What Every Lawyer Should Know about Eminent Domain
by Edward O. Lear
(County Bar Update, June/July 2006, Vol. 26, No. 6)

 

What Every Lawyer Should Know about Eminent Domain

 

By Edward O. Lear of Century Law Group. Lear represents condemnees throughout California in eminent domain and related proceedings. The opinions expressed are his own.

 

1. Preserve your client’s rights early in the condemnation process.
Condemning agencies must first file a resolution of necessity before they can officially condemn a property. The resolution will establish that the following three requirements, necessary for eminent domain use, have been met:

—Public interest and necessity require the project.

—The project is most compatible with the greatest public good and the least private injury.

—The property sought is necessary for the project.

 

Before this resolution can be adopted, the governmental agency must give notice to property owners that there will be a public hearing regarding the matter. If property owners want to object to the proposed use and be heard in front of the hearing body, they must file a written request to appear and be heard within 15 days after the notice was mailed. If it is your client’s intent to block the “take,” it is critical that your client not waive 1) the right to be heard and 2) the right to make future objections regarding the resolution.

 

2. Despite the condemning agency’s ability to “quick take” in as early as 90 days, you can negotiate time of agency possession for your client.
Code of Civil Procedure Sec. 1255.410(a) authorizes the condemning agency to a “quick take” order for possession at the time of the complaint filing or any time thereafter and before judgment. It is common for the condemnor to seek an ex parte order of possession so that it receives the property within 90 days. However, until a writ is issued, the client will not have to vacate the property. Oftentimes, the condemnor does not seek a writ on the 90th day. In reality, the condemning agency often is not prepared to begin the demolition as originally scheduled.

 

3. Make sure the condemning agency has paid relocation expenses before the client moves. Consequently, in situations where your client has a successful ongoing business, try to negotiate for a rent back provision, which is often mutually beneficial.
The client is entitled to relocation benefits according to the law. These benefits include a statutory benefit for reestablishment (usually capped at $10,000); search (usually capped at $1,000); and costs for relocation.

 

For example, a recent bid for relocating a food services company included the following: all necessary inspections and sign-offs; engineering in-house; phone and computer cables (tech fees included); security system; all required demolition and cleanup; construction materials and handling; installation or modification of customer’s cabinets and shelving; storage systems for food; all required concrete, cutting, trenching, and backfilling; permit and fees.

 

4. Marshall evidence of your client’s property/business use before it’s too late.
Goodwill is the quantitative value that cannot be measured by physical assets and inventory. Goodwill is often difficult to quantify as each side will invariably calculate estimates that favor its cause. Goodwill is mainly associated with location; for example, a restaurant’s value may be due to the fact that it has been located in the same spot for 30 years. When such an establishment moves, it will lose its regular customers. However, just because a client is relocated or put into storage does not mean it automatically has a loss of goodwill. Ensure that there is evidence like photographs that show jurors how the building was once used.

 

5. Attorney fees and costs are available to clients when the condemning authority changes its mind midstream about condemning a property or business.
If a Resolution of Necessity is in place establishing the agency’s “need” for the property/business and the condemnation is halted, you can recover for all costs/fees expended to date. These costs include filing costs and expert fees. Your client should not be out-of-pocket for even one dime if the agency halts its project.

# # #