Maryland Eminent Domain and Property Rights

The following responses are intended to provide general information about eminent domain laws in the featured state. Such information does not constitute legal advice. Anyone interested in learning more about eminent domain law and the impact it may have on a given set of facts should consult with an OCA attorney or another attorney experienced in handling eminent domain cases.

• Who Can Exercise Eminent Domain Powers?

  Md. Real Property Code Ann. § 12-101 provides that the State, or any of its instrumentalities or political subdivisions, acting under statute or ordinance passed pursuant to Article III of the Maryland Constitution, may take private property for public use. However, in situations where counties, municipalities, utilities and others seek to exercise the power of eminent domain, they may only do so if the State has delegated condemnation authority to such entities. Consequently, it is important to confirm at the outset of any case whether the entity seeking to exercise the power of eminent domain has received a lawful delegation from the State to do so.

• What Are the Legal Requirements for Exercising the Power?

  Under Maryland law, property can only be condemned for a lawful public use or purpose. Additionally, condemning authorities must possess the proper delegation of eminent domain authority from the State to condemn property. In all situations, if the right to condemn exists, just compensation must be paid for the property being taking. Finally, Maryland law also requires the condemning authority to make every reasonable effort to acquire the property expeditiously by negotiation before filing an eminent domain action.

  To learn more about the procedural aspects of eminent domain cases in Maryland look to Title 12, Rules 12-201 et. seq. and Real Property Article, §§ 12-101 et. seq. of the Maryland Code. Additional procedural requirements are imposed on the State Department of Transportation in Title 8 of the Transportation Article.

• What Limitations or Defenses Exist?

  Once the decision to proceed with a public project is made and the acquisition of property necessary for the project is determined by an authorized governmental entity, the grounds to challenge the condemnation are limited under Maryland law. Defenses can, however, be raised as to whether a proper public use exists for the condemnation or whether the prerequisite legal authority to condemn is present. In such situations the Court will review the submitted evidence and rule on the defenses. But in other matters deference is generally given to the condemning authority in its decision to condemn. For instance, the court will not review and substitute its opinion as to whether there is a need to take the property or whether the public project is feasible, unless it can be shown that the decision is so oppressive, arbitrary or unreasonable as to suggest bad faith.

• What Constitutes a Public Purpose?

  Like the U.S. Constitution, Maryland’s Constitution limits the use of eminent domain to “public use,” a term which over time has come to include public purpose as well. Typical uses that satisfy a public use or purpose can include roads, parks, schools, other public buildings, or other projects or undertakings that serve a public good or need. Unfortunately, unlike other states that embraced eminent domain reform following the Kelo decision, Maryland still recognizes economic development as a proper public purpose for which the eminent domain power may be utilized. The one restraint on this power is that the economic development must be carried out pursuant to a comprehensive plan. It should be noted that in at least one case, simply asserting that property would be condemned “for urban renewal purposes” was insufficient to meet the comprehensive plan requirement.

• How is Just Compensation Determined?

  The definition of just compensation under Maryland law includes the fair market value of the property being taken from the landowner, any diminution in value to the landowner’s remaining property, and all demonstrable damages occurring as the result of the condemning authority’s conduct during the pre-condemnation period. This last damage element is somewhat unusual as many states do not formally recognize the right of landowners to claim pre-condemnation losses.
  In Maryland, just compensation in cases brought by the State Roads Commission can be determined by a Board of Property Review (“BPR”). Each county has a BPR, which consists of three members appointed by the circuit court judges. The BPR will hear the condemning authority’s case and the owner’s case and render an award. If either party is dissatisfied with the findings or award, the case may be appealed to the circuit court to be heard by a jury. On appeal, the court will hear and determine the case de novo, meaning from the beginning. The award of the BPR will not be considered by the court or disclosed to the jury. The BPR process has proven to work well in resolving small cases. The State Roads Commission may elect to bypass the BPR procedure and file a condemnation action directly in the circuit court. This generally occurs in larger cases where the contested amount of just compensation between the parties is substantial.

• How is Fair Market Value Defined?

  Maryland law defines “fair market value” in a condemnation case as the “the price as of the valuation date of the highest and best use of the property which a seller, willing but not obligated to sell, would accept for the property, and which a purchaser, willing but not obligated to buy, would pay,” excluding any impact on value caused by the project for which the property is being taken. See Md. Real Property Code Ann. § 12-105. Because fair market value is often driven by both the “valuation date” to be applied and the “highest and best” use of the property to be considered, both elements are important in the value determination. Generally, the property’s fair market value is the subject of opinion testimony by expert real estate appraisers, although an owner of property is also presumed competent to testify to the value of the property owned and being taken. Appraisers will often use different valuation approaches to determine the value of the property, the most common being the comparable sales, income and cost approaches.

• What About Recovering Damages to Remaining Property?

  Under Maryland law just compensation does include any diminution in value (i.e. damages) to an owner’s remaining property. Thus, when a condemning authority takes a portion of a landowner's property, it is obligated to pay compensation not only for the part taken, but also for any loss in value to the property not being taken. Unfortunately, in Maryland a landowner is not entitled to claim damages for business loss caused by the public project on the theory that the business itself can be relocated.

• Is the Landowner Entitled to Recover Reasonable Attorney Fees? Expert Fees? Litigation Costs?

  Unlike the law in many other states, attorney’s fees, expert witness fees, and other litigation expenses and costs incurred by an owner in defending a condemnation action are generally not recoverable. There are two exceptions to this rule, however. Attorney's fees may be recoverable if it is determined that the state does not have the right to condemn the property (Md. Code Ann., Real Prop. § 12-106) or if the condemning authority abandons the proceeding (Md. Code Ann., Real Prop. § 12-109(e)).

• When and under what circumstances can the government take possession of property prior to final just compensation being paid?

  When a condemning authority seeks to take possession of property prior to a final determination of just compensation it is called a “quick-take” under Maryland law. A quick take involves '[t]he immediate taking of possession of private property for public use, whereby the estimated compensation is deposited in court or paid to the condemnee until the actual amount of compensation can be established.' Mayor & City Council of Baltimore City v. Valsamaki, 397 Md. 222, 226 (2007).

  There are several notable differences between quick-take and a regular condemnation. First, a quick-take only entitles a condemning authority to take possession, not title, to the property once the estimated just compensation is deposited. Second, the right of quick-take is coupled with a prohibition against abandonment of the condemnation action after a taking has occurred without the owner’s consent. Third, the quick-take procedures permit the property owner to withdraw the estimated condemnation paid into court without prejudice to the owner’s rights to seek additional and full just compensation. And finally, because the property may be taken long before trial causing physical changes to the property from its original condition, when the jury goes to view the property prior to rendering a verdict, the view may be deemed irrelevant or non-consequential.

  Maryland is somewhat unique in that it has granted only a handful of government jurisdictions and entities quick-take powers, e.g. Baltimore City, Baltimore County, Montgomery County, the municipal corporations within Cecil County, the State Roads Commission, the Washington Suburban Sanitary Commission (in Prince George’s County only), and WMATA. Numerous proposed amendments to the Maryland constitution seeking to expand quick-take authority to other entities have been defeated.