WHAT YOU NEED TO KNOW WHEN THE GOVERNMENT NEEDS YOUR PROPERTY

By Heather A. Cunningham

If the government needs all or a portion of your property for a road improvement or other project, there are several things you should be aware of from the outset.  At any given time, there are a number of governmental projects underway or planned which will require private property.  The government does have the power to take private property for public use when the property is needed, whether or not the owner wants to sell.  This power is often referred to as the power of eminent domain or condemnation.  However, in return, the property owner is constitutionally entitled to receive just compensation.  U.S. Const. Amend. V; Idaho Const. Art. I,  14.

The government must negotiate in good faith to acquire the private property it needs.  How can you know whether a representative knocking on your door saying I'm from the government and I'm here to help is really acting in good faith, or not?

There are many things you should know and ask in order to make an informed decision.  When the government takes property, it holds all the cards: 1) it has the power to take your property whether you are willing to sell or not; 2) it has representative who know the rules, while most property owners have never been involved in eminent domain proceedings before; 3) it has more resources than property owners (there are engineers and appraisers working for the government and most owners do not have access to similar expertise); and 4) there are well trained negotiators sent out to talk to owners, and many people trust these friendly faces rather than cause trouble.
Things property owners should consider:

The Negotiator:  Right-of-way agents and negotiators from government agencies typically record their contacts with property owners in journals or diaries which are kept on file.  Be aware that anything you say may be used against you later, and that notes will be taken.  The negotiator does not normally tell owners that he is keeping a record of conversations or provide the owners with a copy.  In many cases, owners later dispute making some of the statements the negotiator attributes to him/her.  You may want to consider keeping your own record of who you speak to, when, and what was said so that later you have a record that can be compared with the government's.  
Also, some negotiators claim to be independent contractors not formally affiliated with the governmental agency.  Ask whether they are being paid by the government to acquire your property and whether they are primarily employed by government agencies and condemning authorities or by private individuals.  The fact that they are not on staff does not mean they are independent.  Also, know that talking to negotiators is optional and you are not required to speak to them.  If you say no to one negotiator, the government usually sends in another, and sometimes more than two.  If you do not want to speak to the government, tell them so in no uncertain terms.  Do not allow them to harass you.  Good faith negotiations are required; if you believe the government is negotiating in bad faith, tell them so and know that you are free to stop negotiating.  While you may want to do so, sometimes owners report that long after they tell the government they want their day in court, they continue to receive communications from government workers wanting to "try again" without offering any additional compensation or meaningful response to owner concern.  Do not let them wear you down if you believe you have valid issues that need to be addressed.

The Appraiser: Appraisers often claim to be independent as well, but not all of them are.  Ask about the appraiser's credentials, and ask where the appraiser is from.  Sometimes the government retains out-of-state appraisers, which may impact the appraiser's opinion of value.  Ask what percentage of the appraiser's practice is devoted to working for condemning authorities versus owners in condemnation cases.  Ask how many properties the appraiser is appraising for the relevant project, and in what time frame.  If the appraiser is completing 50 appraisals in two weeks, how careful will be he with your property?  What is the appraiser being paid and what is his/her assignment?  If the appraiser has been told to do a short form appraisal, that means the appraiser has been instructed not to consider any damage which may be caused to your remaining property as a result of the taking of a portion of your property.  Or, he/she may be instructed to consider irrelevant conditions or facts such as your personal plans for development or what you paid for the property when you bought it.  You are not required to give out this information to the appraiser.  Ask when the appraisal will be completed so you will have an idea of how long the process may take.  Be aware that sometimes a second appraiser is retained after the first appraiser is done, and in some cases, more than two.

Also be aware that anything you say to the appraiser may be recorded and later appear in the appraisal report.  In some cases, appraisers use comments from property owners such as "I didn't pay that much for it," or "I don't think it can be used for anything else," to justify lower values.  Therefore, if you are not an expert in real estate and condemnation, the safest thing is to avoid making any comments that can be used against you later.  Stick to facts about the property, not your personal opinions; they are not relevant in determining just compensation.

The Appraisal: When the appraisal is complete, the property owner should be provided with a copy of the report.  Note any errors in the report, particularly about the size of your property or other facts you are familiar with.  Are the comparable sales considered by the appraiser similar to your property?  Has the appraiser accurately described your property?  What adjustments has the appraiser made and why?  Do not accept an opinion simply because it is labeled fair compensation or just compensation; you have the right to evaluate the opinion yourself and determine whether you think it is fair.  You also have the right to take the appraisal to a lawyer familiar with condemnation or an appraiser of your own choosing and get an opinion from them about whether the appraisal has considered all the relevant facts.

What Is Just Compensation?: Under Idaho Code  7-711, property owners are entitled to be paid the fair market value of property taken, and any damages to the remaining land which are caused by the taking.  If the taking provides a special benefit to the remaining property which is not shared by other properties, the benefit offsets any severance damages (this is a rare circumstance).  If the benefits to the property are general and shared with other properties along the project (such as increased traffic counts or visibility for commercial property, the benefit cannot be used as an offset against any damages.  Fair market value is determined considering the highest and best use of the property, which may be different from the current use and may even differ from current zoning.  For example, agricultural land appropriate for residential development has a highest and best use as residential and should be valued accordingly, whether it is still a working farm or not.  Owners are entitled to fair market value, nothing less.  You do not have to accept the government's opinion, and you have the right to get your own opinion and have a jury determine just compensation if you disagree with the government.
Relocation Costs: If the taking of your property forces relocation, you may be entitled to relocation benefits, including moving costs.  Obtain details on all of your options prior to making a decision.

Property Tax: Who pays the property tax on the property taken, and when?  Often the owner is stuck paying taxes on the part taken for several years while the government processes the relevant forms.  Find out the details; if you give up possession of part of your property, make sure the government starts paying taxes on that part when they take it, not later.

Legal Description: If a portion of your property is being taken, will the government provide you with a legal description of the remainder?  Your existing legal description less the part taken may not be sufficient for all purposes.  If you have a valid legal description before the government project comes through, insist on being provided with one after the government comes through.

The Project: How complete are the project plans?  50%?  70%?  90%?  What do the plans show as far as what access will be available to your property?  Simply replacing the existing access may not work, depending on the overall project, your particular property and the highest and best use of your property.  What assurance do you have that the plans won't change after you sign an agreement?  If you don't have it in writing, you don't have it, period.  Be aware that the plans can be hard to read without an engineering background, and you may want to consider getting an engineer or other professional to assist you.  One of the major changes that people miss is a change in elevation.  Is the road being raised or lowered adjacent to your property?  This could dramatically alter your access to the property and/or consume more of your land to slope to the new elevation of the project.

Access: What access will your property have after the taking?  Be aware that there are physical access points and legal rights of access, which are different.  In many condemnation cases the government acquires not just a strip of your property, but also all of your legal rights of access to and from the public way.  This means in the future if your property redevelops it may have no access to the road adjacent to it.  This can have a major impact on value, which is often not considered at all by the appraiser.  Simply putting back in the same physical access you enjoy today does not mean your property will have the right to access in the future at that location.  Be sure to ask whether your access will be affected and then read carefully all documents.  Sometimes you may be told access "doesn't change" when in fact your legal rights of access do change.  Get to the bottom of the issue.

Attorney Fees: You may be told that if you do not agree with the government and enter into a settlement, you will spend a fortune on costs and attorney fees.  What you will not be told is that if you are able to show the government's offer is too low and is therefore not just compensation, you may be able to get your costs and attorney fees paid by the government.  Also, many lawyers offer free consultations and are will to work on contingency.  Talking to a lawyer does not mean that you cannot settle on a fair price, it means you will have help negotiating that price.  Fear of litigation, courts and lawyers causes many property owners to needlessly accept amounts they do not believe are fair.  Do not allow yourself to be intimidated by threats of going to court; going to court allows a judge or jury to decide the amount owed and oversee the government's actions.  In a condemnation case, you have done nothing wrong - you merely own property the government wants.  The legal system can help even the playing field and ensure that the government does not take advantage of you because you do not know all the rules involved in the process.  Be aware that if you hire your own appraiser before being sued by the government, you will likely be responsible for paying those costs out of pocket.  If you wait until after suit is filed, then obtain an appraisal and either settle or prevail at trial, the government may be required to reimburse you for the cost of the appraisal. 

The Lone Holdout: Many owners are told that everyone else has agreed and that they are the only holdout.  Meet with other affected owners and see if they have been told the same thing.  Compare information.  Also be aware that if you do not agree on price, you will not be holding up the project; the government has the ability to take the property and build the project and determine just compensation later.  Don't be pressured or rushed.  You will not have a second opportunity for compensation.  You should be given at least thirty (30) days to make a decision, and you should be provided with an Advice of Rights Form which advises you that you do have the right to certain damages, the right to see the appraisal, the right to consult with others, etc.
The Federal Government: Many projects are funded primarily by the federal government.  Do not believe the claim we can't offer more, it is not up to us.  The government is constitutionally obligated to pay just compensation and if the appraisal they have ordered does not represent just compensation, there are procedures the government can follow to obtain additional funds even if those funds are federal funds.  You are not required to donate your property; you are entitled to payment, and the government sets aside funding for property acquisition.  It is up to them.

Signing It Away: Do not agree to any specific interest rate, legal description, or relinquishment of your property rights unless you know for certain it is correct.  The government representatives may be nice, but they aren't representing you when they acquire your property, and you must evaluate what you are told and seek out your own information.  If you rely on them and they are wrong or less than truthful, you may be stuck with whatever you voluntarily agreed to.  In many cases people agree to less than the rate of interest the government is legally obligated to pay, simply because they do not know their rights.

Harassment: In some cases, certainly not all, property owners have been harassed by negotiators and appraisers until they break down and give in.  This is unacceptable behavior which violates the constitutional obligation of good faith and should not be tolerated.  You can fight back or get help.  There is never an excuse for harassment.

The facts of each case are different, and nothing in this article is intended to be legal advice.  Consider this general information about private property rights if you determine it to be helpful, and if you have questions about your specific case, ask a qualified attorney.

Finally, because I am a lawyer and I represent owners in eminent domain cases, I am certain some will say or believe the purpose of this article is to generate business.  In truth, the purpose is education.  If you know your rights, you have the choice of whether to exercise them or not

Heather A. Cunningham is a lawyer with Davison, Copple, Copple & Copple in Boise.  Her practice focuses primarily on eminent domain/condemnation, land use regulation and private property rights issues.