Overview of Eminent Domain Litigation in Tennessee
Is the Government Trying to Take Your Land: Overview of Eminent Domain Litigation in Tennessee
Eminent domain is the right of the government to take private property for public use, following fair compensation. In addition to the government, other entities can take land by eminent domain including hospitals, counties, municipalities, housing authorities, and schools.
These entities can completely or partially take private property. Complete taking is when the entire lot is seized, and partial taking is when only a piece of the lot is taken. This is occurring more frequently in both Davidson County and Williamson County, two rapidly growing areas in Tennessee.
How does it occur?
Under eminent domain laws, private property is taken through condemnation proceedings. To begin the condemnation process, the government entity will file a Petition for Condemnation with the circuit court of the county where the land lies, giving the property 30 days notice of the proceeding. This petition will include (1) a description of the land and whether this is a partial or complete taking; (2) the name of the owner of such land or rights; (3) the purpose of the taking; and (4) a prayer that the court decree land to the petitioner. The petition will also likely include “Tender,” which is the dollar value the government has determined the property is worth.
Once the private property owner has been served with the Petition for Condemnation, the owner can respond to the petition by contesting the taking, contesting the price, or contesting both.
Because the taking will be stayed only if the government cannot show a legitimate purpose for the taking, many property owners strategically choose to spend their resources contesting the price, rather than the taking. In its Petition for Condemnation, the government entity will engage an appraiser to provide an appraisal value of the property.
What’s a fair price for the property?
Property owners are entitled to “just compensation.” Tennessee has interpreted “just compensation” to mean that the property owner must be paid fair market value which is, “the price that a reasonable buyer would give if he were willing to, but did not have to, purchase and that a willing seller would take if he were willing to, but did not have to, sell.” Nashville Housing Authority v. Cohen, 541 S.W.2d 947 (Tenn. 1976). The fair market value is the value on the date of taking of the property for public use. Sevier Cty. v. Waters, 126 S.W.3d 913, 915 (Tenn. Ct. App. 2003) In determining what constitutes fair market value, “the jury must consider all capabilities of the property and all the legitimate uses for which it is available and reasonably adapted.” Id.
Typically, the government entity pursuing the taking will have a lower appraised value of the property than the property owner. Balancing the interest of property owner receiving fair compensation with the interest of government in acquiring the property to provide necessary services without spending too much money is a difficult task for government entities.
At this point in the eminent domain process, the steps work like typical negotiations between parties. The entity and the property owner will try to come to a settlement on a price for the property. The parties may engage in arbitration, mediation, or simple informal negotiations.
If the parties cannot agree on a settlement, then the circuit court appoints a “jury of view” to examine the property to be condemned and to determine the amount of just compensation the property owner is entitled. The jury of view is typically comprised of five real estate experts. Once a jury of view determines the just compensation, the jury will file its report with the court, which can be confirmed or appealed by the parties.
Should we expect this practice to increase or decrease?
The short answer: Increase. Eminent domain is becoming more prevalent throughout Middle Tennessee, and especially in Nashville, with the East Bank Development, the rise of Transit Oriented development, and the continued growth of every neighborhood in the city. For those property owners thrown into eminent domain litigation, hiring an experienced attorney who knows how to navigate these competing interests can help the property owner reach a more favorable financial outcome.
The eminent domain attorneys at Thompson Burton can help any property owner navigate the
intricacies of the eminent domain process. We invite you to contact us through our website so we can advise you on eminent domain matter.