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Taking Possession of Property Before Final Value is Determined

California Code of Civil Procedure section 1255.410 authorizes the condemning agency to ask the court for possession of the property even before judgement has been entered in the eminent domain proceeding. The court may only do so, however, if the condemning agency has first deposited into the County or State Treasury the amount which it determines as the probable compensation to be paid for the property. If the court grants the condemning agency’s request for early possession — which the court almost always will — the property owner, in most cases, will be given 90 days notice before having to vacate the property.

Once the condemning agency deposits the amount of probable compensation, the property owner or tenant may apply to the court to withdraw that portion of the deposit which represents the owner’s or tenant’s probable amount of compensation. You may withdraw the amount of the agency’s deposit without waiving your claim for greater compensation. However, withdrawing the deposit does waive any challenge to the government’s right to take the property.

Disagreeing with the Government’s Deposit Amount

If you believe that the condemning agency’s deposit of probable compensation is too low, the property owner may apply to the court for an order requiring an increase in the amount of the deposit. Only upon a very strong showing that the deposit is much too low will the court grant such a request for an increase in the deposit. Generally, the property owner’s remedy will be to litigate the amount of compensation at trial or try to settle the amount of compensation before trial.

Again, asserting a claim for greater compensation in the eminent domain action often results in the owner obtaining higher compensation than that offered by the condemning agency. Experienced eminent domain counsel should be contacted to discuss your specific case. Usually, your case can be handled on a contingency based on a percentage of the amount the attorney obtains over and above the amount the condemning agency’s offer. In other words, the property owner owes the attorney no fee (other than reimbursement of out-of-pocket costs) unless the attorney obtains more than the amount of the condemning agency’s offer.

The Government’s Offer…Accept?

A property owner is not required to accept the condemning agency’s offer. Instead, the property owner may make a counter-offer, or may assert a higher value for his or her property once the eminent domain action is filed in court.

Property owners, tenants and business owners often receive higher, and in some cases, much higher compensation than the amount of the condemning agency’s offer by asserting a claim for greater compensation in the eminent domain proceeding. This is, of course, not always the case and an experienced eminent domain attorney should be contacted to evaluate each case on its own merits.

Understanding a “Resolution of Necessity”

A “resolution of necessity” is the government agency’s formal decision to acquire property by eminent domain. It must be adopted before the condemning agency can commence an eminent domain action in court.

California Code of Civil Procedure section 1245.230 provides that in order to adopt a resolution of ncessity, the government agency must find (1) that the project for which the property is to be acquired is necessary; (2) that the property is necessary for the public project; (3) that the project is located in such a manner as to offer the greatest public benefit with the least private detriment; and (4) that an offer to purchase the property has been made. Unless there are extraordinary circumstances (such as gross abuse of discretion, fraud or bribery), the agency’s finding that it needs the property is generally considered conclusive.

General Steps Involved in an Eminent Domain Proceeding

Generally, when the government wants to take your property by eminent domain, you can expect the government to take some or all of the following steps in about the following order:

1. Initial contact by government agency to express interest in the property and/or scheduling date for appraisal or environmental assessment of the property;

2. Appraisal of the property, including improvements, by agency retained apprasier;

3. Offer to purchase the property is made to the owner, together with summary of appraisal upon which offer of purchase is made;

4. Notice of public hearing to adopt “resolution of necessity” to acquire the property by eminent domain;

5. Public hearing is held to adopt “resolution of necessity” to acquire the property by eminent domain;

6. Eminent domain case is filed in court and served on property owner;

7. Deposit by agency of the probable amount of just compensation is paid into court and request by agency for early possession of the property;

8. Discovery (i.e., depositions and document production) takes place in eminent domain action, and both the property owner and government hire appraisers to determine “fair market value” of the subject property;

9. The property owner and government exchange their respective appraisers’ reports;

10. Final settlement offers and demands are exchanged (about 20 days before trial);

11. If settlement cannot be reached, trial of the eminent domain action takes place before a jury whose job it is to determine “fair market value” of the subject property;

12. Jury returns verdict and judgement is entered;

13. Government pays judgement within 30 days following entry of judgement and title to subject property is transferred to the government by the court.

In addition, early in the process – owner/occupants and/or tenants should be contacted by a relocation agent retained by the government. The purpose of the relocation agent is to provide assistance to residents and business owners to relocate their residence or business.

COPYRIGHT © 2010 Arthur J. Hazarabedian, Esq.