As the State of Iowa continues to grow and prosper, inevitably there will be a need for more roads for Iowans. When that need arises, the State will exercise its right of eminent domain and condemn the land. The purpose of this article is to help landowners who are facing condemnation proceedings from the State understand what the process is, what their rights are, and what options they have.
The term eminent domain refers to the government’s power to take private land for public use. This power is not unique to Iowa – the authority for eminent domain can be found in the U.S. Constitution, multiple federal laws, and in the laws of all states (although state procedures may vary). What constitutes “public use?" Think of things we all have rights to use – roads, highways, parks, to name a few. Sometimes, land can be condemned by private companies if the company intends to use the land for the benefit of the public – think of electric companies.
When the State exercises its right to eminent domain, it does so through a process known as condemnation. This doesn’t have a negative meaning despite being referred to as “condemning” the land – in fact in many instances the land is highly valuable. The process for condemning land is governed by rules set forth in the Iowa Code, and the State is required to follow all of the rules when condemning land. The rules are set forth in Iowa Code Chapter 6A and 6B.
The State wants my land – what are my options?
Assume the State, or someone from a State agency like the DOT, has approached you and expressed an interest in acquiring your land so that they can expand a highway. The first thing to understand is, unfortunately, as long as the State follows the rules, it will be taking your land. Unless it is shown that the State has not followed proper procedure, or that the land will not be put to public use, there is no “winning” for the landowner – the land becomes the property of the State one way or the other. This is just one reason why it is important to retain a firm like Wando & Associates early on in the process to oversee the proceedings and make sure the State is following the rules and not cutting corners.
However, although the State will ultimately get the land, they don’t get to just “take” it. They are required to provide you with what is called “just compensation.” Essentially, they have to give you a fair price for the land. What you consider a fair price and what the State considers a fair price can be quite different, and this is again where it is helpful to have an attorney advocating your position. Additionally, the State will only take what it considers necessary for “public use.” Imagine you own 80 acres next to a highway. The State is going to expand the highway to add additional lanes. Those additional lanes will take up 20 acres. The State will only make you an offer on those 20 acres, and leave the rest to you. As explained below, however, sometimes you may want to force the State to pay you for the entire 80 acres if it is in your benefit.
When the State decides it needs your land for eminent domain purposes (let's stick with our highway expansion example), it will first approach you informally to see if you are willing to sell. They will make you an offer that they consider to be fair. What do you do at this point?
You have four basic options:
1. Take the offer
If you think the offer from the State is fair, or if you simply don’t want to deal with the hassle of fighting the State, you can always take the State’s offer. They will promptly pay you and transfer the land.
2. Ask for a bigger offer
There’s nothing that says you have to take the State’s offer at face value. The State usually is trying to get the best deal it can and so will start with an offer that is rather low. You can always negotiate for a higher selling price. There is no deadline for the negotiations until the State decides it won’t reach a deal with you and starts formal condemnation proceedings. Even if you have been negotiating with the State already, the State will still send you a formal Notice that they have initiated condemnation proceedings. You will want to pay careful attention to the date of the notice. Once the notice is issued you have thirty days to decide if would like the State to take all of your land, rather than just the portion that they are proposing. This is explained further, below.
3. Proceed to a condemnation proceeding
If you couldn’t agree with the State, you will get a Notice that the State has initiated condemnation proceedings. This means you are entitled to a hearing in front of a “compensation committee.” This doesn’t mean going to Court – rather, the County Sheriff puts together a jury of community members who have experience with your type of land – the jury will usually be made up of community or business leaders, people who deal in real estate and, if your land is agricultural, farmers. You will be given notice of the location, date, and time of the hearing. The hearing is your chance to explain to the committee why you should receive a higher price for your land than what the State has offered. The compensation committee will be allowed to tour your land and see it for yourself, and then it determines what the sale price for your land will be. If the compensation committee’s award is more than 110% of the State’s final offer prior to the hearing, then the State must pay your attorney fees and costs.
Once the compensation committee issues its award, you have thirty days to decide whether or not you would like to appeal. If you think the compensation committee got it wrong, you have the right to appeal to the District Court and again argue that the State has not given you your just compensation for the land. If the District Court awards more than the compensation committee, the owner is again entitled to attorney fees and costs.
4. Insist that the state take the entire piece of land
Sometimes, as mentioned above, the State will only need a portion of your land. But what if the portion they want to take makes what’s left to you useless? In that situation you have the option to demand that the State acquire and pay for all of your land, not just a portion.
There are specific rules that apply to this situation that you should be aware of. Most importantly, you have to file a lawsuit in District Court within 30 days of receiving the State’s Notice of condemnation proceedings if you want to insist that the State compensate you for all, and not just part, of your land. If you don’t file within 30 days, you lose the right to make this argument.
At all points in this process it is always advisable to have an attorney looking out for your interests. Wandro & Associates has years of experience defending landowners in condemnation proceedings. If you have been contacted by the State or a State agency with an interest in acquiring your land, please contact us for a free consultation.
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This Wandro & Associates Update is intended to inform firm clients and friends about legal developments, including recent decisions of various courts and administrative bodies. Nothing in this Practice Update should be construed as legal advice or a legal opinion, and readers should not act upon the information contained in this Update without seeking the advice of legal counsel.