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When Uncle Sam Wants Your Land

Advice on how to handle the government when it declares "eminent domain"

Opinions expressed by Entrepreneur contributors are their own.

If a government agency wants your land (or a portion of it), your first official notice is likely to be a letter stating the agency's interest in the property. This letter--or one soon to follow--typically includes the agency's initial proposal for compensation based on its own appraisal. In many cases, you and your attorney have an opportunity to negotiate with the agency, bringing in your own evidence of the value of the property and what it would cost you to relocate your business.

If you learn your property may be subject to condemnation, get involved immediately by taking these steps:

  • Find a lawyer with experience in the area of government-condemned property. You have a great deal to lose, so don't scrimp on legal counsel. A good lawyer will make sure you don't accidentally waive your rights.
  • Get your business records in order so you have proof of your normal income, market base, customers per hour, or anything else that might show how much you'd lose if you had to close your current location.
  • If you have dreams about developing the site yourself, have your plans drawn up to show its "highest and best use." What looks to the government agency like a vacant lot might be the property you were on the verge of turning into an office park.
  • Have an appraiser assess your property so you'll be prepared in case the agency makes a low-ball compensation offer. Make sure he or she is a qualified appraiser who'll be respected by both sides, not just someone who will say what you want to hear.
  • Get bids on relocation costs, such as moving furnishings, signs and equipment. Do you have grandfathered machinery that you'd have to replace to meet current regulations?
  • Begin negotiating with the agency as soon as possible. Take documentation to show what this move would cost you and how you'd suggest the project could be altered so you wouldn't have to move.
  • Find out if part of the property would be enough. In some states, the government must pay business interruption costs if they take part of the property but not if they take all of it--so it's in the government's interest to force you out completely. By putting a face on the business and making reasonable requests, you might be able to avoid this problem.

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