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What is Eminent Domain? - Real Estate

In United States Law, Eminent Domain is the power of the state to appropriate private property for its own use without the owner's consent. In England and Wales, and other jurisdictions that follow the principles of English law, the related term compulsory purchase is used. Governments most commonly use the power of eminent domain when the acquisition of real property is necessary for the completion of a public project such as a road, and the owner of the required property is unwilling to negotiate a price for its sale.

Some coined the term "Expropriation" to refer to "appropriations" under eminent domain law, and may especially be used with regard to jurisdictions that do not pay compensation for the confiscated property. Examples include the 1960 Cuban expropriation of property held by U.S. citizens, following a breakdown in economic and diplomatic relations between the Eisenhower administration and the Castro regime.

The term "Condemnation" is used to describe the act of a government exercising its authority of eminent domain. It is not to be confused with the term of the same name that describes the legal process whereby real property, generally a building, is deemed legally unfit for habitation due to its physical defects. Condemnation via eminent domain indicates the government is taking the property; usually, the only thing that remains to be decided is the amount of just compensation.

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In the United States, the Fifth Amendment to the Constitution requires that just compensation be paid when the power of eminent domain is used, and requires that "public purpose" of the property bedemonstrated. Over the years the definition of "public purpose" has expanded to include economic development plans which use eminent domain seizures to enable commercial development for the purpose of generating more tax revenue for the local government. Critics contend this perverts the intent of eminent domain law and tramples Personal Property Rights.

In 1981, in Michigan, the Supreme Court of Michigan, building on the precedent set by Berman v. Parker, 348 U.S. 26 (1954), permitted the neighborhood of Poletown to be taken in order to build a General Motors plant. Courts in other states relied on this decision, which was overturned in 2004, as precedent. This expansion of the definition was argued before the United States Supreme Court in February of 2005, in Kelo v. New London. In June of 2005, the Supreme Court issued their decision in favor of New London, making eminent domain applicable for private economic development.

Following this decision, paperwork was filed to obtain the property of Justice David Souter, who voted in favor of the Kelo decision.In other cases eminent domain has been used by communities to take control of planning and development. Such is the case of the Dudley Street Initiative, a community group in Boston which attained the right to eminent domain and have used it to reclaim vacant properties in the purpose of positive community development.