What is eminent domain?

The constitutional basis

The Fifth Amendment's Takings Clause says private property shall not “be taken for public use, without just compensation.” It applies to the federal government and, through the Fourteenth Amendment, to states and cities. State constitutions contain similar clauses. The power can also be delegated to utilities, pipeline companies, railroads and redevelopment agencies.

What counts as “public use”

Traditional public uses include highways, bridges, schools, parks, government buildings, water and sewer lines, power lines and airports. In Kelo v. City of New London (2005), the Supreme Court held that taking private homes for a private economic development project could qualify as public use because it served a public purpose. The decision was widely criticized, and more than 40 states then passed laws or constitutional amendments limiting takings for economic development or requiring stricter findings of blight.

Types of takings

• Full taking — the government acquires the entire property.
• Partial taking — only part of a parcel, such as a strip for road widening. The owner is paid for the part taken plus any loss in value of the remaining land (severance damages).
• Easement taking — a permanent or temporary right to use part of the property, for example for utility lines or construction access.
• Inverse condemnation — when government action effectively takes or damages property without a formal proceeding, such as repeated flooding caused by a public project or regulations that eliminate all economic use; the owner sues for compensation.

How the process usually works

1. Planning and notice — the agency identifies the property and notifies the owner.
2. Appraisal — the agency obtains an appraisal of fair market value.
3. Offer and negotiation — a written offer is made; most takings are resolved by a negotiated sale.
4. Condemnation lawsuit — if no agreement is reached, the agency files a case in court. In many states it can take possession early by depositing its estimate of compensation with the court.
5. Valuation trial — a judge or jury decides just compensation, usually based on competing appraisals.

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What “just compensation” means

Generally the property's fair market value — what a willing buyer would pay a willing seller — at its highest and best use, not just its current use. Partial takings add severance damages. Some states add amounts for lost business goodwill or require payment of the owner's appraisal and attorney fees in certain cases. The federal Uniform Relocation Assistance Act requires moving expenses and relocation benefits for residents and businesses displaced by federally funded projects, and many states have similar rules.

Challenging a taking

Owners can argue that the taking is not for a public use, that the agency did not follow required procedures, or that more property is being taken than necessary. These challenges rarely stop projects entirely. The more common and more successful fight is over compensation: initial offers are often below what owners ultimately receive after independent appraisals and negotiation.

Regulatory takings

Regulations can also amount to a taking. The Supreme Court has held that a regulation depriving land of all economically beneficial use requires compensation (Lucas v. South Carolina Coastal Council, 1992), and that a government-authorized physical invasion, even temporary, is a taking (Cedar Point Nursery v. Hassid, 2021). Most zoning and land-use rules, however, are not takings.

Tips for property owners

• Do not sign anything or accept the first offer before understanding your rights.
• Ask for the agency's appraisal and consider hiring your own appraiser.
• Document the property's condition, improvements, income and potential uses.
• Keep track of deadlines for responding and objecting.
• Consult an eminent domain lawyer early; many work on a contingency fee based on the increase over the government's offer.

Tenants and businesses

Tenants may be entitled to relocation benefits and, depending on the lease and state law, a share of compensation for the lease's value. Businesses may recover moving costs and, in some states, lost goodwill.