Condemnation

What Is Condemnation?

Condemnation is when a government orders that a piece of property be vacated and kept vacant, due to some public purpose or concern. Condemnation can be temporary or permanent and may be done for a number of reasons. The two most common are due to the unsafe condition of the property or to carry out a government taking of the property under the legal doctrine of eminent domain.

Understanding Condemnation

When a government entity condemns a property it issues a legal order that the occupants must leave. This may apply to all or part of the property and may be a complete condemnation or only apply certain restrictions on use and occupancy.

It may be a permanent seizure of the property where the government takes ownership or transfers ownership to a third party, followed by demolition and reconstruction. Alternatively, it may be a temporary condition that is rescinded later once the conditions that led the government to condemn the property are corrected.

Types of Condemnation

The two most common situations where a government might condemn a property are when the condition of the property makes it unsafe for use or occupancy or when the government intends to take the property to convert it to some legitimate public use in a process known as eminent domain.

Dilapidated or Unsafe Buildings

Buildings that are dilapidated or unsafe are often subject to condemnation for the purpose of preventing harm to the occupants, but may be restored to occupancy if repairs are made. Local, state, and federal housing codes and safety standards may apply to any given building, and if the condition of the building violates these then the property may be subject to condemnation.

This can occur due to deterioration of a property over time, or in the wake of a specific event that damages the property such as a fire, earthquake, or chemical spill. If renovations are made or the damages are repaired, the condemnation order may be lifted. However, in some cases, renovations themselves lead to condemnation if they trigger required inspections that discover other unsafe conditions or violations of the current codes and standards, which may not have been in effect at the time of the original construction.

Eminent Domain

The second type of condemnation occurs under the legal doctrine of eminent domain. In the U.S., states and the federal government have the right of eminent domain, which allows them to condemn property and transfer the title from private to public ownership or to a private third party. The condemning authority must provide "just compensation" and the condemnation must be carried out for some public purpose.  

In some cases, just compensation may also be required for property that is legally taken by the government — for example, by prohibiting any economic use of the property — but not actually condemned.

Property can be seized for economic development, not just public use. 

Eminent Domain Process

If the property owner believes the amount offered inadequately reflects the value, they can pursue the matter in court. Condemned property owners can challenge the legality of the seizure itself and sue for the right to keep the property based on failure to prove the seizure was in the public interest. They can also just sue for more compensation if the offered compensation is not just.

Before property seizure, government authorities must first appraise the property. They may then pay a pro tanto award, which the owner can accept without losing the right to sue, or the parties can come to a full settlement. Pro tanto payments are often small compared to the amount the courts ultimately award owners of the condemned property.

The condemning entity is required to provide timely notification throughout the condemnation process and a copy of the required appraisal. The amount offered can be contested in court or before a special commissioner. The property owner can challenge the commissioner's ruling. However, the condemnor can issue payment based on the commissioner's decision. As the appeal proceeds in the court, the condemnor will have the right to access the property and move forward with their project. 

The year of the first eminent domain case — Kohl v. United States — heard by the Supreme Court.

Special Considerations 

The most straightforward examples of condemnation involve land and buildings, which governments might seize to make way for a public project, such as a highway; or private projects that are believed to serve the public good, such as a hotel expected to attract business and generate tax revenue. Not all condemned property is real estate, however. Funds have been subject to eminent domain, and some legal scholars argue that governments could even seize intellectual property through condemnation.

For powerline and pipeline projects, the landowner retains ownership. The government is gaining an easement, which grants them nonpossessory rights to install and maintain the pipelines or powerlines on your property. An agreement is executed via a deed with the original property owner.