Waldo & Lyle Property Owner’s Guide to the Condemnation Process and Just Compensation in the Commonwealth of Virginia

If the government or a utility company is threatening to take your property by eminent domain, our guide should answer many of your basic questions about your rights, about the condemnation process and about how to best prepare yourself.

Eminent domain law is quite complex and it changes nearly every year. This is why we recommend consulting with an eminent domain attorney to give you advice for the specific facts of your case. Please utilize this guide as a general overview and not a precise opinion on any particular issue in your case.

This guide should not serve as a substitute for consultation with an experienced eminent domain attorney. Whenever you have a specific question about the condemnation process or the particulars of your case, always discuss it with a qualified eminent domain attorney.

Condemnation or eminent domain is the  power to take private property for public use.  The exercise of the power of eminent domain is sometimes called a “taking” of private property.

  1. Federal, state and local governments generally have the power to condemn private property and many government agencies have been delegated this power. For example, the Virginia Department of Transportation may have the power to condemn your property for a road or highway project; similarly, your local school board may have the power of eminent domain to acquire property for a new school.
  2. The government has also delegated the power of eminent domain to public utilities and in certain, very limited situations to private companies and individuals.  An entity with the power of eminent domain is often referred to as a “condemnor” or a “condemning authority.”

No. An entity which has the power of condemnation may only take your property for a public use, not a private use.  Article I, Section 11 of the Constitution of Virginia states that “a taking or damaging of private property is not for public use if the primary use is for private gain, private benefit, private enterprise, increasing jobs, increasing tax revenue, or economic development, except for the elimination of a public nuisance existing on the property.”

Only a judge can decide. Even if the condemning authority believes the condemnation is for a public use, a judge can rule otherwise and deny the condemning authority the power to take your property.  Virginia’s Constitution provides that “[t]he condemnor bears the burden of proving that the use is public, without a presumption that it is.”  This means that the entity seeking to take your property will have to prove to the Court that it is truly taking private property for a public use.

You may learn of a project affecting your property through local news reports or notice from the government or utility company planning the project. 

In many cases, the condemning authority will hold a public hearing on the project. You will be able to review maps of the project, ask questions of the condemning authority’s representatives and determine whether your property is in the path of the project.

It must explain the offer to you and give you plans and other documents which indicate how much of your property the condemning authority wants to take.

It depends. While a government entity or public utility may have the power of eminent domain, that does not necessarily mean that it has the power to take your property. The power of eminent domain can only be exercised for a public use.

If you believe your property is not being taken for a public use, only a court can stop the condemnation of your property. For example, if the Virginia Department of Transportation claims that it needs a portion of your property to construct a road, it may not take your property unless you give your consent, or the court enters an order allowing the taking.

If you do not consent to the condemnation, the condemning authority must prove to the court that your property is necessary for a public use. The burden on the landowner challenging a condemnation is very high. While condemning authorities have most often prevailed in litigation to take property, some owners have stopped illegal takings of their property. For example, in 2013, the Supreme Court of Virginia ruled that the Norfolk Redevelopment and Housing Authority did not have the power to take the property of one of our clients. It was ordered to return the property owner’s apartment building.

A condemnor cannot take your property until it makes a bona fide offer for the property and, after that, files with the court a pleading for taking the property and serves the pleading on the owner.  It must explain the offer to you and give you plans and other documents which indicate how much of your property the condemning authority wants to take. 

In Virginia, if the condemning authority believes the value of the property taken is $25,000 or more, it must obtain a written appraisal report and give you a copy of it and any other appraisals it has done.  If the condemning authority believes that compensation is between $10,000 and $25,000, you have the right to request that the condemning authority obtain a written appraisal report and provide it to the landowner.

In all cases, the condemning authority must, before making any offer to the landowner, make a determination as to what it believes to be just compensation.  The condemning authority must also provide the owner with a written statement containing the condemning authority’s determination of just compensation.  You must also be provided with a copy of the project plans that affect your property.

When the condemnor takes part of your property, you are entitled to just compensation for the property rights taken and any decrease in the value of the property you still own after the taking.

“Quick-take” allows the condemnor to record a document called a Certificate of Take (or Certificate of Deposit) with the court in the jurisdiction where your property is located and deposit with the court the amount of just compensation it believes it owes you.  With those two simple acts, the condemnor immediately gains possession of and title to the portions of your property it claims it needs for its project and can begin construction of the project before there is a trial or agreement as to the full amount of just compensation owed.  As of July 1, 2017, you must be notified in writing between 30 and 45 days in advance of when the Certificate of Take will be recorded and must be sent a copy of the recorded Certificate within 4 business days of it being recorded.

Yes.  If your property is likely to be affected by the exercise of the power of eminent domain, the time to act is now, not after the process has begun.

Once the taking actually occurs it may be too late to make critical decisions that could have an impact on your right to just compensation and your ability to protect your property rights. Documents establishing the legal status of ownership and any leasehold interests, for example, should be reviewed and clarified in advance, if necessary. Under your eminent domain attorney’s guidance, input from an appraiser or other consultants may be obtained before the condemnation ever occurs. Your response to preliminary overtures from representatives of the condemning authority can affect the final outcome.

In general, an owner should seek the advice of an eminent domain attorney for pre-condemnation planning to ensure his or her rights are protected to the fullest extent of the law. You should avoid taking positions, especially written positions, which may be used against your interests in the condemnation proceeding. If you contest the real estate tax assessment for your property, for example, stating that the property is worth less than the locality’s assessment, that appeal may be used against you if, in the condemnation case, you assert a higher value.

You should avoid contracts of sale or sale offers that might attach a value to the property before a condemnation proceeding. You should avoid having an appraiser value your property before consulting with an eminent domain lawyer.

You may also attend a public hearing about an upcoming project. These hearings are a good source of information for property owners. They can provide helpful information about the scope and timing of public projects.  However, you should keep in mind that any statement you make at a public hearing may be used against you later in court.

Leases and other agreements signed by a property owner prior to condemnation may reduce the portion of the final award to which the property owner will be ultimately entitled. Your eminent domain attorney should be consulted on all lease provisions and especially on all condemnation (or similar) clauses contained within these documents. Further, you should never disclose leases, contracts, offers, and bids to the condemning authority without first seeking the advice of your eminent domain attorney.

You should maintain the appearance and condition of their property. Visual impressions, even to sophisticated professionals, are important, and the condemning authority’s appraisers will be inspecting the property before it is condemned. Always keep the property looking as good as possible and never defer maintenance. Landscaping and curb appeal are important. Improvements made to the property will affect its fair market value, upon which just compensation is based. However, it is important to not make improvements to a property solely for the purpose of increasing its value before the taking in order to claim a higher amount of just compensation.

Favorable land use approvals may also enhance the value of property. Where it is practical and prudent, with advice of your eminent domain attorney, the securing of a rezoning, plat approval, or building permit may result in a higher valuation of the property. An owner should not interrupt development plans solely because of a pending condemnation. The decision of whether to apply for land use permits must always be weighed against the effect that a potential denial will have on the case. It is thus wise to seek the advice of an eminent domain attorney before proceeding with a land use application.

  1. Maintain the property, including all building structures and landscaping, in the same manner as if you were attempting to sell the property on the open market and showing the property to potential buyers. If you paint the property or make any other alterations, use colors that are conservative and modest.
  2. Maintain a single notebook with a running log of all conversations with the condemning authority or its agents. Write the name of any persons you speak to, the date and the time of the conversation, and the content of the conversation.
  3. Save all correspondence and documents the condemning authority provides to you in one folder. Keep all information that you receive in this folder.
  4. DO NOT sign anything. Condemning authorities often try to take more rights in a settlement than they have the right to take by law. For example, a condemning authority such as a gas company may have obtained regulatory approval to construct one pipeline on your property, but it may attempt to reach a settlement giving it the right to construct multiple pipelines.
  5. Regardless of whether your tax assessment increases dramatically, DO NOT contest the tax assessment. The assessed value of your property does NOT represent the fair market value of the property. The eminent domain appraisal done for purposes of just compensation is not the same as the appraisal done for tax assessment purposes. Consequently, the tax assessment is inadmissible at trial against the landowner unless the landowner has contested the tax assessment.
  6. Consult an eminent domain attorney regarding the filing of any subdivision plats or other documents that may be filed on record.
  7. DO NOT change or alter any nonconforming uses, such as signs, which have been grandfathered under the zoning laws.
  8. Consult an eminent domain attorney about title to the property being taken and title to any adjacent properties that may be used in connection with the property being taken.
  9. Consult an eminent domain attorney regarding any leases that are on the property. Condemnation provisions in the leases may have significant effect on condemnation proceedings.

It depends on what type of property you own and how much is being taken.  The Virginia Constitution entitles you to be paid for the property taken and the damage done to the property you continue to own.

Appraisers generally use three methods of appraisal to estimate the value of real estate: the market approach, the cost approach and the income approach.

When only part of a property is taken, appraisers not only determine the value of the property taken but also whether the remaining property is as valuable as it was before the condemnation.  If the property is not as valuable, you are entitled to be compensated for that loss in value.

It is important that you consult with your eminent domain lawyer before you retain an appraiser so that you ensure your appraiser understands the law of eminent domain and can prepare his or her report properly for use in Court.  Because of the complication involved in properly appraising for eminent domain, even seasoned appraisers, who lack eminent domain experience, can prepare their reports improperly for use in an eminent domain trial. 

In Virginia, state law allows the landowner to elect a jury or commissioners to determine the amount of compensation to be paid to the owner who loses his or her property through condemnation. Whether you choose a randomly selected jury or a panel of appointed commissioners is a tactical decision that you should make in consultation with your eminent domain attorney.

If you choose a jury, the circuit court will summon a panel of potential jurors from a random list of citizens who own property in the jurisdiction in which the property being taken is located. From this list, five will be chosen.

The jury determines the amount of the just compensation award, which may include damages. Unlike other civil juries, condemnation juries can reach their verdict with a simple majority, meaning, any three of the jurors can determine the amount of just compensation you will receive.

Commissioners are selected by the Court from lists submitted by both parties before the trial.  Commissioners are people in the jurisdiction where the Court is pending.  They may be selected to serve even if they know either or both of the parties to the case. Like jurors, the commissioners must own property in the jurisdiction where the property being taken is located.  However, rather than being chosen randomly, both the landowner and the condemnor submit to the Court a list of proposed commissioners they would like to hear the case.  Ultimately each side will get two commissioners from their list and the Court will determine from whose list the fifth commissioner will be chosen. Similar to condemnation juries, commissioners may determine just compensation by simple majority; their verdict is not required to be unanimous.

It depends. A condemnation is considered an involuntary conversion and is treated differently from other sales and other cases.

You will likely have a period of time to reinvest the proceeds of the case and defer your tax obligation until a later date.

If a portion of your award is considered severance damages (compensation for damages to property you continue to own), you may be able to defer the payment of taxes on that portion of our award until you sell the property.

Portions of the award attributable to interest are taxed as ordinary income.

The tax-deferral benefits of condemnation are also available to sales in lieu of condemnation. You may thus defer the payment of taxes on a sale to the condemning authority even if you settle the dispute without the government being required to file a condemnation action.  You should consult with an accountant or tax lawyer to determine the answer for your circumstance.

Not seeing a question that you have, feel free to contact us at : admin@waldoandlyle.com