbox, etc.)

Real reason here is that there is 3rd party ownership

Court only grants nominal damages


Hadacheck v. Sebastian p. 1132

State does not want to take his property but prevents him from operating a brickyard

It is probably a problem but not bad enough to be a nuisance

Courts usually determine what is a nuisance but here the legislature is doing it

Court finds that they didn’t really single him out so there is no taking


Harm test

If you are ending a nuisance then you don’t have to pay

If you are ending a public benefit then you do have to pay


Pennsylvania Coal v. Mahon p. 1140

State does not want coal rights – just regulates what they can and can’t do on their property

Owner sold the surface rights to someone else without the right of support

Court said that they couldn’t mine in a way that would undermine subsistence

All they have is the mineral rights and if they can’t use them then they have nothing


Too far test

If a regulatory taking goes to far then it is invalid – you must compensate them


Plymouth Coal Co. v. Pennsylvania p. 1143

Regulation requires that you leave a pillar of coal between your property and your neighbors

Average reciprocity of advantage – both owners are benefited by protection from flooding

Denominator problem – it depends how you characterize it

Are you taking all of the coal within the pillar (too far)

Or are you just taking a small part of all the coal on the property (not a true taking)

The court here said that it was only a small part of all the coal


Penn Central Transportation v. City of NY p. 1151

Air rights over grand central station in NY

Want to build on top of grand central station but it is subject to historic land preservation clause

Suit on the grounds that it took air rights – destroyed value

Federal law allows aircraft to cross above 500 ft

Court finds that there is no right to compensation as there is no taking

Part of a general scheme that benefits all (reciprocity of advantage)

Transferable development rights (can sell it to someone else)

Does not restrict all uses of the air rights, just this one

As compared to all the property value the air rights are just one part (denominator issue)



Military aircraft crossing property at the end of the airstrip

Court says it is a taking as it destroys the value of their homes

Only counts for those properties that the plane actually crosses


Bituminious Coal Act v. DeBenedictis

Exception for a mine owner who also owns the surface property

Holding was that the Mahon rule was effectively dead – certain regulatory takings are not takings


Lucas v. South Carolina Coastal Council p. 1171

Attempt to reinstate the Mahon rule

Court held that taking all the value in the lots was too much not to compensate (matter of fact)


Palazzolo v. Rhode Island p. 1193

Rejects the rule that anyone who acquires it after the legislation cannot challenge it as unconstitutional

Otherwise you can’t challenge it because you owned it prior and you can’t get value because buyer is not going to pay (no chance of getting it overturned)


Nollan v. California Coastal Commission p. 1199

Public can use the wet sand beach but not the rest of it

Set up is that you must get permission to build and you must give then an easement to get permission

Court decides that it is unconstitutional as a taking without compensation

The only rational reason is to take the easement

Can’t just take without compensation, even if it is a regulation


Dolan v. City of Tigard p. 1207

City will only allow a bigger hardware store if you give them access to upgrade sewers and put in a bicycle/pedestrian path

Court finds that there is not enough indication that the bigger hardware store is the reason the city wants these easements


Property slices

  1. Time slice – divide ownership over a period of time

  2. Space slice – divide the physical property (usually on a horizontal dimension)

  3. Use slice – restrictions or grants of use

You can use any combination of the three

Comments (2)

Charlie Ragonesi
AllMountainRealty.com - Big Canoe, GA
Homes - Big Canoe, Jasper, North Georgia Pros
You missed the Georgia Law about this passed in the last couple odf years that has effectively limited increasing reasons to sieze property and is now a model for other states
Feb 04, 2008 10:57 PM
Russ Ravary ~ Metro Detroit Realtor call (248) 310-6239
Real Estate One - Commerce, MI
Michigan homes for sale ~ yesmyrealtor@gmail.com
There are other laws limiting the reasons to take property.  I think there was a waterfront one up in Conn. or the Northeast somewhere.
Feb 04, 2008 11:10 PM