Eminent domain can be tricky to understand and even more complex when trying to navigate its complexities without legal assistance. 

If a private company or government agency contacts you about your property, knowing your rights is essential to protect yourself and make informed decisions.

This guide breaks down key aspects of eminent domain for private ownership, explains how private companies can use it, and provides insights into what you can do to safeguard your interests.

Table of Contents

What Is Eminent Domain?

Eminent domain gives local, state, or federal governments the power to take private property for public use. The big question is, can eminent domain be used for private ownership? Surprisingly, the answer is yes. Even private entities can sometimes use or benefit from eminent domain for public use, such as in cases involving redevelopment or infrastructure projects.

Depending on your location, there may be additional legal safeguards to protect landowners when facing eminent domain private use situations. Understanding these protections can make a significant difference if your property is targeted.

When Can Private Companies Use Eminent Domain?

Private companies can leverage eminent domain for public use in two primary ways. They may exercise inherent or delegated authority, as utility companies often do. Alternatively, they can benefit when a government entity with eminent domain authority, such as a redevelopment commission, transfers acquired land to them.

If you’re caught in an eminent domain dispute, understanding your rights is vital. The attorneys at Sever Walker Padgitt can help you navigate your specific situation and explore your legal options. In some cases, you may even have grounds to challenge the use of eminent domain entirely.

What Should I Do If a Private Company Contacts Me About Eminent Domain?

  • Stay Calm: Do not agree to anything immediately or assume the company has the right to your land.
  • Seek Legal Advice: Contact an attorney experienced in eminent domain to review the situation and advise you on your rights.
  • Gather Information: Request documentation about the project, the company’s authority to use eminent domain, and the proposed compensation.

State laws determine whether private companies can exercise eminent domain for public use. Often, utility companies, such as pipeline developers, are granted this authority to construct necessary infrastructure.

As a private landowner facing eminent domain from a private company, you may wonder, “Is this legal? Can I stop it?”

Generally, a private company must receive specific authorization from the state or another governmental body, like the Federal Energy Regulatory Commission (FERC) or a local utility commission. 

If the company lacks this authority outright, it may need to prove its project serves a public use to gain approval before moving forward. This process is often at the center of disputes, asking can eminent domain be used for private use, especially when projects appear to favor private interests over public benefit.

Private companies can also benefit from eminent domain for public use when a government entity, such as a city or state, acquires land and transfers it to them. This often happens in redevelopment projects designed to boost the local tax base. 

However, states usually impose strict rules for these scenarios, often requiring the property in question to meet a legal definition of “blight” before it can be acquired and transferred to a private developer.

Some jurisdictions take additional steps to protect landowners. For example, they may mandate higher compensation rates—such as 150% of the property’s value—when private entities benefit from eminent domain. These measures aim to ensure fairness in an otherwise contentious process.

When a private entity, such as a pipeline or private developer vis a vis redevelopment commission, wants your land, it is imperative that you have an attorney who understands what they can and cannot do. With the right attorneys in your corner, you may be able to demonstrate that the company did not follow the law in attempting to seize your land.

Eminent Domain Laws By State

There are two types of procedures a condemnor may follow in seeking to acquire land under eminent domain: state or federal. 

Federal procedure is generally limited to federal condemnors (the United States government and agencies and interstate natural gas pipelines, generally), and state procedure is limited to state-level condemnors (states, state agencies, cities, municipalities, utility companies with delegated authority). 

Each state has its own rules and regulations, so the State of Georgia may utilize eminent domain differently than the State of California. 

These types of differences from state to state apply to private companies seeking to acquire property through eminent domain as well. Each state is different, and while some states are very stringent about private entities using eminent domain, others are lax.

With representation available across the country, the eminent domain attorneys at Sever Walker Padgitt can review your case and walk you through potential next steps, depending on your specific location.

How Do I Determine Fair Compensation for My Property?

Determining fair compensation when facing eminent domain involves more than just knowing the market value of your property. 

It also includes accounting for potential losses, such as business disruption, relocation expenses, or sentimental value tied to the property. To ensure you receive just compensation, follow these key steps:

  • Just Say No: You have the right to say no to an offer of compensation for your property. Consult with an attorney to find out if “no” is the right answer when the government comes calling.
  • Expert Analysis: Consult legal and financial experts to evaluate damages beyond the market value, such as lost income or diminished use of the property.
  • Negotiation: Work with an experienced attorney to advocate for compensation that reflects the full value of your property, including relocation costs and intangible factors like emotional ties.

In most cases, refusing to sell your property outright is difficult if the entity has proper eminent domain authority. However, you may have options:

  • Challenge Authority: Investigate whether the company has the legal right to exercise eminent domain in your situation, especially in cases of eminent domain for private ownership or eminent domain by redevelopment commissions targeting your land.
  • Negotiate Terms: Use legal representation to improve the terms of compensation or set conditions on the acquisition to better protect your interests.
  • File a Legal Objection: Contest the acquisition in court, particularly if the project does not satisfy the “public use” requirement. This can be a strong legal argument in disputes over whether eminent domain can be used for a certain purpose.

One of the most effective ways to challenge eminent domain is by disputing whether the project truly serves a public use. While courts often interpret “public use” broadly, there are notable exceptions that property owners can leverage. 

For instance, you may be able to demonstrate that the project primarily benefits private interests rather than the public. Highlighting legal precedents where similar projects were successfully contested can also strengthen your case. 

Some states have stricter laws regarding eminent domain, providing an opportunity to use these protections to your advantage. 

An experienced attorney at Sever Walker Padgitt can evaluate the specifics of your situation and help build a compelling argument to challenge the public use requirement, potentially stopping the acquisition of your property.

Restrictions for Private Companies

Just as there are sizable limitations on when the government can use the power of eminent domain, there are restrictions for private companies who want to use it as well.

  • Proving Public Use: The company must demonstrate the project benefits the public, not just private interests.
  • Compliance with Law: Failure to follow statutory procedures can invalidate their claim.
  • Government Transfers: Redevelopment projects involving land transfers must meet additional legal hurdles, such as proving blight or adhering to fair compensation rules.

For example, if a national energy company like Tennessee Gas, AEP, and/or Enbridge wishes to acquire your property to put in a natural gas pipeline but does not have eminent domain authority, via statute or delegation, they may not have the ability to take your property (despite telling you otherwise). This situation would require a full analysis of the project and the relevant law.

This situation gets even more complex when a governmental entity seeks to acquire your property to then transfer to a private entity. If a redevelopment commission approaches you about your property, you should contact an attorney immediately.

Professional and Skilled Eminent Domain Attorneys

The best way to ensure you are either being fairly compensated for your land—or are being adequately defended—is by working with a law firm with the utmost knowledge and professionalism. 

When it comes to holding users of eminent domain accountable, our attorneys are ready to take on whatever the situation is: pipeline, redevelopment commission, municipality, or any other exercise of eminent domain. When you become a client, we vow to fight for you each step of the way.  

If you have any questions regarding eminent domain for private use, contact our lawyers at Sever Walker Padgitt. They will ensure you are as well-informed as possible and help you expertly fight your case.