803-pt – revision 3 – 09.05.06.usa

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Welcome to the

International Right of Way Association’s

Course 803Eminent Domain Law Basics

for Right of Way Professionals

803-PT – Revision 3 – 09.05.06.USA

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Introductions

Who we are…What we do…

Where we do it…

How long we’ve been doing it…

Our goals for the course...

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Objectives (1) At the end of the two days,

you will be able to...

• Discuss the characteristics ofeminent domain

• Express an understanding of the sources of eminent domain law

• Analyze the components of justcompensation and the legal aspectsof valuation

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Objectives (2) At the conclusion of the two days,

you will be able to...

• Demonstrate the meaning of just compensation and the legal aspectsof valuation

• Name some of the role players and describe their roles in the eminent domain process

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Housekeeping

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ScheduleDay One (1)

8:00 - 8:30 Introductions, Etc.

8:30 - 9:30 Background9:30 - 10:15 Primary Sources of

Eminent Domain Law10:30 - 2:15 Breakdown and Analysis

of the Constitutional Right of Eminent Domain

2:30 - 4:45 Just Compensation andLegal Aspects of Valuation

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ScheduleDay Two (2)

8:00 - 8:30 Recap

8:30 - 2:45 Just Compensation and Legal Aspects of Valuation

3:00 - 3:30 Roles of Right of Way Professionals

3:30 - 4:00 Course Review

4:00 - 5:00 Exam

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Eminent Domain

Eminent domain is the power of the

sovereign to take private property for

public use without the owner's consent.

Generally, the "sovereign" is the

government (federal and state),

although some quasi-public and other

agencies have eminent domain powers.

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Characteristics of Eminent Domain Power (1)

Sovereign Attribute

Constitution and Statute

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No person shall be … deprived of … property, without due process of law; nor shall private property be taken for public

use, without just compensation.

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Characteristics ofEminent Domain Power (2)

Sovereign AttributeConstitution and Statute

Relationships to Private Property Rights

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1 Kings 21“ … Naboth the Jezreelite had a vineyard, hard

by the palace of Ahab king of Samaria. And

Ahab spake unto Naboth, saying, Give me thy

vineyard, that I may have it for a garden of

herbs, because it is near unto my house: and I

will give thee for it a better vineyard than it;

or, if it seem good to thee, I will give thee the

worth of it in money.”

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Police Power

Police power is the right of

government to restrict the use

of private property in order to

promote or protect public interests

(e.g., public health, safety, and welfare.)

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Taxation

Taxation is an involuntary fee

paid by individuals or businesses

to a governmental unit.

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Whatdayathink? (1)

To construct the NASCAR-owned Kansas

International Speedway, Wyandotte County

condemned property belonging to 150

families within the 1,200-acre tract. Owners

of 30 of the parcels challenged the takings in

court. The Kansas Supreme Court upheld

the condemnations, ruling that the racetrack

is a valid public purpose.

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Whatdayathink? (2)

In 2002, the Honolulu City Council approved a

resolution allowing it to condemn five beach

front properties needed for a 7.9 acre hotel

expansion, which was part of a $300-million

Waikiki Beach Walk redevelopment project.

The City claimed the project would attract more

visitors and spur other development.

(Go on to next slide)

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Whatdayathink? (3)

The City Council Chairman said that filing

the condemnation actions would "encourage

the parties to negotiate." The owners said that

it was neither "necessary or appropriate” for

the City to condemn the properties and then

sell to the hotel chain. (The owners settled.)

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No person shall be … deprived of … property, without due process of law; nor shall private property be taken for public

use, without just compensation.

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… nor shall any State deprive any person of life, liberty, or property, without due

process of law...

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Private property shall not be taken for public use without just compensation.

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The Uniform Act

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Regulations

Part

Subparts

Sections

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CourtsFederal State

Supreme Court

Court of Appeals(12 Regional Circuits)

District Courts(94 Judicial Districts)

Supreme Court (of Virginia)

Court of Appeals

Circuit Courts

(31 Circuits)

Magistrates

General District Courts

Juvenile and Domestic

Relations District Courts

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Private property… (1)

Private property shall not be taken or damaged for public use

without just compensation.

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Private property shall not be

taken or damaged for public use without just compensation.

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EconomicRegulatory Takings

Public Purpose Private Loss

Character of the government conduct

Interference

Legitimacy

Economic impact

Investment expectations

Economic harm

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taken or damaged for public use


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taken or damaged for public use


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Just Compensation (1)

Just compensation means the full and perfect equivalent in money of

the property taken. The owner is to be put in as good a position pecuniarily

as he would have occupied if his property had not been taken.

United States v. Miller, 317 U.S. 369 (1943)

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Just Compensation (2)

Just compensation means a compensation that would be just in regard to the public, as well as in

regard to the individual…

Bauman v. Ross, 167 U.S. 548 (1897)

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Market Value

Market value is a type of value, stated as an opinion, that presumes

the transfer of a property … as of a certain date, under specific conditions

… (relationship, knowledge, and motivation; terms of sale;

conditions of sale).

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Monongahela (1)

The noun “compensation” standing by itself, carries the idea of an equivalent. So that, if the adjective “just” had been omitted, and the provision was simply

that property should not be taken without compensation, the natural import

of the language would be that the compensation should be the equivalent

(go to next slide)

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Monongahela (2)

for the property taken; and this just compensation, it will be noticed, is for the property, and not to the owner.

Every other clause in this fifth amendment is personal.

Monongahela Navigation Co. v. U.S., 148 U.S. 312 (1893)

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Formulas (1)

Federal (Before and After) Rule

State (Summation) Rule

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Formulas (2)

is the difference between the value before the acquisition and the value after the acquisition.

Federal (Before and After) Rule

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Formulas (3)

State (Summation) Rule

is the value of the part taken plus(damages to the remainder property minus

benefits to the remainder property [the damages minus the benefitscannot be less than zero dollars])

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Definitions Value of the part taken is determined by multiplying the quantity taken times the before unit value of the item

Damages to the remainder property represent the loss in value to the remainder property as a result of a partial acquisition

Benefits to the remainder property represent theincrease in value to the remainder propertyas a result of a partial acquisition

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Three Approaches

Sales Comparison Approach• Research the market for comparable data

• Develop relevant units of comparison

• Compare the sales to the subject and adjust for dissimilarities

• Reconcile the value indications into a final value opinion

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Three Approaches

Cost Approach• Develop a value opinion for the land

• Estimate the cost new of the improvement

• Deduct depreciation

• Add land value opinion to the depreciated improvement value

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Three Approaches

Income Capitalization Approach

The conversion of income into value througha rate or a ratio.

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Today, we:

• Discussed the characteristics of eminent domain

• Examined the sources of eminent domain law

• Analyzed the term ”Private property shall not be taken or damaged for public use without just compensation”

Recap Day One (1)

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Recap Day One (2)

• Looked at just compensation and the laws and legal aspects of valuation (through the three approaches to value)

• At various times throughout the day, we did some exercises and a case study

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Day TwoToday, we will

• Finish discussing just compensation and the laws and legal aspects of valuation


• Do a few more exercises and a case study

• Take the exam

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Laws… Valuation Process

Valuation DateComparable Sales Data

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Market Perceptions

“Property owners…are due compensation, even if the ‘cancerphobia’ driving down the worth of their land is unjustified or irrational…”

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Benefits (1)

Rule No. 1: Only special benefits can be considered and they can only be considered

to the extent that they offset damages to the remainder.

Rule No. 2: Only special benefits canbe considered and they can be considered

to the extent that they offset damages to the remainder and the value of the part taken.

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Benefits (2)

Rule No. 3: Both special and general benefits can be offset against damages to the remainder,

but not against the value of the part taken.

Rule No. 4: Benefits cannot be considered at all.

Rule No. 5: Both special and general benefits can, on occasion, offset both damages to the remainder and the value of the part taken.

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Just Comp…and…Valuation (1)

Measuring Just CompensationTwo Formulas

Three Approaches to ValueLarger Parcel

Undivided Fee Rule

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Just Comp…and…Valuation (2)

Law and the Valuation ProcessValue of the Part Taken

Damages to the Remainder Benefits to the Remainder Property

Condemnation Proceedings

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Roles

EngineersTitle Investigators

AttorneysAppraisersNegotiators

Relocation Agents

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Objectives (1) Right now, you should be able to...

• Discuss the characteristics of eminent domain

• Express an understanding of the sources of eminent domain law

• Analyze the components of just compensation and the legal aspects of valuation

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Objectives (2) Right now, you should be able to...

• Demonstrate the meaning of just compensation and the legal aspects of valuation


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Thank you!

803-PT – Revision 3 – 09.05.06.USA

803-pt – revision 3 – 09.05.06.usa

Documents

eminent domain powers

sources of eminent domain

eminent domain law basics

public use

use of private property

roles of right

right of government

public health