Condemnation in real estate is when a government or organization with eminent domain rights—the legal right to claim property for the government—seeks to take possession of your property. This can be for instances in which your property is deemed unsafe or unusable or the government seeks to possess the property for public use.
When you finally find a home, you don’t expect that the government will swoop in and claim possession of it. You bought the property, so it’s yours, right? Well, not always. The government or another entity can claim your property through either condemnation or eminent domain. Though the result is the same, the legal processes for condemnation and eminent domain are slightly different.
Home and property owners need to be aware of condemnation practices and eminent domain and how these may affect them. That’s why Jerry
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What is condemnation in real estate?
Condemnation of real estate is the legal seizure of a property by the local, state, or federal government or a government-approved private entity for a public good. The exact public good is will vary, but typically, these tend to be projects like a highway, an airport, or even condos that can be seen as economic development.
While not always the case, real estate can be condemned by the government or an approved private entity if the property is deemed unsafe or unusable in its current state. This is often the image people conjure up when thinking of a condemned house or building—boarded-up windows, vandalism, and general lack of care.
What is eminent domain and how is it different from condemnation?
Eminent domain and condemnation are often linked together, but there is a nuanced difference between the two.
Eminent domain is simply the legal right to claim property in the name of the government. For this right to be enacted, a judge must determine that the seizure and subsequent use of the land are for the public good. The seizing authority also must show that the owner will be justly compensated and offered the due process of law if they refute the claim.
Once the right to eminent domain has been approved, the process of condemnation can begin.
What is the condemnation process?
Before the government officially marks a property as condemned, the owner may receive an offer to sell the property directly to the government or private entity. If the owner refuses, the process moves to the courts.
Then, the seizing authority has to make a case that the property they want to claim is indeed necessary to their public good plans (like building a highway or utility line) and that they will provide the owner with just compensation.
If the seizing authority wins the case, the process can move forward and the property owner will receive a notice of condemnation. At this point, the owner can either accept the claim and schedule an appraisal of their home to negotiate fair compensation or they can refute the claim and take the case to court.
Keep in mind that refuted cases rarely win and can take years in the court system, but you could negotiate a better compensation package. Whether you get your compensation payment before or after the seizure will depend on the state in which your property is condemned. You may also get a partial payment before and a partial payment after.
Key Takeaway To officially take possession of a property, the seizing authority must get legal approval to condemn the home.
Steps to take if you receive a notice of condemnation
If you receive a notice of condemnation, you first should contact an attorney who is experienced in eminent domain and condemnation cases. They can help you navigate the process and negotiate fair compensation or help you go through the legal battle of fighting the condemnation order.
It’s also a good idea to schedule a private appraisal of your property. The government will schedule an appraisal, but you’ll have more leverage if you have your property valued on your own terms by a private appraiser.
MORE: How to make a counteroffer after a home inspection
What is inverse condemnation?
If you believe your property is negatively impacted or damaged by government action, you can pursue an inverse condemnation process against the government authority. This could include polluted air, water, land, or even sound pollution from a public project.
Or, the project may have also cut your property off from road access, which would cause the property value to decline—and you’d be entitled to compensation.
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