By Nicole Cook
Our increasing need for energy, transit, and other infrastructure has more and more farmers who own or lease land wondering about the power of the government, or of entities like natural gas companies granted authority by the government, to take private property for public use. The time for you to understand whether, when and why the government has a right to take your property, what rights you have, and what you can do in the event that the government decides that it is going to take your property, is before it happens.
What right does the government have to take your property?
The Takings Clause of the Fifth Amendment of the U.S. Constitution grants the federal government limited authority to take private property for “public use” upon providing the property owner “just compensation.” The Due Process Clause of the Fourteenth Amendment grants the same limited authority to state and local governments. The power of the government to take private property rights for public use is called “eminent domain.” A variety of property rights are subject to eminent domain, including air, water and land rights.
Per Article III, Section 40, of the Maryland Constitution, “[t]he General Assembly shall enact no law authorizing private property to be taken for public use, without just compensation, as agreed upon between the parties, or awarded by a Jury, being first paid or tendered to the party entitled to such compensation.”
What rights do you have?
The legal process established to allow the government to assume property rights is called “condemnation.” The condemnation process can only be stopped if the government’s proposed taking of the property fails to meet the requirement that the taking will be for a public purpose or a public necessity. Typical “uses” that satisfy the public purpose include roads, parks, schools, other public buildings, or any other endeavor where the purpose of the project serves a public good or need.
Most cases meet this public use test, and the government can’t be stopped from taking your property. Federal and state laws make it clear, however, that if the government takes your property, you are entitled to a fair payment and the government may not possess the property unless “just compensation” is made.
What actions can you take?
The condemnation process starts with the government agency identifying a public need, deciding to acquire your property for that public purpose, and most often, holding public hearings on the project. You may or may not, however, be given notice of the hearings. You might only learn that the government wants to take your property for a public use when you receive an offer to purchase your property for a certain amount. That is the amount that the government has determined is “just compensation.”
When you receive the offer, you have the following options:
If you agree with the offer, which may include relocation costs in some cases, you can agree to deed the property to the agency and you will receive the amount that was offered.
While you generally won’t be able to successfully challenge the taking of the property, you can consult with an attorney who will evaluate the likelihood of a challenge to the public use. In Maryland, attorney’s fees may be recoverable if it’s determined that the state doesn’t have the right to condemn the property (Md. Code Ann., Real Prop. § 12-106).
Regardless of whether you object to the taking outright, you can object to the government’s valuation of the property and the amount offered.
Under Maryland law, “[t]he fair market value of property in a condemnation proceeding is the price as of the valuation date for the highest and best use of the property.” The highest and best use of the property might not be what you are currently using the property for, and it may not be what the government used in its valuation. An attorney can help you determine the potential value for the highest and best use of your property, and can represent you in negotiating with the government. They can also advise you on the tax implications of any gains you may make on the sale of the property. See a list of attorneys licensed in Maryland along with their respective practice areas.
Maryland requires the condemner in most cases to engage in good faith attempts to acquire the property through negotiation. If you and the condemner can’t agree on a fair price, however, the government will file an eminent domain lawsuit in the circuit court where your property is located. You are entitled to a jury trial, which can last several days and usually involves expert witnesses on both sides testifying about the value of the property. If you ultimately have to go to court, you’ll need to convince the jury that your number is the correct one.
Once the jury makes a decision, the government can either pay the amount of the award and take title to the property or, if it determines that the jury award is too high, it can drop the matter. If the government abandons its plans, it must pay your reasonable court costs and attorney’s fees. (Md. Code Ann., Real Prop. § 12-109(e)).
If you farm on leased land and learn that the land is to be condemned, you may want to consult with an attorney to determine whether you’re entitled to compensation for those property rights granted to you through the terms of the lease agreement.