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An overview of eminent domain law in Tennessee

Perhaps you own land that has been in your family for generations. Or, taking it one step further, you operate a profitable business on the land and have no intention of ever selling it.

Now, imagine that one day, you receive a letter in the mail telling you the government is taking your land to build a new interstate. What are your rights? 

Defining eminent domain

There are several key points to understand about eminent domain. First, the government has the power of eminent domain, which is the inherent ability of a sovereign entity to take private property for the use of the public. The government’s eminent domain powers are absolute and total, limited only by the United States constitutional mandate of public use and just compensation.

Although specific eminent domain laws differ from state-to-state, Tennessee’s Constitution states that “no man’s particular services shall be demanded, or property taken, or applied to public use, without the consent of his representatives, or without just compensation being made therefore.”

Who can exercise the power of eminent domain?

The right of eminent domain may be legislatively delegated by the state to a county, municipality, public service corporation, private corporation, or even an individual, subject only to the constitutional limitations that it is exercised for a public use, and that the owner receives just compensation for the property rights taken and any limitations imposed by the specific statutory authority.

The power of eminent domain has been delegated to counties (section 29-17-201) and to municipalities (sections 29-17-301 and 29-17-901). It has also been generally delegated to any person or corporation authorized by law to construct railroads, turnpikes, canals, toll bridges, roads, causeways, or other public improvement works, under the provisions of state code section 29-16-101.

What are the legal requirements for exercising the power of eminent domain?

Under Tennessee law, property can only be condemned for a lawful public use. The condemning party must possess the proper delegation of eminent domain authority from the State to condemn property. In all situations, if the right to condemn exists, just compensation must be paid for the property being taken.

Condemning authorities must also obtain an appraisal of the property to be taken. They must file and record right-of-way plans, allow the property owner to examine the required appraisal, and negotiate in good faith with the property owner.

Can I challenge the right of the government to take my property?

Successful challenges to the government’s right to take are rare. In most cases, the taking is clearly for a public purpose, such as a new road, a sewer, or a power line. However, there can be exceptions, and you should speak with an experienced eminent domain attorney as soon as possible if you have questions about the government’s right to take your land, because the time for challenging the right to take is short. 

Assuming the right to take is not challenged, then the sole issue for the case becomes obtaining the just compensation that’s due to the property owner for the property taken.

How is just compensation determined?

Article 1, Section 21 of the Tennessee Constitution requires the award of fair cash market value of the property taken to the property owner. 

Additional compensation is provided to property owners in condemnation proceedings under Tennessee statutes. Tennessee Code section 29-16-114 states that just compensation includes the value of the land or rights taken without deduction and incidental damages, if any, to the remaining property of the owner. Generally, a property owner has the right to demand a jury to determine the just compensation due.

How is fair market value defined?

Fair market value of the property taken is to be established as of the date of taking. The date of taking is the date the condemning authority obtains legal possession of the land, which occurs after a petition for condemnation is filed — assuming the right to take is not challenged.

Fair cash market value means the amount of money that a willing buyer would pay for the property and that a willing seller would accept, when the owner is not compelled to buy, and the landowner is not compelled to sell. In determining fair cash market value, the jury in a condemnation case is instructed to consider all the property’s legitimate potential uses.

The market value of the property is to be determined without regard to any increase or decrease in value because of the announcement or construction of the public improvement for which the property is taken.

What if only part of my property is taken? Am I entitled to recover damages for the remaining part? 

In a partial condemnation case, a case in which the owner is left with remaining property, the owner is entitled to any decrease or diminution in the value of the remaining property as additional damages. These incidental damages (known in some jurisdictions as “severance damages”) to remaining property are measured by the difference in the remaining property’s fair cash market value immediately before and immediately after the taking.

Many factors have been recognized as relevant to the determination of incidental damages, including the loss of its use for any lawful purpose, any unsightliness of the property or inconvenience in its use, any impairment to the owner’s access to the property or between the property and nearby streets and highways, and any other consideration that could reduce the fair cash market value of the remaining property.

If the taking will cause me to lose my business, can I recover for my loss of profits and loss of the business? 

In general, no. The Tennessee Pattern Jury Instructions guide a jury “not to include in your verdict any sum for loss of business or inconvenience to business, if any.”

Am I entitled to compensation for moving personal property and equipment because of a taking?

To the extent that the condemnation of any parcel of real property requires the removal of furniture, household belongings, fixtures, equipment, machinery, or stock in trade of any person in rightful possession, regardless of whether such person has a legal interest in said property, section 29-16-114 requires that the reasonable expense of the removal of such property shall be considered in the assessment of incidental damages.

The reasonable expense of the removal of such property shall be construed as including the cost of any necessary disconnection, dismantling, or dissembling, the loading and drayage to another location not more than 50 miles distant, and the reassembling, reconnecting, and installing at that location.

Am I entitled to recover attorney fees, expert fees, or other litigation costs?

Unlike the law in many other states, attorney fees, expert witness fees, and other litigation expenses and costs incurred by an owner in defending a condemnation action are generally not recoverable. According to Tennessee Code sections 29-17-106 and 29-17-912, there are two exceptions to this rule: If the final judgment is that the acquiring party cannot acquire the real property by condemnation, or if the proceeding is abandoned by the acquiring party.

It should be noted, above all, that the specifics of legal issues vary between individual cases. No general guidance can substitute for the advice of a skilled eminent domain attorney, whose advice should be sought at the earliest opportunity after learning of possible or impending action.

This article was written by Kannon Conway and originally appeared in the Memphis Business Journal.

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