Alabama'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 Powers?

  The State of Alabama and the United States of America both have the inherent power of eminent domain. These governmental entities can also choose to exercise their power through other entities which they determine serve a public use through a process inaccurately called “delegating”. The State of Alabama and the Federal Government can delegate to private and to other public entities the power of eminent domain. In this manner, counties, municipalities, public utility corporations, departments of the State, school boards, and other public entities have been granted the power of eminent domain by the State. Similarly, private corporations like utility companies, railroads, pipeline transportation companies, telephone companies and others whose business purpose is to serve the public have also been granted the power of eminent domain by the State.
  
  To determine if a particular entity has the power of eminent domain to take land for a particular project, you need to first find the state or federal law that delegated the power to them, and then determine if that delegation is broad enough to apply to the property in question for the project the agency has in mind. Just because an entity can condemn land for one purpose, does not mean it can condemn it for a different purpose.

• What Are the Legal Requirements for Exercising the Power of Eminent Domain?

  Entities who have the power of eminent domain can normally exercise it in their broad discretion subject only to some procedural requirements such as making an offer based on an appraisal prior to filing the condemnation action. These procedural steps are found in the Alabama Eminent Domain Code which is found at Code of Alabama, Section 18-1A-1, et seq. Some entities, however, must first secure Public Service Commission approval prior to filing a condemnation action. Again, you must start your analysis with the statute that delegated the power of eminent domain to see what limitations or legal requirements may have been imposed on that entity, and then go to the Alabama Eminent Domain Code.

• What Limitations or Defenses Exist?

  The primary limitations and defenses are in the statutory delegation by the State to the entity as compared with the project they are contemplating. For example, some municipalities cannot condemn lands outside their corporate limits for certain projects, but they can condemn land inside their corporate limits for those same projects. Some entities can only condemn a right of way and not fee title. These can be defenses in a particular case to modify or defeat a taking. Other defenses are procedural, like those found in the Alabama Eminent Domain Code, and while these can be asserted, they generally can be cured by the agency.

• What Constitutes a Public Purpose?

  The Alabama Constitution states that, “private property shall not be taken for, or applied to public use, unless just compensation be first made therefor.” Alabama Constitution, Art. I, Sec. 23. This means that property must be necessary for a public use before it can be taken. This property right protection, however, is largely ignored by the Courts as they defer to the condemning agency and to the State which delegated the power of eminent domain in determining what is a public use or public purpose.

• How Is Just Compensation Determined?

  Alabama condemnation actions travel through two different trial court systems. Cases start in Probate Court, and in this venue just compensation is determined by a verdict of three people from the County who are appointed by the Probate Judge to serve as “Commissioners.” These Commissioners may view the property and will hold a hearing to determine just compensation. While the Probate Judge appoints the Commissioners, the Probate Judge does not deliberate with the Commissioners on the amount of their verdict. Think of the Commissioners as a small, three-person jury.
  
  If a party is not satisfied with the Probate Court Judgment then any party may appeal to Circuit Court for a trial de novo (an entirely new trial – not a review of the record in the Probate Court). In the Circuit Court the trial judge will determine just compensation or, if any party requests a jury, then a jury of 12 people will render a unanimous verdict to determine just compensation. Jury trials on just compensation are guaranteed by the Alabama Constitution.

• How Is Fair Market Value Defined?

  The fair market value of property is the price it will sell for when it is offered for sale by a willing seller who is not forced to sell, and it is bought by a willing buyer who is not forced to buy, after due consideration of all matters that a buyer and seller would consider.
  
  Fair market value is a matter of opinion, and condemnation cases typically involve a presentation of different opinions of fair market value to the fact finder.

• Are Damages to Remaining Property Recoverable?

  Yes. When some land is being taken but other land is going to remain with the owner, this is called a partial taking. The valuation approach in partial takings is to award the difference between the fair market value of the entire property before the taking (the “before value”) and the fair market value of the property remaining after the taking assuming that the project for which the land was taken had been built (the “after value”). The difference between the before and after value is the amount of just compensation that is owed.

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

  No. Alabama law does not allow a landowner to recover its attorney’s fees, expert fees or most litigation costs unless the condemnation action is dismissed.
  
  Our firm handles condemnation actions for property owners on an hourly rate basis, on a contingency fee basis, and on a hybrid basis that combines the two. We can tailor our fee arrangement with our clients to suit their needs, interests, and objectives. We would be happy to discuss what fee arrangement may work best for you in your case.

• When and under What Circumstances Can the Government Take Possession of Property Prior to Final Just Compensation Being Paid?

  After the Probate Court Judgment is entered, the condemning agency can deposit the judgment (and some agencies must also post a bond in twice the amount of the judgment) to take possession of the property to build its project. This is true even if one or both parties appeals the Probate Court Judgement to Circuit Court for a trial de novo. The owner is allowed to withdraw from the funds deposited the amount of the agency’s offer.