3.36 Condemnations

3.36.1

In General

Condemnation is the taking of private property for a public purpose through the power of eminent domain.

Eminent domain is the sovereign power inherent in the Federal Government and in a State or local governmental entity to take private property for a public use upon payment of just compensation to the owner.

The right of eminent domain is limited by the fifth amendment to the U.S. Constitution, which states in part: "No person shall be deprived of life, liberty, or property without due process of law; nor shall private property be taken for public use without just compensation." Private property may be taken without consent of the owner, whose only judicial complaints may be that the land was not taken for a sufficient public use or public purpose or, as is more frequently the case, that just compensation was not paid. The modern trend of the courts is to define public use broadly to include not only public facilities such as streets, railroads, schools, and parks, but also property which would provide intangible benefits, such as scenic easements. The actual appraised value of the property, at its highest and best use, at the date of the summons is generally the measure of valuation used to determine the amount of just compensation.

The power of eminent domain may be delegated by the states to counties, cities, villages, school boards, quasi-public corporations, and public utility corporations.

The delegation by the state of the power of eminent domain is generally granted by statute. A condemnor is the government agency taking the property whereas a condemnee is owner whose property is taken.

3.36.2

Nature Of The Acquisition By Condemnation

The acquisition of any estate by the right of eminent domain is an involuntary conveyance, and the procedure by which the right of eminent domain may be exercised is purely statutory. Therefore, the condemnation proceedings must be carefully reviewed in order to verify that all statutory requirements have been complied with fully.

3.36.3

Estates And Interests Which May Be Taken By Condemnation

The estates that may be subject to condemnation include, but are not limited to:

  • Fee Simple Estate
  • Easement Estate

It should be noted that occasionally neither the complaint nor the decree in a condemnation action will state the nature of the estate or interest being taken. The complaint will merely seek to condemn the real property or lands without any distinction whatsoever in regard to fee or easement. In these cases, no attempt should be made to describe the nature of the interest being taken. If you are unable to determine the nature of the interest, it should be regarded as an easement and not as a fee.

3.36.4

Examination Of The Condemnation Proceedings

The following items need to be considered and examined:

  • Statutory law provisions;
  • Condemnor's statutory authority;
  • Copy of condemnor's resolution to condemn (resolution of necessity);
  • Local Rules of Civil Procedure;
  • Notice of lis pendens (in some states);
  • Notices or summons served upon all those parties whose interests are to be acquired;
  • Notice or summons containing:

    The legal description of the property to be acquired;

    The names of all parties whose interest is to be acquired; and,

    The time and place of the hearing at which the petition or complaint is to be heard by the court.

  • Petition or complaint containing:

    The legal description of the property to be acquired;

    The names of all parties whose interest is to be acquired;

    A statement as to the interest to be acquired;

    A prayer for the relief requested;

    A reference to the statutory authority that grants the acquiring entity the right to acquire property by eminent domain;

    A statement concerning the purpose of the acquisition and that the purpose is a public one; and,

    An outline of the interest owned by the parties named in the proceeding.

    (Additional requirements may be necessary in various jurisdictions.)

  • That the legal description, appearing in both the petition and notice, describes accurately and without ambiguity the real property acquired;

  • That all parties, who have an interest in the real property to be acquired, have been named as condemnees (fee owners, lessees, tenants, life estate holders, encumbrancer, judgment creditors, etc.);

  • That service, either personal or by publication, has been accomplished according to law. See Publications;

  • That the hearing has taken place on the specific date;

  • That the court, following statutory guidelines, has determined the exact amount of proper compensation. To the title examiner, this issue is relevant only for the purpose of determining the amount of the title policy if the acquiring authority's title is to be insured, or in those few jurisdictions where the payment of the award determines the validity of the proceedings;

  • That the court order transferring title and possession has properly followed statutory guidelines;

  • That neither the issue of authority nor public necessity has been raised at the initial hearing;

  • That the compensation has actually been paid. In some jurisdictions, the owners may be entitled to a dismissal of the action if the award has not been paid within a certain number of days; and,

  • That a certified copy of the final decree or judgment is recorded in the recorder's or register's office in the county or counties where the real property is located.

3.36.5

Time of Taking (Condemnation)

The time of taking occurs when the award of compensation is deposited in the registry of the court unless a specific statute provides otherwise.

3.36.6

Quick-Take Procedure (Condemnation)

Some jurisdictions provide a statutory method for the acquiring entity to obtain title and possession of the real property prior to the determination of awards. Usually, this involves the requirement of a special notice given to all parties whose right to possession will be terminated, indicating the date upon which the petitioner will take possession. In addition, the petitioner is required to deposit into the court registry an amount either equivalent to or greater than the value of the property to be acquired. If the title examiner is requested to rely on a court order granting title to the petitioner prior to the filing of the award, the court file must be reviewed for the purpose of verifying that all the additional statutory requirements have been fully satisfied. In addition, the examiner should determine that the issues of public necessity and authority are ones which can no longer be litigated. Under no circumstances should reliance be placed on early title and possession (quick-take) where the issues of public necessity or authority are being or will be litigated.

3.36.7

Appeal Of Condemnation

If either public necessity or authority has been challenged at the initial hearing, the title to the property is not marketable or insurable until after the period of appeal from the final award has expired.

3.36.8

Federal Condemnation - Declaration Of Taking

The government of the United States has authority to take, by the exercise of the right of eminent domain, private lands for public purposes provided it satisfies the requirements of due process of law and pays just compensation for the taking.

The federal power of eminent domain is exercised under the fifth amendment and various statutes authorizing condemnation of property by the United States. 40 U.S.C.A. section 257 et seq.

Prior to August 1, 1951, condemnation proceedings in federal courts followed local state law, but now, the proceedings must conform with the Federal Rules of Civil Procedures in title 28, effective on August 1, 1951. The nature of the interest taken depends upon the particular statute authorizing the condemnation.

3.36.9

Declaration of Taking (Federal Condemnations)

From a title examiner's point of view, the significant aspect of federal condemnations is the Declaration of Taking Act of 1931 which provides:

"In any condemnation proceeding instituted by the United States in a federal court (outside the District of Columbia) for acquisition of any land or easement for public use, the petitioner may file in the case, at any time before judgment, a declaration of taking signed by the authority empowered to acquire the lands, declaring that said lands are thereby taken for the use of the United States, which declaration shall contain:

  • A statement of the authority under which and the public use for which said lands are taken;
  • A sufficient description of the lands;
  • The estate or interest taken;
  • A plan showing the lands taken; and,
  • A statement of the money estimated to be just competition."

The statute establishes that upon the filing of the declaration of taking and the deposit in the court registry to the account of the parties entitled thereto of the amount of estimated compensation, title to the lands "in fee simple absolute," or the lesser interest specified in the declaration, shall vest in the United States of America. 40 U.S.C.A. section 258a.

In numerous cases, the courts have reviewed the Declaration of Taking and have found it to be constitutional. Accordingly, the Company is willing to insure, based upon a Declaration of Taking, title in the United States free and clear of all liens and encumbrances, provided that:

  • A declaration of taking, sufficient in form and execution to comply with the statutory requirements, has been filed in the condemnation proceedings and has been properly recorded in the office of the (register) (recorder) of deeds of the county where the land is located.

  • An examination of the condemnation proceeding shows that: (1) all parties having an interest in the land have been named as defendants; (2) condemnation of the particular estate or interest (e.g., fee or easement) described in the declaration is sought and such estate or interest can be taken under the statute authorizing the condemnation; (3) the amount of the estimated compensation stated in the declaration has been deposited in court; and, and (4) the proceedings to date are regular.