Eminent Domain versus Inverse Condemnation: When Government Regulation Goes Too Far

Here’s a quick civics lesson. Under the United States Constitution’s Tenth Amendment, powers not delegated to the federal government are reserved to the states (or people). What does that mean? Broadly interpreted, states have inherent police powers to pass laws to promote health, safety, welfare, and morals—which includes land use regulation.

But what happens when those laws go too far? Specifically, what if a regulation adversely affects property values? The Takings Clause of the U.S. Constitution’s Fifth Amendment restricts the government’s potent power of eminent domain: “private property [shall not] be taken for public use, without just compensation.”

Until 1922, the Takings Clause applied only when the government physically seized or occupied land—merely regulating land was not considered a taking, but rather, the exercise of local police powers. But a 1922 U.S. Supreme Court case, Pennsylvania Coal Co. v. Mahon, opened the door for the doctrine of “regulatory takings”—where government regulation significantly reduces property values without compensating the owners.

The Eminent Domain Process

Eminent domain is the government power to take private property for public use.

“Condemnation” is the formal process by which eminent domain is exercised. The process usually looks like this:

• A governmental authority identifies a public project, for which private land is needed.
• Landowners are notified.
• The government agency makes a formal offer to purchase (after which negotiations often take place).
• If the parties cannot agree on the purchase terms, the government will usually file suit using its power of eminent domain. (At that point, the government can take the land, and determining “just compensation” is deferred until later.)
• A judge or jury will decide the amount the landowner should receive.

Inverse Condemnation (or Regulatory Taking)

Inverse condemnation is sort of backwards. Here, the landowner must file suit (because the government did not use its eminent domain power, nor pay just compensation). The process is reversed (inverted), in that the property owner bears the burden to prove that the governmental regulation went too far and the reduction (diminution) of value.

A few examples of government regulations that diminish property values, and which courts might consider regulatory takings:

• Historic preservation
• Stricter building or zoning codes
• Environmental laws
• Life-safety requirements (for example, fire suppression systems required for existing multistory buildings)
• Rent control for apartments

If you have an inverse condemnation case, you need an experienced eminent domain lawyer to help you. Otherwise, you may not receive the fair compensation to which the law entitles you.

Do You Have an Eminent Domain or Inverse Condemnation Case? Contact an Experienced Kentucky Condemnation Attorney Today for Help

If your state, county, or local government passes a law, ordinance, or regulation, will your property value plummet? If so, how can you receive fair compensation? If you’re a landowner facing condemnation, or a government restriction reduces your land’s value, you need to hire the right attorney. You should receive fair compensation for your property’s reduction in value.

Talk with us. Trust the experienced landowner professionals at Sever Storey. Call us right away at (888) 318-3761, or contact us confidentially. We can put a nationwide team of experienced eminent domain professionals on your side.