Real Estate Newsletter: Eminent Domain

Authored by Jennifer Cranston

Real Estate Newsletter: Eminent Domain

Eminent domain is the power of the government to condemn private property for a public use, subject to payment of just compensation. The process in Arizona is driven primarily by statute. Therefore, while eminent domain attorneys are familiar with the various steps, the details and logistics of a condemnation case can be confusing and frustrating for many. The following general description of the process is intended to provide a helpful guideline, but any party involved in a potential taking should consult with a lawyer familiar with eminent domain early in the process.

The condemnation process can be broken down into the following seven steps:

  1. Pre-condemnation investigation and preparation. The government first identifies the property needed for the pubic project and its ownership, and obtains surveys and appraisals of the property it needs to acquire.
  2. Pre-condemnation negotiation. The government is required by statute to make an offer to the owner, accompanied by an appraisal. This pre-filing offer often forms the basis for negotiation and settlement without the need for litigation.
  3. Initiation of a condemnation lawsuit. If the government cannot obtain all of the property by negotiation, it can condemn through the courts. The government must name all parties with any compensable interest in the land being condemned.
  4. Immediate possession. Some condemning bodies have the right to possess the property early in the lawsuit in exchange for payment of a reasonable estimate of just compensation. Once paid, the court signs an order of immediate possession, which gives the government the right to take possession of the property and start work on the project.
  5. Disclosure and discovery. To prepare for trial, each party must disclose its case to the other side as well as engage in discovery, including depositions of experts. At some point during this step, the parties typically participate in mediation or a settlement conference.
  6. Trial. After discovery is complete, the parties should be ready to present their evidence at a trial. Most condemnation cases are tried to a jury.
  7. Final order of condemnation. At the end of the case, either the judge or a jury will have determined the amount of just compensation owed by the government. Once the government pays this amount, the judge signs a final order of condemnation, which is the document that transfers title to the government.

A more detailed timeline and flow chart illustrating these steps are provided below. The timeline is color coded to match the corresponding step in the flow chart.

* Not all condemning entities have authority to obtain legal possession prior to a jury’s determination of damages. Those without the right of immediate possession either wait until the final order of condemnation is recorded or negotiate an early possession agreement with the defendant. In addition to obtaining legal possession, in order to obtain physical possession, condemning entities may also be required to comply with the notice and relocation procedures set forth in A.R.S. § 11-961 et seq. and 42 U.S.C. § 4621 et seq.
** If the parties reach agreement on the price and terms of compensation at any time following the initiation of the condemnation lawsuit, they may either (1) stipulate to a form of judgment and obtain a final order of condemnation from the court or (2) stipulate to a dismissal of the lawsuit and proceed with a private settlement agreement (and acquisition through escrow, if desired).
1These timeframes are intended to convey general information only. Each condemnation case involves unique facts and circumstances that can affect the timing of litigation tasks and deadlines and, therefore, should be analyzed on a case-by-case basis.