THE CALIFORNIA EMINENT DOMAIN HANDBOOK
CHAPTER II: THE EMINENT DOMAIN PROCESS
Generally, when the government wants to take your property by eminent domain, you can expect the government to take some or all of the following steps in about the following order:
- Initial contact by government agency to express interest in the property and/or scheduling date for appraisal or environmental assessment of the property;
- Notice of intent to appraise is delivered to the owner, offering the owner the right to accompany the appraiser;
- Appraisal of the property, including improvements, is conducted by agency retained appraiser;
- Offer to purchase the property is made to the owner, together with summary of appraisal upon which offer to purchase is made;
- Notice of public hearing to adopt "resolution of necessity" to acquire property by eminent domain;
- Public hearing is held to adopt "resolution of necessity" to acquire the property by eminent domain;
- Eminent domain case is filed in court and served on property owner;
- Deposit by agency of the probable amount of just compensation is paid into court;
- Agency files motion with the court requesting early possession of the property;
- Discovery (i.e., depositions and document production) takes place in eminent domain action, and both the property owner and government hire appraisers to determine "fair market value" of the subject property;
- The property owner and government exchange their respective appraisers' reports;
- Final settlement offers and demands are exchanged (about 20 days before trial);
- If settlement cannot be reached, trial of the eminent domain action takes place before a jury whose job it is to determine "fair market value" of the subject property;
- Jury returns verdict and judgment is entered;
- Government pays judgment within 30 days following entry of judgment and title to subject property is transferred to the government by the court.
In addition, early in the process - owner/occupants and/or tenants should be contacted by a relocation agent retained by the government. The purpose of the relocation agent is to provide assistance to residents and business owners to relocate their residence or business.
When the government makes its offer to purchase property as required by Government Code section 7267.2, the agency is required to provide the owner of record with a "summary" of the basis of the offer. Usually, this means that the agency must provide the owner of record only with a brief summary of the appraisal upon which the offer is based. The summary must identify the sales upon which the appraisal is based, as well as a general description of the property being valued.
If the property to be acquired consists of owner occupied residential property of four units or less, the agency must also allow the owner of record to review the initial appraisal if it is requested by the owner. For other types of property, the agency does not have any obligation to allow the owner to review the initial appraisal and generally will not do so. Until litigation is commenced, the owner is entitled only to the summary of the basis for the offer, as discussed above.
Once litigation is underway, the parties will generally exchange appraisal reports approximately 90 days prior to trial. In some jurisdictions, the parties must timely request an exchange of appraisal reports or no exchange is required. Exchange of appraisal reports gives both the government and the owner the opportunity to evaluate the case prior to trial and attempt to reach a mutually satisfactory settlement.
A property owner is not required to accept the condemning agency's offer. Instead, the property owner may make a counter-offer, or may assert a higher value for his or her property once the eminent domain action is filed in court.
The condemning agency, in fact, must offer to pay up to $5,000 for the property owner to obtain his or her own appraisal from a licensed appraiser of the owner's choosing.
Property owners, tenants and business owners often receive higher, and in some cases, much higher compensation than the amount of the condemning agency's offer by asserting a claim for greater compensation in the eminent domain proceeding. This is, of course, not always the case and an experienced eminent domain attorney should be contacted to evaluate each case on its own merits.
Before a government agency can commence an eminent domain proceeding in court, it must adopt a formal resolution to acquire the property. The formal resolution to acquire property is known as a "resolution of necessity." The resolution of necessity must be adopted at a public hearing. The condemning agency must give the property owner of record notice of the hearing and an opportunity to speak. The property owner usually must advise the condemning agency in writing, no later than fifteen days after the notice was mailed, if the owner or his representative wishes to be heard and make the owner's position known at the hearing.
Failure to raise certain arguments at the hearing on the resolution of necessity could, in some situations, result in a waiver of the ability to raise those arguments later on. Experienced eminent domain counsel should be contacted immediately when notice of the resolution of necessity hearing is given so as to best preserve the owner's rights.
California Code of Civil Procedure section 1245.230 provides that in order to adopt a resolution of necessity, the government agency must find (1) that the project for which the property is to be acquired is necessary; (2) that the property is necessary for the public project; (3) that the project is located in such a manner as to offer the greatest public benefit with the least private detriment; and (4) that an offer to purchase the property has been made. Unless there are extraordinary circumstances (such as gross abuse of discretion, fraud or bribery), the agency's finding that it needs the property is generally considered conclusive.
Once the condemning agency deposits the amount of probable compensation, the property owner or tenant may apply to the court to withdraw that portion of the deposit which represents the owner's or tenant's probable amount of compensation. You may withdraw the amount of the agency's deposit without waiving your claim for greater compensation. However, withdrawing the deposit does waive any challenge to the government's right to take the property.
If you believe that the condemning agency's deposit of probable compensation is too low, the property owner may apply to the court for an order requiring an increase in the amount of the deposit. Only upon a very strong showing that the deposit is much too low will the court grant such a request for an increase in the deposit. Generally, the property owner's remedy will be to litigate the amount of compensation at trial or try to settle the amount of compensation before trial.
Again, asserting a claim for greater compensation in the eminent domain action often results in the owner obtaining higher compensation than that offered by the condemning agency. Experienced eminent domain counsel should be contacted to discuss your specific case. Usually, your case can be handled on a contingency based on a percentage of the amount the attorney obtains over and above the amount of the condemning agency's offer. In other words, the property owner owes the attorney no fee (other than reimbursement of out-of-pocket costs) unless the attorney obtains more than the amount of the condemning agency's offer.