Condemnation and Eminent Domain

Property owners and occupants have the right to an attorney from the moment they know the property is being considered in the scope of a condemnation project. Timing is especially critical if property owners wish to contest the condemning authority’s right to take in a redevelopment project. Condemning authorities do not typically advise property owners that they need legal counsel. Eminent domain is an area that is best handled by attorneys who have experience in this practice.

Valuation in eminent domain cases in New Jersey is a two-step process. The first step is the hearing by the condemnation commissioners. Upon determination that the condemning authority is authorized to and has duly exercised its power of eminent domain, the court appoints three commissioners to determine the compensation to be paid. The commissioners are residents of the county in which the property being condemned is located or, in the case of the commissioner who must be an attorney, be actively engaged in the practice of law in the county. One commissioner will be an attorney, who is admitted to practice in New Jersey for at least 10 years, and who will preside at all hearings and rule on all questions of evidence and procedure, subject to a review by a majority of the commissioners. The second step in this process occurs if either the property owner or the condemning authority decides to appeal the award of the commissioners. The law gives any party who has appeared at the hearings of the commissioners, either personally or through an attorney, the right to appeal the award of the commissioners within 20 days of receipt of the award. The hearing on appeal shall be a trial de novo, without a jury, unless a jury trial is demanded. The award of the commissioners is not admitted to evidence in the event that the matter goes to trial. At any point in the process, settlement can take place.

At the commencement of the action, the condemning authority files a complaint and a declaration of taking along with a deposit of its estimated compensation. The deposit is placed in the New Jersey Superior Court Trust Fund and may be withdrawn without prejudice by the property owner subject to liens and encumbrances on the property.

Redevelopment projects are initiated by municipalities. The public is first noticed that an ordinance will be introduced declaring an area in need of redevelopment (blight). A second meeting will be held 14 days later to adopt the ordinance. The public meeting precedes the adoption of the ordinance. Once the ordinance is passed, the municipality issues a contract to the redeveloper for the plan. A property owner has 45 days from the adoption of the ordinance to file an action contesting the validity of the ordinance.

Relocation assistance is provided under the New Jersey Relocation Assistance Act to all property owners, occupants or tenants who are dislocated as a result of the public project regardless of whether the acquisition is negotiated or subject to a condemnation proceeding. Relocation payments are separate and apart from the monies paid in the eminent domain proceeding and include moving costs and business reestablishment costs. In some cases, a business discontinuance allowance is paid. In residential cases, closing costs are reimbursed. Tenants should examine the condemnation clause in their lease vis-à-vis their rights with the landlord in the condemnation case.

The “right of way” process begins when the condemning authority decides to acquire a partial or total taking of land for widening of a new or existing highway, road or pipeline. The property owner is notified by letter of the proposed condemnation and the condemning authority orders an appraisal of the property. The property owner is given the opportunity to accompany the appraiser during the property inspection. The condemning authority will make the property owner an offer by certified mail for the fair market value of the property based on the agency’s approved appraisal of the property. When the property owner rejects the offer or fails to accept it within a period no less than 14 days from the mailing of the offer, it is accepted as conclusive proof that the condemning authority is unable to acquire the property through negotiations, and must initiate condemnation of the property by eminent domain.

There are three stages in the process of building new or improving existing highways: design, right of way and construction. The potential for access modification arises when the New Jersey Department of Transportation considers improvement or widening of an existing highway. The NJDOT may propose to eliminate or modify access in the first phase of design. The New Jersey State Highway Access Management Act provides the property owner with the right to a hearing within 30 days of notification regarding revocation or modification of access.

The New Jersey Department of Transportation, New Jersey Schools Construction Corporation, state colleges, housing authorities, public utilities and natural gas line utilities are agencies that may condemn private land respectively for public use. Municipalities and boards of education typically engage in land acquisition for redevelopment projects, open space and other public projects.

The federal government, the state government, municipalities and subdivisions thereof have the right under the United States Constitution, the New Jersey State Constitution and the Eminent Domain Act of 1971 to acquire private land for public use with just compensation. The United States Constitution, Article 5 states: “No person shall be…deprived of life, liberty or property, without due process of law; nor shall private property be taken for public use, without just compensation.” The New Jersey Constitution, Article 1, Section 20 states: “Private property shall not be taken for public use without just compensation. Individuals or private corporations shall not be authorized to take private property for public use without just compensation first made to the owners.”

The Eminent Domain Act Of 1971 Defines Property:

“Property” means land, or any interest in land, and (1) any building, structure or another improvement imbedded or affixed to land, and any article so affixed or attached to such building, structure or improvement as to be an essential and integral part thereof, (2) any article affixed or attached to such property in such manner that it cannot be removed without material injury to itself or to the property, (3) any article so designed, constructed or specially adapted to the purpose for which such property is used that (a) it is an essential accessory or part of such property; (b) it is not capable of use elsewhere; and (c) would lose substantially all its value if removed from such property.