When Uncle Sam Wants Your Land

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

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

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

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

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