Some projects for public benefit lead to the forced sale of real estate. Individuals and businesses may be subject to condemnation proceedings under California’s eminent domain statutes.
Those owners may not be the only ones negatively impacted by the project. Those with properties adjacent to the project site may not lose their real estate through eminent domain proceedings or condemnation in civil court. However, the impact of the project may effectively mean that they cannot continue to use the property as they did before. In such cases, property owners may be eligible for inverse condemnation proceedings to pursue financial relief.
What is inverse condemnation?
Condemnation is the legal process through which the state or a business completing a project for the state forces the sale of real estate under eminent domain statutes. Those who lose their real property to condemnation proceedings generally receive just compensation for the economic impact of the forced sale of their property.
Inverse condemnation is essentially a request for compensation when a project for public benefits negatively affects the fair market value of nearby real estate or prevents the owner from using the property as they previously did. Those facing regulatory issues or challenges related to the California Environmental Quality Act (CEQA) may suddenly become unable to use their property as they did before.
For example, a property owner may feel relieved that the state did not seize their real estate for the expansion of a big road or the installation of a roundabout at a high-traffic intersection. Still, the massive increase in traffic that follows project completion may negatively affect their property values or make accessing a property all but impossible. Homeowners may not be able to turn in and out of their driveway without risking a collision, and businesses may see a marked decrease in foot traffic.
In many scenarios where a large project for public benefit affects the value or use of a property, owners can pursue an inverse condemnation claim asking for compensation for the car by the public project.
Inverse condemnation claims are complex
Any form of real estate litigation requires a thorough understanding of state statutes and a review of all relevant documents, including deeds and possibly business plans. Property owners frustrated by the economic impact of a current project underway or the completion of a project near their real estate holdings may need guidance when determining if an inverse compensation claim is possible and calculating the financial impact that the project has had on their business or real estate holdings.
Consulting with a real estate attorney can help those dealing with post-project complications assert themselves and explore their options. A successful inverse condemnation lawsuit can provide compensation that can offset the harm caused by a major project that could otherwise cause financial harm.