1 Welcome to the International Right of Way Association’s Course 803 Eminent Domain Law Basics for Right of Way Professionals 803-PT – Revision 3 – USA

2 Introductions Who we are… What we do… Where we do it… How long we’ve been doing it… Our goals for the course...

3 Objectives (1) At the end of the two days, you will 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

4 Objectives (2) At the conclusion of the two days, you will be able to... Demonstrate the meaning of just compensation and the legal aspects of valuation Name some of the role players and describe their roles in the eminent domain process

5 Housekeeping

6 Schedule Day One (1) 8:00 - 8:30 Introductions, Etc. 8:30 - 9:30 Background 9: :15 Primary Sources of Eminent Domain Law 10:30 - 2:15 Breakdown and Analysis of the Constitutional Right of Eminent Domain 2:30 - 4:45 Just Compensation and Legal Aspects of Valuation

7 Schedule Day 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

8 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.

9 Characteristics of Eminent Domain Power (1) Sovereign Attribute Constitution and Statute

10 No person shall be … deprived of … property, without due process of law; nor shall private property be taken for public use, without just compensation.

11 Characteristics of Eminent Domain Power (2) Sovereign Attribute Constitution and Statute Relationships to Private Property Rights

12 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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14 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.)

15 Taxation Taxation is an involuntary fee paid by individuals or businesses to a governmental unit.

16 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.

17 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)

18 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.)

19 No person shall be … deprived of … property, without due process of law; nor shall private property be taken for public use, without just compensation.

20 … nor shall any State deprive any person of life, liberty, or property, without due process of law...

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

22 The Uniform Act

23 Regulations Part Subparts Sections

24 Courts Federal 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

25 Private property… (1) Private property shall not be taken or damaged for public use without just compensation.

26 Private property… (2) Private property shall not be taken or damaged for public use without just compensation.

27 Private property… (3) Private property shall not be taken or damaged for public use without just compensation.

28 Economic Regulatory Takings Public PurposePrivate Loss Character of the government conduct Interference Legitimacy Economic impact Investment expectations Economic harm

29 Private property… (4) Private property shall not be taken or damaged for public use without just compensation.

30 Private property… (5) Private property shall not be taken or damaged for public use without just compensation.

31 Private property… (6) Private property shall not be taken or damaged for public use without just compensation.

32 Private property… (7) Private property shall not be taken or damaged for public use without just compensation.

33 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)

34 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)

35 Private property… (8) Private property shall not be taken or damaged for public use without just compensation.

36 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).

37 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)

38 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)

39 Formulas (1) Federal (Before and After) Rule State (Summation) Rule

40 Formulas (2) is the difference between the value before the acquisition and the value after the acquisition. Federal (Before and After) Rule

41 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 benefits cannot be less than zero dollars])

42 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 the increase in value to the remainder property as a result of a partial acquisition

43 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

44 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

45 Three Approaches Income Capitalization Approach The conversion of income into value through a rate or a ratio.

46 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)

47 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

48 Day Two Today, we will Finish discussing just compensation and the laws and legal aspects of valuation Name some of the role players and describe their roles in the eminent domain process Do a few more exercises and a case study Take the exam

49 Laws… Valuation Process Valuation Date Comparable Sales Data

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

51 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 can be considered and they can be considered to the extent that they offset damages to the remainder and the value of the part taken.

52 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.

53 Private property… (9) Private property shall not be taken or damaged for public use without just compensation.

54 Just Comp…and…Valuation (1) Measuring Just Compensation Two Formulas Three Approaches to Value Larger Parcel Undivided Fee Rule

55 Just Comp…and…Valuation (2) Law and the Valuation Process Value of the Part Taken Damages to the Remainder Benefits to the Remainder Property Condemnation Proceedings

56 Roles Engineers Title Investigators Attorneys Appraisers Negotiators Relocation Agents

57 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

58 Objectives (2) Right now, you should be able to... Demonstrate the meaning of just compensation and the legal aspects of valuation Name some of the role players and describe their roles in the eminent domain process

59 Thank you! 803-PT – Revision 3 – USA