Inverse Condemnation


Definition of "Inverse condemnation"

Meredith Kennedy real estate agent
Meredith Kennedy, Real Estate Agent Century 21 Boling & Associates, Inc.

The definition of inverse condemnation is a suit or legal action taken against the government by a land or property owner when property rights have been compromised or usurped by a government activity without a formal condemnation or eminent domain procedure.

Law and legislature often use the term for disputes regarding denied property rights along with the benefits of owning a particular property. The meaning of inverse condemnation is when a property owner contests the government’s unjust use of property, owned, adjacent, or abutting, which undermines the integrity of the owner’s property. To put it simply and a bit exaggerated, the government takes your property to build a community park without paying compensation, initiating the eminent domain procedure, or notifying you of the situation.

Rights of the owner

Owning a property, whether it is residential or commercial real estate, comes with some benefits. The location can be vital to you or the neighborhood. The fact of the matter is that it doesn’t matter why that particular property is essential to you because it is yours. Nonetheless, if the government takes your property or compromises it without compensation, you are not without means of retaliation.

The Fifth Amendment explains the obligation in taking property by stating, “nor shall private property be taken for public use, without just compensation.” The amendment protects every citizen of the US from this situation because it requires just compensation if the government decides to use your property or compromise its value in any direct way. Because of the Fifth Amendment, the property owner is entitled to sue the government for the outcome of the taking and demand just compensation in court. This is why you must understand how someone can use inverse condemnation and the limitations of the procedure.

How does it work?

If the government or other public authority takes an owner’s property without following the condemnation and eminent domain procedures, and they did not pay just compensation, the owner has the right to take legal action in order to defend their rights. An inverse condemnation suit is a standard action that the owner takes against the government in this case.

The first step is filing a claim. The claim must prove the ownership of the property and the interference from the government upon that ownership. The most important aspect of the claim is providing proof that the public authority took the property without any just compensation or eminent domain procedure. It should also underline the government’s interest in the property and the reason for the taking. Proving that the taking did occur is the responsibility of the plaintiff, in this case, the property owner. They should do this with an attorney as the court demands a lot of documentation, including the value of the property and proof of ownership. 

Something to keep in mind is that, as mentioned above, there are limitations to inverse condemnation. There is a statute of limitations of four years concerning inverse condemnation that starts to run when the owner becomes aware of the harm or taking of their property.

When it comes to the ruling on inverse condemnation, that responsibility falls to the judge, in federal or state courts. The judge determines the legal and factual issues of these cases, but they do not rule on the just compensation for damages.

Examples of inverse condemnation

The state constructs an interstate highway on the edge of an individual's property and blocks the view of the ocean because of the erection of fences and signs. The property owner institutes an inverse condemnation action to recover the loss in property value sustained by the construction of the expressway.

A city decides to build a park close to a residential community that is owned by a developer. Because the park developers did not implement a functioning management system for stormwater drainage, flooding resulted in the residential community. The community’s developer starts an inverse condemnation action to recuperate the lost revenue from the individual property values damaged by the flooding.

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