Tennessee's Eminent Domain Laws 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 Laws?

  The government’s inherent power of eminent domain requires legislative action for it to be exercised. The right of eminent domain may be legislatively delegated by the state to a county, municipality, public service corporation, private corporation, or even an individual, subject only to the constitutional limitations that it is exercised for a public use and that the owner receives just compensation for the property rights taken and any limitations imposed by the specific statutory authority. The power of eminent domain has been delegated to counties (Tenn. Code Ann. §§ 29-17- 201, 29-17-901) and municipalities (Tenn. Code Ann. §§ 29-17-301, 29-17- 901). It has been generally delegated to any person or corporation authorized by law to construct railroads, turnpikes, canals, toll bridges, roads, causeways, or other works of internal improvement (Tenn. Code Ann. § 29-16-101).

• What Are the Legal Requirements for Exercising the Power?

  Under Tennessee law, property can only be condemned for a lawful public use. 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 taken. Condemning authorities must obtain an appraisal of the property to be taken, must file and record right of way plans, allow the property owner to examine the required appraisal and negotiate in good faith with the property owner.

• What Limitations or Defenses Exist?

  Primary limitations relate to the existence of legislative authority to exercise the power of eminent domain and whether the project is for a public purpose. The determination as to whether the taking of private property is for a public purpose is a judicial question (not a jury determination), which must ensure this constitutional guaranty to the property owner. The determination of a “public use” by the state or other governmental agencies is given significant deference by the Courts. The determination by a condemning authority of the necessity for the taking is not a question for resolution by the judiciary and, absent a clear and palpable abuse of power, or fraudulent, arbitrary, or capricious action, it is conclusive upon the courts. Tennessee courts have given governmental authorities broad discretion in the location of public projects.

• What Constitutes a Public Purpose?

  Tennessee Code section 29-17-102 states that the term “public use” shall not include private use, private benefit, or indirect public benefits resulting from private economic development and private commercial enterprise, including increased tax revenue and increased employment opportunity, except with regard to (1) the acquisition of any interest in land necessary for road, highway, bridge, or other structure, facility, or project used for public transportation; (2) the acquisition of any interest in land necessary to the function of a public or private utility, governmental or quasi- governmental utility, common carrier, or any entity authorized to exercise power of eminent domain under Title 65; (3) the acquisition of property by a housing authority or community development agency to implement an urban renewal or redevelopment plan in a blighted area; (4) private use that is merely incidental to public use, so long as no land is condemned or taken primarily for the purpose of conveying or permitting such incidental private use; or (5) acquisition of property by a county, city, or town for an industrial park.

• How is Just Compensation Determined?

  Article 1, Section 21 of the Tennessee Constitution requires the award of fair cash market value of the property actually taken to the property owner. Additional compensation is provided to property owners in condemnation proceedings under Tennessee statutes such as Tennessee Code section 29-16-114 which provides that just compensation includes the value of the land or rights taken without deduction and incidental damages, if any, to the remaining property of the owner subject to deduction for incidental benefits that may result to the owner by the reason of the proposed improvement. Generally, just compensation is awarded by a jury.

• How Is Fair Market Value Defined?

  Fair market value of the property taken is to be established as of the date of taking. The date of taking is the date of possession. Fair cash market value means the amount of money that a willing buyer would pay for the property and that a willing seller would accept, when the owner is not compelled to buy and the landowner is not compelled to sell. In determining fair cash market value, the jury in a condemnation case is instructed to consider all of the property’s legitimate potential uses. The market value of the property is to be determined without regard to any increase or decrease in value because of the announcement or construction of the public improvement for which the property is taken.

• What About Recovering Damages to Remaining Property

  In a partial condemnation case, a case in which the owner is left with remaining property, the owner is entitled to any decrease or diminution in the value of the remaining property as additional damages. These incidental damages (known in some jurisdictions as “severance damages”) to remaining property are measured by the difference in the remaining property’s fair cash market value immediately before and immediately after the taking. Tennessee Pattern Instructions 3, Civil 11.04.
  Many factors have been recognized as relevant to the determination of incidental damages, including:
  1. The loss of its use for any lawful purpose;
  2. Any unsightliness of the property or inconvenience in its use;
  3. Any impairment to the owner’s access to the property or between the property and nearby streets and highways; and
  4. Any other consideration that could reduce the fair cash market value of the remaining property.
  
  Tennessee Pattern Instructions 3, Civil 11.04.

• 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. Owners of property are entitled to recover reasonable expenses, including attorney, appraisal, and engineering fees, incurred in an eminent domain proceeding from a condemning authority if:
  
  1. The final judgment is that the acquiring party cannot acquire the real property by condemnation; or
  2. The proceeding is abandoned by the acquiring party.
  
  Tenn. Code Ann. §§ 29-17-106, 29-17-912.
  
  If a land owner prevails in an inverse condemnation case, he or she is entitled to recover from the condemner his or her reasonable costs, disbursements, and expenses, including reasonable attorney, appraisal, and engineering fees actually incurred because of the proceedings.
  
  Tenn. Code Ann. § 29-16-123.