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What Is Inverse Condemnation?
4 Key Requirements for Lawsuit

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C.L. Mike Schmidt Published by C.L. Mike Schmidt
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Condemnations occur when the government takes physical possession of private property from its owner. Inverse condemnation, on the other hand, happens when a government entity takes private property for public use, resulting in a decrease in property value. 

In such instances, property owners have the option to file a claim for fair compensation through an inverse condemnation claim against the relevant government entity—be it at the state, federal, or local level. 

Our skilled attorneys at Schmidt and Clark specialize in handling inverse condemnation cases and have a strong track record of securing justice for our clients in these matters.

Quick Summary

  • Inverse condemnation is a legal concept where a government entity takes private property for public use, resulting in a decrease in property value.
  • Inverse condemnation cases occur when the government has taken property from the property owner through eminent domain without paying appropriate compensation for the physical takings or regulatory takings.
  • There are several types of inverse condemnation of federal claims, including seizing and damaging property, physical appropriation, exactions, and regulatory takings.

What Is Inverse Condemnation?

A closed sign up on a fenceInverse condemnation is a legal term used to describe a situation where a government entity takes private property for public use, which subsequently lowers the property’s value. 

In contrast to eminent domain, which allows the government to take property without the owner’s consent, inverse condemnation typically involves property owners seeking fair compensation when their property’s value is diminished due to government actions. 

Property owners can either accept the compensation offered or pursue legal action to secure what they believe to be more just compensation.

What Are Inverse Condemnation Cases?

Inverse condemnation cases are situations in which the government has taken or damaged the owner’s property without providing just compensation, leading property owners to initiate inverse condemnation actions against the government.

Inverse condemnation lawsuits have four key requirements:

  1. Proof of property ownership
  2. A government entity doing a physical or regulatory taking of the property
  3. Causing damage to the property
  4. The damage was caused directly by the government’s action.

What Is An Example of Inverse Condemnation?

A person looking at legal papersProperty owners whose properties are subject to government seizure are legally entitled to receive compensation equal to the fair market value of their property.

For instance, if a town decides to widen one of its main roads, this may necessitate taking a portion of a home or business’s driveway and even a part of the building itself.

Inverse condemnation, on the other hand, occurs when the property owner is indeed paid the fair market value for the property taken but disputes that the damage inflicted on the property surpasses the fair market value or the compensation offered. 

Typically, property owners will contend that the partial seizure has rendered it impossible to operate their business effectively or to reside on the property safely and adequately.

This is why they argue for additional compensation. In many cases, property owners assert their right to be compensated for the entire value of the property or building.

What Is The Difference Between Inverse Condemnation And Condemnation?

While condemnation typically involves a government agency taking land from a property owner, inverse condemnation is quite the opposite.

It’s a legal process where the property owner initiates a lawsuit against the government after their property has essentially been taken, severely damaged, or significantly devalued without receiving compensation.

In essence, inverse condemnation flips the traditional condemnation process, putting the property owner in the role of the plaintiff seeking redress.

Types Of Inverse Condemnation Claims

Paper claims scattered on the floor

There are a few common types of inverse condemnation claims, including: 

  • Seizing and damaging property: The government takes and damages private personal property.
  • Physical appropriation: When a governmental entity engages in physical takings of a property for a public purpose without paying compensation [1]. 
  • Exactions: Where the government requires a property owner to trade money or land for the government’s approval or permit.
  • Regulatory takings: When the government’s actions over-regulate a property to the extent in which it can no longer be used. 

Also Read: What is a Quiet Title Lawsuit?

Standard Tests For Regulatory Takings

Two standard tests have been approved by the United States Court or Supreme Court when it comes to regulatory takings.

They include:

1. Lucas Test

If the government regulation takes away all the use of the property, a total or Lucas taking has happened. If a property owner experiences a Lucas taking, it is their right to take inverse condemnation action for the entire value of the property before any regulation was put in place.

2. Penn Central Test

The Penn Central Test involves a temporary taking or partial taking of a property. With this taking, the private owner still has some use of the property after the regulation is put in place, but the use is severely restricted, and reasonable access is denied, which causes the value to decrease greatly.

When this happens, a property owner has a valid regulatory takings claim [2].

Situations in Which You May Have a Valid Claim

A person reviewing paper claimsTo make a claim valid, there are a few things to consider. If there was road construction, projects to manage flood control, or regulation that takes away an owner’s right to use their property.

These instances make for a strong case that the compensation received wasn’t equal to the value of the damage that has been caused under the takings clause.

Excessive noise from nearby airports, highways, or railroads can also give you cause for damage for a claim.

Other reasons for claims include difficulties accessing and using the property or having powerlines or other structures that cross the property. Overall, the property loss needs to be substantial and have some form of permanence.

The burden of proof is upon the property owner or plaintiff to prove that inverse condemnation has occurred, and the property owner has to exhaust administrative remedies before bringing the claim, which is why the help of an experienced lawyer is crucial in these cases.

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FAQs

What Is Overregulation of a Property?

Overregulation of a property is the excessive application of regulations to the point that it prevents the property owner’s proper use of the property, land, or other aspects related to the property.

Do You Need Help With an Inverse Condemnation Claim?

If your property rights have been taken away when a government entity took your property for public improvement or another purpose without just compensation, you can take legal action.

Our experienced domain lawyers at Schmidt and Clark can help you file your claim, represent you in court, and get you just compensation for your property.

In these cases, it is also hard to assess the damage to a property and quantify it to an amount, which our lawyers can help you with.

Contact Schmidt and Clark, LLP today for your free consultation.


References:

  1. https://www.mtas.tennessee.edu/reference/inverse-condemnation
  2. https://www.law.cornell.edu/constitution-conan/amendment-5/regulatory-takings-and-the-penn-central-framework

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