The Eminent Domain Process in Illinois – Guest Post

  

Eminent Domain Process in Illinois

The Illinois eminent domain process (also sometimes referred to as condemnation) can be intimidating for private property owners.  The fact that the government can take all or part of an owner’s property is a harsh reality; therefore, it is important for owners to understand the eminent domain process.

What Is Eminent Domain?

Eminent domain is the government’s power to take any property for public use without the owner’s consent in exchange for the payment of just compensation.  The power of eminent domain is inherent in the State of Illinois and has been delegated to counties, municipalities, forest preserves, park districts, school districts, railroads, and public utilities.  However, there are two limits on the power of eminent domain set forth in the Illinois Constitution, Article 1, Section 15: (1) the taking must be for a public use and (2) the owner must be paid just compensation. The most common types of public use are roads, railroads, parks, municipal buildings (e.g., library, school, police station), utility projects and power lines.  Typically, the most highly contested aspect of the eminent domain process is the second limitation – the amount of just compensation.

Step 1: The Offer to Purchase & Negotiations

Prior to filing an eminent domain lawsuit, the government is required to make a written offer to purchase the owner’s property that includes (1) the size and type of property interest to be acquired; (2) the amount of just compensation the government is willing to pay for that property interest; and (3) the basis used to determine the amount of just compensation.  The government must make an effort, in good faith, to negotiate with the owner regarding the amount of compensation.  If the government and the owner reach an agreement, then the property interest is conveyed to the government via a traditional real estate closing.  If the government and the owner cannot reach an agreement, then the government will file a lawsuit to acquire the property.

Step 2: Government Initiates an Eminent Domain Proceeding

An eminent domain proceeding begins when the government files a complaint for condemnation in the circuit court of the county in which the property sought to be acquired is located.  The complaint usually contains the following eight elements:

  1. The names, as defendant, of any person or any entity that has an interest in the property, including lenders, tenants, etc.;
  2. The authority by which the government is exercising the power of eminent domain;
  3. The intended public use or purpose for which the real estate is being acquired;
  4. The acquisition is necessary for the stated public use or purpose;
  5. The government and owner were not able to reach an agreement as to the amount of just compensation;
  6. A description of the real estate the government seeks to acquire, including but not limited to the legal description, common address and/or property index number;
  7. A description of the property interest sought to be acquired; and
  8. A demand for a trial by jury.

Once the government files the complaint for condemnation, the owner and the owner’s attorney should discuss whether there is a basis to file a traverse and motion to dismiss the lawsuit challenging the government’s right to take the property. Any of the elements of the complaint can be a basis for the traverse including (1) whether the taking is necessary; (2) whether the taking is for a public purpose; (3) whether a bona fide attempt to agree was made; (4) the government’s authority to take the property; and (5) whether the complaint to condemn properly describes the property sought to be acquired.

If the court grants the traverse, the eminent domain proceeding is dismissed, and the government must pay the owner’s reasonable attorneys’ fees and costs.  If the court denies the traverse, the lawsuit proceeds to discovery and eventually a jury trial.

Step 3: Discovery and Disclosing Expert Opinions

In Illinois, eminent domain cases proceed in a manner similar to other civil cases.  However, in an eminent domain proceeding, the sole issue for the jury to decide is the amount of just compensation the owner is entitled to receive for the property being acquired.  Just compensation is defined as the fair cash market value of the property at its highest and best use on the date the government filed the complaint for condemnation.  “Fair cash market value” is the price a willing buyer would pay in cash and a willing seller would accept, when the buyer is not compelled to buy and the seller is not compelled to sell.  The phrase “highest and best use” means that use which would give the property its highest cash market value on the date the complaint was filed.  It may be the actual use of the property or a use that is reasonably probable and would enhance the market value of the property.

During discovery each side will retain expert witnesses, usually a licensed real estate appraiser and engineer, to prepare written reports of their opinions regarding the highest and best use of the property and the fair cash market value of the property, including any damages to the owner’s remaining property, if applicable.

One unique aspect of an Illinois eminent domain proceeding is that some government bodies have the right to acquire the property through the power of eminent domain using “quick-take.”  The right to “quick-take” is provided by statute to some government bodies, and it gives those public bodies the right to obtain title and possession to the owner’s property in an expedited manner. In addition to satisfying the legal requirements for exercising the power of eminent domain, the government must show an immediate need for the property and during the quick-take hearing the court determines the amount of preliminary just compensation that is due the owner. Once the government deposits that amount with the county treasurer, it obtains title and possession to the real estate.  The case continues, though, and the parties complete discovery as discussed above.

Step 4: Jury Trial, Payment of the Just Compensation Award & Appeal

Once discovery is complete, the case goes to trial, typically a jury trial.  The jury will, in most cases, take a trip to view the owner’s property, and then hear the evidence presented by the government attorney and the owner’s attorney, including testimony from each side’s expert appraiser, and decide the amount of just compensation to be paid.  Thereafter, the court will enter a final judgment order requiring the government to deposit the amount of just compensation with the county treasurer.  Upon deposit, the government obtains title to and possession of the property (if it does not have it already through the “quick-take” process discussed above), and the owner may petition the court to withdraw the funds from the county treasurer.

If there was a “quick-take” hearing, the jury is not told the amount of preliminary compensation that was paid.  If the verdict is more than the preliminary compensation, the government must pay the difference, including interest. If the verdict is less, the owner must refund the difference.

Either party may appeal the jury’s verdict.

Understanding the Eminent Domain Process – Guest Post

  

Eminent Domain Process

The eminent domain process (also sometimes referred to as condemnation) can be intimidating for private property owners.  The fact that the government can take all or part of an owner’s property is a harsh reality; therefore, it is important for owners to understand the eminent domain process.

What Is Eminent Domain?

Eminent domain is the government’s power to take any property for public use without the owner’s consent in exchange for the payment of just compensation.  The power of eminent domain is inherent in the State of Illinois and has been delegated to counties, municipalities, forest preserves, park districts, school districts, railroads, and public utilities.  However, there are two limits on the power of eminent domain set forth in the Illinois Constitution, Article 1, Section 15: (1) the taking must be for a public use and (2) the owner must be paid just compensation. The most common types of public use are roads, railroads, parks, municipal buildings (e.g., library, school, police station), utility projects and power lines.  Typically, the most highly contested aspect of the eminent domain process is the second limitation – the amount of just compensation.

Step 1: The Offer to Purchase & Negotiations

Prior to filing an eminent domain lawsuit, the government is required to make a written offer to purchase the owner’s property that includes (1) the size and type of property interest to be acquired; (2) the amount of just compensation the government is willing to pay for that property interest; and (3) the basis used to determine the amount of just compensation.  The government must make an effort, in good faith, to negotiate with the owner regarding the amount of compensation.  If the government and the owner reach an agreement, then the property interest is conveyed to the government via a traditional real estate closing.  If the government and the owner cannot reach an agreement, then the government will file a lawsuit to acquire the property.

Step 2: Government Initiates an Eminent Domain Proceeding

An eminent domain proceeding begins when the government files a complaint for condemnation in the circuit court of the county in which the property sought to be acquired is located.  The complaint usually contains the following eight elements:

  1. The names, as defendant, of any person or any entity that has an interest in the property, including lenders, tenants, etc.;
  2. The authority by which the government is exercising the power of eminent domain;
  3. The intended public use or purpose for which the real estate is being acquired;
  4. The acquisition is necessary for the stated public use or purpose;
  5. The government and owner were not able to reach an agreement as to the amount of just compensation;
  6. A description of the real estate the government seeks to acquire, including but not limited to the legal description, common address and/or property index number;
  7. A description of the property interest sought to be acquired; and
  8. A demand for a trial by jury.

Once the government files the complaint for condemnation, the owner and the owner’s attorney should discuss whether there is a basis to file a traverse and motion to dismiss the lawsuit challenging the government’s right to take the property. Any of the elements of the complaint can be a basis for the traverse including (1) whether the taking is necessary; (2) whether the taking is for a public purpose; (3) whether a bona fide attempt to agree was made; (4) the government’s authority to take the property; and (5) whether the complaint to condemn properly describes the property sought to be acquired.

If the court grants the traverse, the eminent domain proceeding is dismissed, and the government must pay the owner’s reasonable attorneys’ fees and costs.  If the court denies the traverse, the lawsuit proceeds to discovery and eventually a jury trial.

Step 3: Discovery and Disclosing Expert Opinions

In Illinois, eminent domain cases proceed in a manner similar to other civil cases.  However, in an eminent domain proceeding, the sole issue for the jury to decide is the amount of just compensation the owner is entitled to receive for the property being acquired.  Just compensation is defined as the fair cash market value of the property at its highest and best use on the date the government filed the complaint for condemnation.  “Fair cash market value” is the price a willing buyer would pay in cash and a willing seller would accept, when the buyer is not compelled to buy and the seller is not compelled to sell.  The phrase “highest and best use” means that use which would give the property its highest cash market value on the date the complaint was filed.  It may be the actual use of the property or a use that is reasonably probable and would enhance the market value of the property.

During discovery each side will retain expert witnesses, usually a licensed real estate appraiser and engineer, to prepare written reports of their opinions regarding the highest and best use of the property and the fair cash market value of the property, including any damages to the owner’s remaining property, if applicable.

One unique aspect of an Illinois eminent domain proceeding is that some government bodies have the right to acquire the property through the power of eminent domain using “quick-take.”  The right to “quick-take” is provided by statute to some government bodies, and it gives those public bodies the right to obtain title and possession to the owner’s property in an expedited manner. In addition to satisfying the legal requirements for exercising the power of eminent domain, the government must show an immediate need for the property and during the quick-take hearing the court determines the amount of preliminary just compensation that is due the owner. Once the government deposits that amount with the county treasurer, it obtains title and possession to the real estate.  The case continues, though, and the parties complete discovery as discussed above.

Step 4: Jury Trial, Payment of the Just Compensation Award & Appeal

Once discovery is complete, the case goes to trial, typically a jury trial.  The jury will, in most cases, take a trip to view the owner’s property, and then hear the evidence presented by the government attorney and the owner’s attorney, including testimony from each side’s expert appraiser, and decide the amount of just compensation to be paid.  Thereafter, the court will enter a final judgment order requiring the government to deposit the amount of just compensation with the county treasurer.  Upon deposit, the government obtains title to and possession of the property (if it does not have it already through the “quick-take” process discussed above), and the owner may petition the court to withdraw the funds from the county treasurer.

If there was a “quick-take” hearing, the jury is not told the amount of preliminary compensation that was paid.  If the verdict is more than the preliminary compensation, the government must pay the difference, including interest. If the verdict is less, the owner must refund the difference.

Either party may appeal the jury’s verdict.