Property owners in Alabama enjoy several legal protections. However, there are circumstances in which a government entity or utility company may use its eminent domain authority to seize private property (in exchange for compensation) for a project intended for public use. This process, known as condemnation, can create major headaches for landowners as they wonder what steps they can take to obtain a more equitable settlement offer or challenge the condemnor’s power to exercise eminent domain. Property owners facing a condemnation matter should contact an experienced eminent domain lawyer as soon as possible to learn more about their legal rights and options. However, what happens when a condemnation proceeding is initiated against a commercial property? If you own a business or lease commercial space for your company, this post will explore what steps you can take when facing an eminent domain acquisition in Alabama.
Understanding Eminent Domain Matters in Alabama
The Alabama Constitution addresses the matter of eminent domain, giving government agencies, cities, counties, and other qualifying corporations the right to take private property for public use, provided they pay the landowner “just compensation” in exchange. Unfortunately, the vague term “just compensation” creates the opportunity for condemning entities to lowball the landowner and pay them as little as possible for their property. The agency wishing to exercise its eminent domain authority will notify the affected landowner by sending a condemnation notice, which is typically worded in such a way that the recipient assumes they have no choice but to accept the offer. However, Alabama property owners should recognize that they have the right to contest the condemnation proceedings and push for a more comprehensive settlement that reflects the value of the property at its highest and best use, not its current use. There is a world of difference between those two valuation approaches. They can work with independent appraisers to obtain a higher and more accurate valuation of the property and use this information to negotiate a fair and favorable settlement in exchange for the property. It’s essential to recognize that condemnation matters can be complex and nuanced, so working with an experienced eminent domain lawyer is necessary.
What Entities Have Eminent Domain Authority?
According to the Alabama Constitution, federal, state, and municipal governments have the right to exercise eminent domain. Additionally, most corporations in the fields of railroad construction, operation, and maintenance, gas and electric works, water and power companies, telecommunications companies, and other public utility companies may exercise eminent domain authority. A corporation or party seeking to initiate condemnation proceedings should be able to demonstrate its legitimacy in enjoying the power of eminent domain. If the legislature does not find that the agency qualifies for eminent domain, or it finds that the proposed project does not fulfill the legal requirement of “public use,” it may prevent the entity from moving forward with the condemnation case.
What Condemnation Means for Alabama Business Owners
Many condemnation matters involve the seizure of private property, such as private residences or family farms. However, some cases involve commercial property, and these cases can become especially complicated to navigate. First, it’s important to identify whether you are a commercial owner or tenant. Those parties are affected quite differently.
Commercial Property Owners
If you own a commercial property and you’ve received a condemnation notice, you have the right to agree to a partial or complete taking of the property in exchange for compensation. Eminent domain matters follow a set condemnation process, whether the property involved is residential or commercial. Enlisting the guidance of a knowledgeable condemnation lawyer is the most strategic step you can take to ensure you obtain a fair and favorable amount of compensation in exchange for the property.
Business Owners Who Lease Commercial Space
As a commercial tenant, you do not have an ownership interest in the property, meaning you do not have a say in whether to challenge an eminent domain action. Instead, you should focus on your legal rights as a commercial tenant as soon as the condemnation moves forward. Many commercial leases include specific clauses that address condemnation. Usually, these clauses will state that the lease will terminate in the event of a condemnation event. If the matter involves only a partial taking of the property, tenants will usually have the option to terminate the lease without penalty. It’s essential that you familiarize yourself with the terms of your lease to prepare for such an event. In some cases, you may be able to recover compensation to help you with certain relocation expenses. It’s best to speak with an experienced condemnation attorney to learn more about your options.
Learn more about your rights as a property owner today by calling Sewell Sewell Beard LLC at either our Alabama office (203) 544-2350 or our Texas office (972) 777-5390 to discuss your situation with a trusted eminent domain attorney.
