Municipal construction projects are a necessary part of any city’s growth and development, whether new roads and sidewalks or sewer lines and other necessary improvements.
However, there are times when projects require the acquisition of private property. Typically, a governing entity would assess the property and acquire it at fair market value, but when the owner is not willing to let it go easily, the government has the option to initiate eminent domain.
Eminent domain is not a popular topic among the public. Many see it as an unfair seizing of a person’s property or home. Because of this, municipalities opting to use it must deal not only with an unwilling landowner but with public opinion, as well.
When to use eminent domain
“There are a number of purposes for which municipalities may use eminent domain, including for the installation of critical infrastructure,” Eric Shytle, who serves as general counsel for the Municipal Association of South Carolina, said.
He listed water, sewer, drainage, electric and natural gas lines, roads, sidewalks and public facilities. Blighted areas and properties that pose a safety hazard also come under condemnation authority, he added.
How to proceed
According to Shytle, the best use of eminent domain is as a last resort. Shytle outlined South Carolina’s requirements on the subject.
“All eminent domain actions … must comply with the South Carolina Eminent Domain Procedure Act,” he said. “This act provides a uniform procedure for eminent domain actions in the state.”
The act, he went on to say, requires a government to obtain an appraisal on the property in question, determine just compensation and provide the appraisal to the landowner. From there, the two negotiate a price for the property.
“Only if the negotiation is unsuccessful may the government commence the formal eminent domain action,” Shytle said. “In the notice that starts the formal action, the government must certify that it tried but failed to negotiate just compensation with the landowner.”
When this occurs, the landowner has the right to obtain their own appraisal, on which they may base their own asking price.
“If the government agrees to pay the amount specified in the landowner’s appraisal, the action is concluded,” Shytle said. “But if the government does not agree to the landowner’s appraisal, the action proceeds to a jury trial.”
What happens next
During an eminent domain case, Shytle said the jury takes into account both assessments, as well as information from experts in the field like surveyors, planners, engineers and others.
“Ultimately, the value determined by the jury will be the definitive just compensation for the parcel, subject to ordinary appeal rights to the higher courts,” Shytle said.
At the start, the governing body has the choice to pay the amount of its appraisal right away or wait until the jury makes its final decision pertaining to just compensation.
The first choice, he said, is to take immediate possession of the property. This, however, comes with the risk that the jury will establish a higher value for the property than the initial appraisal.
The second choice is to await the final decision. This leaves it open for the governing body to forego condemnation if the jury establishes an amount higher than the appraisal.
At any time during the proceedings, the government and the landowner have the option to settle.
“In general, then, the eminent domain process in South Carolina is highly protective of landowners’ rights and is designed to encourage negotiated settlements,” Shytle said.
A last resort
Given property owners’ rights, Shytle said, eminent domain is typically only used as a last resort in South Carolina.
“Rather than risk a potentially unlimited liability to pay just compensation as determined by a jury, the government will almost always prefer to avoid the condemnation altogether or to reach a negotiated settlement,” he said.
Most of the time, he added, only the most vital projects end up in what he termed, “formally contested proceedings.”
However, according to Shytle, if an agreement simply cannot be reached, the city should still look for ways to avoid condemning the property.
“In many cases, the project can be redesigned to avoid having to acquire the disputed parcel,” he said. “Perhaps the lines can be shifted or the site of the project can be moved.”
When opposition arises
Human nature dictates that people will often rally toward a cause if they believe a situation is unjust. When it comes to government acquisition of private property, members of the public may feel compelled to take a landowner’s side, often spurred on by news media reports.
In other cases, a landowner may be reluctant to give up property that has belonged to his or her family for generations or may feel as if they are being bullied “off their land.” These can prove difficult to explain.
In most situations, Shytle said the government will accept the landowner’s appraisal, meaning the case will not progress as far as a jury trial. However, in situations where multiple properties are needed, such as when building a road, there may be what Shytle referred to as “holdout” parcels, meaning the landowner has decided to demand a very high price for the property.
“Because the taxpayers of the city ultimately pay for the acquisition, paying the holdout price would cause those taxpayers as a whole to fund a windfall to the holdout landowners,” Shytle said.